Economic evaluation of the integrated rehabilitation and management of critical watershed in the Philippines : a thesis submitted in partial fulfilment of the requirements for the degree of Master of Philosophy in Natural Resource and Environmental Economics at Massey University

Abstract

The impacts of upper watershed land use practices on resource systems on-site and downstream have long been recognised as a major problem area in resource management in the Philippines. Increasing population levels and upland migration have worsened this problem with time. The consequences are seen in loss of upland productivity, poverty for upland farmers, loss of biodiversity, soil erosion, river siltation, sedimentation of reservoirs and irrigation systems, impacts on estuarine mangroves and coastal fisheries, increased flooding and drought, and so on. There is an urgent need to protect the resource system while at the same time providing for the needs of the upland population. Watershed rehabilitation is proposed as a strategy to achieve this. Watersheds comprise of a sequence of linked resource systems which complicates the integrated rehabilitation and management of them. Management is also complicated by the fact that different agencies have responsibilities over different parts of the watershed and that the private parties within the watershed are there often illegally. Hence, any rehabilitation scheme needs to provide ways to make occupation legal for illegal occupants and at the same time provide incentives for them to cooperate with the rehabilitation strategy. In other words, any proposed scheme must be profitable to the occupants. This study describes a strategy for watershed rehabilitation and analyses a case study example. The project's aim is to integrate social development and watershed rehabilitation. The social development component looks at people participation and the provision of land and opportunities to produce food. The rehabilitation component deals with reforestation and agroforestry to reduce soil degradation and increase water flow. The project involves reforestation of 950 hectares, agroforestry on 3070 hectares, assisted natural regeneration of 716 hectares and production of agricultural crops on an area of 450 hectares. The objectives of the study are to investigate watershed rehabilitation in terms of economic desirability, socio-economic impact and possible implementation constraints. A Benefit-Cost analysis on the data obtained from a feasibility study shows that the project, from an economic point of view. is very worthwhile. The sensitivity analysis further shows that the results are also very robust. Implementation however, will not be an automatic process and the good economic results are not a foregone conclusion. Success of the project will to a large extent depend on cooperation by the occupants of the watershed. Recommendations are made as to how this cooperation can be achieved. Overall however, the study shows that watershed rehabilitation is a strategy that is desirable from an economic and social point of view as well as clearly contributing to sustainable development of the Philippines.