Payments for environmental services in upper-catchments of Vietnam : Will it help the poorest?

Open Access

Abstract

Northern provinces of Vietnam suffer from environmental problems such as deforestation, soil degradation, and loss of biodiversity. As a result, the livelihoods of most agricultural households are unsustainable. Moreover, the current land use practices are also producing negative externalities that adversely affect the downstream areas. Deforestation and slash-and-burn cultivation techniques are blamed by some governmental organizations as the main causes for the problem. A mix of incentives (generally subsidies), technical assistance (usually improved and sustainable agricultural practices), and regulation have been used to address the problem. While some progress can be observed in terms of reforestation, many agricultural households are still employing unsustainable agricultural practices that will in the medium term affect their own livelihoods. Land use practices, which would bring about environmental benefits, include forest plantation, agro-forestry, tree-based land use alternatives and agro-ecologically sound practices such as conservation agriculture (Gouyon, 2002). However, the environmental services these land use provide, i.e. watershed services, biodiversity conservation and carbon storage are usually un-rewarded and only indirectly connected to economic activities (Bui Dung The et al., 2004). Payments for Environmental Services (PES) schemes present a new approach that focuses directly on creating a conditional benefit transfer between the upland providers of environmental services and the downstream beneficiaries. Such schemes can take the advantage of upland-lowland interactions in generating environmental benefits while improving the livelihoods of upland farmers. The past few years have witnessed a surge of interest in the development of PES schemes in Asia. In Vietnam, while some projects using the conceptual framework of PES are being initiated in the central and southern part of the country (e.g. WWF, 2007), no PES schemes are currently being implemented in the upper catchment areas of Northern Vietnam (Wunder et al., 2005). However, the Vietnamese Government expressed recently its intention to start such a scheme to protect fragile upper-catchments whose degradation is causing problems on hydro-electric infrastructures. Households in upper-catchments have unequal access to natural resources. The upper-catchments are generally composed of narrow valley bottoms, where irrigated rice fields are found and surrounding sloping land where upland rice, maize and cassava are the principal crops. The differential access to these two types of land has some important consequences on household farming practices and livelihood strategies. The main objective of this paper is to review the potential responses of the different types of households to a PES scheme that would reward farmers to set aside some land for forestry projects. Subsequently, we will investigate if poorly endowed farmers would gain from participating in such a scheme. While, some analytical work has already given general results (Zilberman et al., 2006), we would look at the specificity of PES schemes targeted at agricultural households of the upper-catchments in Northern Vietnam. The proposed paper is organized in two parts. The first part proposes a typology of farmers of two typical upper-catchments of the northern province of Yen Bai, Vietnam. The second, using a simplified farm model analyses how households with different endowments would respond to such a PES scheme. The Sai Luong and the Pan Cang catchments were selected for their contrasted water availability and access to markets. The villagers of the Sai Luong catchment, in Nam Bung commune, share a relatively large area of flat valley bottom where rice paddies are grown. Most farmers do not have access to the input or output markets. On the other hand, the villagers of the Pang Cang catchment, in Suoi Giang commune, have only access to sloping land. They are now increasingly making use of w