Proceeding of the 2nd International conference on Economic and Development, Vol. 2, Issue 1, 2018, pp. 6-13 Copyright © 2018 TIIKM ISSN 2536-8338 online DOI: https://doi.org/10.17501/25368338.2018.2102 AN ANALYSIS OF FISHERIES AND OTHER ECOLOGICAL RESOURCES IN THE SEGMENT OF MEGHNA RIVER IN Aminur Rahman*

Department of Economics, Independent University, Bangladesh

Abstract: Bangladesh is a riverine country with hundreds of rivers. All of them carry different valuable attributes. However, our present endeavor is to look into a particular segment of mighty Meghna River in Bangladesh which is rich in fishery resources and other ecological objects. It plays a vital role in supplying future water to urban area of Dhaka city also. In this connection a survey was conducted to see the pool of resources specially fisheries resources availability in the river area. It was found that several locations are abundant with fish, aquatic invertebrates, amphibians, reptiles, birds, mammals, and butterfly. A minimum 30 out of 53, red listed fish species are available in the study area which indicates the importance of the river habitat for better management in future. The river is not only rich in fisheries resources but it helps providing lot of other vital services which are important for healthy growth of these resources. However, this is not the end of the story. For proper valuation we estimated Total Economic Value (TEV) of the objects using direct values, indirect values, existence values and option values. The estimate shows a significant value in the segment and deserves proper management of these resources.

Keywords: fisheries, ecology, total value, management

Introduction

Dhaka city is running out of ground water and surface water to some extent as well at a headlong speed. To provide Dhaka City with sufficient drinking water in the future, water from the Upper Meghna River will be used as a source of drinking water. The Dhaka Water Supply and Sewerage Authority (DWASA) will establish two intake points. One intake will be at Bishnandi and the other at Haria. The raw water will be transported by pipeline to treatment facilities. Around eight million people will be served with drinking water. So the main objective of the this paper is to find out how valuable is this source and by doing that we try to find the value of resources specially the fisheries and other associated resource and their total economic value. So that it draws special attention and authority takes appropriate measures to preserve it.

Objective of this Study

The objective of the report is to assess the economic values of the relevant section of Meghna River using total economic valuation approach. Special attention is given to the valuation of Fisheries Resources.

Structure of the Report

The report describes the objective at the outset followed by different segments like, study area, valuation concepts and their methods of use, different data on direct and indirect values and total economic values. Results are shown in a table with respective values of relevant items. It gives detailed description of Benefit Transfer Method and ends with conclusion and reference.

Corresponding Author Email: *[email protected] Aminur Rahman / An Analysis Of Fisheries And Other Ecological Resources……

Methodology

The report heavily relies on other reports (Munir 2017) and Feasibility Study for Augmentation of Water Supply to Dhaka, Volume 1 Feasibility Report,(August, DWASA 2011) generated in case of area determination, fisheries, fuel, DWASA water for direct values and all other values have been derived from other country’s experience in using Benefit Transfer Method for capturing values in the situation of nonexistence of market.

Description of the Study area

The segment of Meghna River under our consideration is 71KM in length and with a width of average 1.5 to 2 km. Areas between Bhairab Bridge and Meghna Bridge have been considered as the relevant segment for our purpose. There are two intake points: Bishnandi (intake point 1) and Haria (intake point 2 respectively). The map below vividly gives a picture of these two areas along with its surroundings.

Fig 1: Map of the study area

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Economic Values on the Segment of Meghna River

Since there are different values associated with the designated area of Meghna River we will concentrate on different aspects of it with emphasis on the following:(All calculations have been accomplished on annual basis).  Water production by WASA  Navigational use value  Fuel wood (Reed)  Economic values of fisheries.  The value of ecosystem  Tourism value, genetic material value, Education  Human Habitat, watershed protection value,  Protection of endangered spices value,  Carbon store value  Medical importance and biodiversity values.

Results

Table 1: Total Economic Values

Direct Use Values Water Supply to WASA:USD 45.51 million USD annually (950 MLD by 2020) Navigational Services: US$32000x365=US$ 116.8 million annually Fuel Wood: Reed:1000 decimal x average price Tk (Taka)115= USD14375 annually Fisheries: 25000kg (2500 ton) xTk500= USD15625000 (1USD=Tk80). Annually Tourism: USD 53250 annually Genetic Materials USD 75540 annually Education: USD 77,000 annually Human Habitat: USD 41376 annually Indirect Use Values Watershed protection of fisheries: USD575100 annually Protection of Endangered Spices (Dolphin, Turtle etc.) USD 575100 annually Carbon Store USD 3195000 annually Option Values Future Uses: Medical Importance: USD 170400 annually Existence Values Biodiversity: USD 223650 annually Total Economic Value: USD 182.935791 million

Valuation Method and Rationale

Basic Idea of Valuation

Natural resources provide both goods and services. A river, for instance, may provide fish, different type of spices, watershed protection, irrigation water, drinking water, bathing water, medical plants, food and forage for animals, navigational facilities, recreation and so many visible and invisible things. But all of them cannot be traded in conventional prices and in conventional markets. However, they have values to take into account. For quantification and ultimate monetization of these values economists have devised different techniques for

8 Aminur Rahman / An Analysis Of Fisheries And Other Ecological Resources…… calculating these different values to give this natural resource a true value in the form of total economic value. Besides direct values there are option values and existence values also. Option values and Existence values are derived from the potential use of these resources. Values of this type refer to non-use value. Thus the key concept of values from a natural resource is composed of calculation of Total Economic Value (TEV) as:

TEV = Direct Values +Indirect Values + Option Values + Existence Values

Use values (direct + indirect values) refer to the situation in which values are derived by using the resources as well as getting benefits from the natural ecosystem. For Example the forest wood and other non-forest wood products are termed as direct benefits while the flood protection activities of forest together with other attributes are termed as indirect benefits.

In short, existence values are used to capture some Willingness To Pay (WTP) for resources which is not connected with current or future use. It simply captures the expectation of the existence of the resources. An example may be Dolphins in Meghna Basin. Someone or some group of person home or abroad may be interested in the preservation of these spices and willing to pay for it even though they would know that it will not give them any direct benefits. However, their mere existence has some values to them. Bequest values (for idea only, not used here in any calculation) refer to the situation which measures people’s willingness to pay for some resources which can be used by the offspring of prayers. Option values are those values where an individual expresses his willingness to pay for the option of using an asset so that it can be used in future. Our next concern is how to capture these values. Economists have developed different approaches to the economic measurement of environmental impacts. In general the following valuation methods are usually applied in capturing total economic values of our interest.

For conventional markets the methods of valuation are Dose Response and Defensive Expenditure Method, etc. In the care of surrogate or implicit markets, the Travel Cost Method and the Hedonic Price Method are usually used. However, in the case of hypothetical markets, experimental methods are used where experiments are done in two ways; the contingent valuation Method and the Contingent Ranking Methods.

The Dose Response Method is used when a given level of pollution is associated with changes in output. The lost output can be valued at market or shadow prices – for example, fish production losses due to water pollution. Here dose is pollution and response is loss of fisheries output.

The Defensive Expenditure Method is used to assess the cost of preventing damage apparently causes by environmental deterioration. The cost of having filters for water in case of contaminated water can be termed as defensive expenditure.

The Travel Cost Method is capturing the value of ecotourism, for example. To calculate this, expenditure on the travel needed to the site of interest can be interpreted to give an estimate on the benefit arising from the recreational experience.

The Hedonic Price Method is used to separate the environmental attributes from other values such as property. This method can be used in case of property prices in a less polluted area than polluted one. The hedonic price approach measures the quality of environmental attributes by detecting the price of implicit goods affected by environmental conditions.

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The Contingent Valuation Method (CVM) is considered to be directly involved in revealing the preferences of the people. They are asked with the help of a structured questionnaire how much they are willing to pay for a benefit and how much they are willing to receive by way of compensation to tolerate a cost. What is sought here is the personal valuation of the respondent of the increase and the decrease in the quantity of some goods contingent upon any hypothetical market. Respondents express what is the maximum they would be willing to pay for an environmental improvement or the minimum they would willing to accept for the decline in environmental quality if a market existed for the good in question.

In the Contingent Ranking Method respondents are asked to rank several alternatives rather than expressing a willingness to pay. This type of method can be used in evaluating the benefits of reducing, for example, pesticide use for the production of bread. All these methods have their relative merits and demerits.

Let’s now explain the procedure of calculating values in Table 1 (Total Economic Value)

Direct Values

WASA water

Table 1 gives some idea of direct value of fisheries and other associate items (based on 1.5 km width). Total value for DWASA water has been calculated on the proposed supply of 950 MLD from Meghna river intake points via Khilket and Saidabad water treatment plant sources. For all other values (existence, bequest and option) we will depend on Benefit Transfer Method followed by Asian Development Banks (ADB) studies with updated price for each service and benefit.

Total supply of water has been estimated to be 950 MLD at the rate of Tk 0.0105 (current rate) charged by DWASA to Dhaka households. The yearly revenue stands at USD 67.86 million. Calculation:0.0105X950 MLD= Tk 9975000 per day. Tk 9975000 X 365 days = Tk 3640875000 per year. Conversion to USD @80= 4551093.5= USD 45.51Million.Howeverthis estimates only take the consumer price without vat and loss of water. The commercial water price, as a matter of fact, is a bit higher.

Navigational services

In case of value for navigational purposes we like to confine our efforts to the extent of benefits derived from Kolkata-Ashujang- transit route.

Ashuganj is a town in the Brahambria district of Chittagong Division situated in the Meghna river delta. Its altitude is 10 meters (36 feet).The city is known for the Port of and for its power plant which generates much of the electricity for the country, especially for the capital city. Almost a 25% of Bangladesh electrical power generation is produced in Ashuganj Power Station. Zia Fertilizer Ltd is situated on the other side of Ashuganj. It produces chemical fertilizer for the country. There are more than 500 rice mills, which means above 40% of the national rice output comes from there. Ashuganj is known also as a commercial hub, with a big river port. There is also a Transit Line in Ashuganj which communicates with India.

The facility running through a land and river route crossing Bangladesh territory cuts the Kolkata- distance via Siliguri’s ‘chicken neck’ from 1600 km to 800 km. It also reduces the time of the journey from 30 days to just 10 days. It has cut the transportation costs from mainland India to the North Eastern state from 67 us dollar to 35 us dollar per ton. However, as per the protocol India pays transit fees of 192.25 US dollar per ton as negotiated between the two countries. Kolkata-Ashujang-Tripura transit route gives mainland India cheaper and easier access to the seven landlocked Northeastern states. In case of handling 10000 tons of freight per day the port earn 10000x192.25 US dollar=1922500 US per day from this single source. Other benefits include the

10 Aminur Rahman / An Analysis Of Fisheries And Other Ecological Resources…… transportation costs from 67US dollar to 35 US dollar. So the benefit is 32x10000=320000 US dollar per day and annually it falls in the range of US$ 116.8 million.

Moreover, it has also reduced the journey from 30 days to just 10 days. We have taken only one much recorded cargo handling to give an indicative value of the river system. The total navigational value will be much more than the present one. Thus the potential of existence of this river and of course the quality of water has substantial value with the river in case of transportation values.

Fisheries and Fuel (Reed)

Table 2: Estimated Economic Value of Fish from the Katha of the study area annually

Sl Site Production (Ton) Million Dollar 1 Bishnandi 1,463 1.83 2 Haria 891 1.11 Total 2,354 2.94

Above are the direct values derived for calculating values of fisheries in different locations. The total yearly value is based on 2500 ton.(Source Munir 2017).

Table 3: Price of fishes in the study area

Sl Fish Average Price 1 Hilsha 700 2 Prawn 1200 3 Aor 600 4 Boal 500 5 Mix Fish 300 6 Small Fish 250 7 Other 300 8 Average 500 9 Dry Fish 300

Table 4: Selling Price of Reeds

Sl Category/Reeds Type Bundle (Ati) Per Weight per Average Price (Tk/Ati) Decimal Bundle –Kg (Ati) 1 Kash 8 10 80 2 Nol 15 15 160 3 Dhaincha 16 20 100 4 Dhol Kalmi 10 14 200 5 Grass 20 12 35

(Grass is used for livestock in raw form. Others are used mostly in dry form. Information based on interview of 16 & 17th Dec 2016 in Bishnandi area. The average price of reeds for 1000 decimal only which is Tk115 per decimal Total: USD. 14375, Source: Munir 2107).

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Indirect Values

We have used Benefit Transfer Method for calculating all other values other than direct ones. All other values include indirect values, Option values and Existence values. Total area of our concern has been transformed into hectare for calculation purposes.

To apply benefit transfer, one must accept that the basic economic principles adhered to in developed countries (such as competitive markets and consumer sovereignty) also hold in developing countries. Although some experts disagree with the validity of these assumptions. Nevertheless, if a general similarity of finding is assumed, useful transfer can be made. The major issues surrounding these transfers relate to the degree of extrapolation required and the difficulties of finding study sites similar to the project site, rather than to differences in fundamental principles.

Protection of Endangered Species: This value reflects a compilation study of developed nations, mostly conducted in the USA and estimated using Contingent Valuation Method (CVM). Average value per ha US$ 8 has been used. Total Hectare 10650x8 = 85200(1.5x71km=10650) hectare (Source: Economic Valuation of Environmental Impact ADB 1996)

Watershed Protection of Fisheries: The calculation of value here refers to the similar studies done in Cameroon.US$54ha. Total hectare 10650x54=US$ 575100(1.5x71km=10650) hectare. Contingent Valuation Method has been used for finding these values. (Source: Measuring Environmental Quality in Asia. ADB and Harvard University 1997)

Tourism: Values for this activity has been collected from the study done in Cameroon using Travel Cost Method. However, it has been adjusted to a reasonable level of Willingness to Pay (WTP) value considering the low- income level of our residents. Calculation of total value for this section has been accomplished in the following fashion: US$ 5 per ha. Total ha 10650x5 = US$ 53, 250, ((1.5x71km=10650 hectare) (Source: Gissen W 2000)

Carbon Store: Values of carbon store has been adjusted from US$ 1300 to US$ 300 per ha as these studies were done in the developed countries where income level is high and WTP is naturally higher than ours. The method used here is Contingent Valuation Method (CVM).Total value: US$ 300x10650 ha = US$ 3195000 (Source: Gissen 2000)

Genetic Materials: This activity carries value from the study done in Cameroon. Calculation is based on US$ 7 per ha. Total value US$ 7x 10650= US$ 74,550.CVM is used. (Source Gissen W, 2000)

Education: This value refers to the value calculated in a case study in Thailand. Value for this object varies from US$ 33- US$ 77,000. CVM is used for this option to exist.. For our purpose we consider US$ 77000 annually. (Source: Gissen W 2000)

Human Habitat (improved sanitation and water availability): Values for this part has been derived from the studies done in Nigeria using CVM based on WTP. However, Values have been adjusted due to low income of our beneficiaries US$ 8 per household. Total benefit: Total value US$41,376 after adjusting with ours. (Source: Gissen W 2000)

Medical Importance: Values have been derived from Indonesian case study. Per ha US$ 16x10650= US$ 170400.CVM is a common practice as people may be asked how much they are willing to have this option for future use. (Source: Gissen W 2000)

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Biodiversity: Values have been derived from case studies done in the developed countries. The adjusted value for our purpose is calculated in the following fashion: US$ 21 ha. Contingent Valuation Method (CVM) and few other methods like direct use values measuring are used to reveal these values. Total value 10650 x21 = US$ 223650 (Sources: Gissen W 2000).

All these values have been calculated after proper adjustment with GDP status of Bangladesh Vis a Vis the corresponding countries. No further adjustments have been made as the value of dollar with respect to Taka has increased more than hundred percent over the period (in 1996 a dollar was Taka 41 which is now Taka 83). The example of Cameron studies have been used in most of our valuation calculations as Cameroon has GDP per capita pretty close to GDP per capita of Bangladesh.

Conclusion

Valuing natural resource is a difficult task as most of the values are of indirect nature and are actually valued in the absence of a market and price. So the task looks apparently for creating a hypothetical market, setting a price and valuing the objects. Rivers are the source of multiple values and all values are difficult to present in the absence of rigorous survey. So the table (Table 1) above on total values represents as a matter of fact, a partial picture as we could not add values arising of many other different activities around Meghna River, like irrigation support, industrial water use, bathing, recreational fishing etc. By and large, the report depicts a state which needs to be preserved efficiently. The total value of the segment is USD182.935791million.Though partial but its importance can’t be ignored and need to be protected.

References

Aalderink,Hans, Strengthening Monitoring and Enforcement in the Meghna River for Dhaka's Sustainable Water Supply,TA-8803 BAN, Progress Report 2 (9 month). 2017 Ahmed Munir., Hossain Md. Lokman,and Aalderink Hans, Report on Ecological Survey of Selected Part of Meghna River, April 2017 DWASA. Feasibility Study for Augmentation of Water Supply to DhakaVolume 1 Feasibility Report. Final report. August, 2011 Economic Evaluation of Environmental Impacts: A workbook.ADB, March 1996 Giessen W., Khan, A., Shahid, A., and Rahman, A. (2000). Management Plan for Tanguar Haor, Bangladesh.National Conservation Strategy Implementation Project-1. Ministry of Environment and Forests and IUCN, Bangladesh. 221 pp. Green Economics: Sustainable Development Policy Institute.Islamabad. 1997 Peter Rogers and others, Measuring Environmental Quality in Asia, The Division of Engineering and Applied Sciences. Harvard University and Asian Development Bank (ADB). 1997.

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