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Evidence, Causes and Remedies This Page Intentionally Left Blank LAND USE CHANGE in TROPICAL WATERSHEDS Evidence, Causes and Remedies LAND USE CHANGE IN TROPICAL WATERSHEDS Evidence, Causes and Remedies This page intentionally left blank LAND USE CHANGE IN TROPICAL WATERSHEDS Evidence, Causes and Remedies Edited by Ian Coxhead Department of Agricultural and Applied Economics University of Wisconsin-Madison USA and Gerald Shively Department of Agricultural Economics Purdue University Indiana USA CABI Publishing CABI Publishing is a division of CAB International CABI Publishing CABI Publishing CAB International 875 Massachusetts Avenue Wallingford 7th Floor Oxfordshire OX10 8DE Cambridge, MA 02139 UK USA Tel: +44 (0)1491 832111 Tel: +1 617 395 4056 Fax: +44 (0)1491 833508 Fax: +1 617 354 6875 E-mail: [email protected] E-mail: [email protected] Website: www.cabi-publishing.org ©CAB International 2005. All rights reserved. No part of this publication may be reproduced in any form or by any means, electronically, mechanically, by photocopying, recording or otherwise, without the prior permission of the copyright owners. A catalogue record for this book is available from the British Library, London, UK. A catalogue record for this book is available from the Library of Congress, Washington, DC. Land use change in tropical watersheds: evidence, causes, and remedies / edited by Ian Coxhead, Gerald Shively. p. cm. Includes bibliographical references. ISBN-13: 978-0-85199-912-8 (alk. paper) ISBN-10: 0-85199-912-3 (alk. paper) 1. Land use, Rural--Philippines--Case studies. 2. Watershed management-- Philippines--Case studies. I. Coxhead, Ian A. II. Shively, Gerald. III. Title. HD908.L36 2005 333.76′09599--dc22 2005011812 ISBN 0 85199 912 3 978 0 85199 912 8 Typeset by SPI Publisher Services, Pondicherry, India. Printed and bound in the UK by Cromwell Press, Trowbridge. Contents Contributors vii Preface ix 1. Economic Development and Watershed Degradation 1 I. Coxhead and G. Shively 2. Agricultural Development and Institutional Transitions 19 A. C. Rola and I. Coxhead 3. Water Quality Changes in the Manupali River Watershed: 37 Evidence from a Community-based Water Monitoring Project W. G. Deutsch and J. L. Orprecio 4. How Do National Markets and Price Policies Affect 58 Land Use at the Forest Margin? Evidence from the Philippines I. Coxhead, A. C. Rola and K. Kim 5. How Do Relative Price Changes Alter Land Use Decisions? 78 Panel Data Evidence from the Manupali Watershed, Philippines I. Coxhead and B. Demeke 6. Economic Incentives and Agricultural Outcomes in Upland 90 Settings I. Coxhead and G. Shively 7. Simulating Soil Erosion and Sediment Yield in 109 Small Upland Watersheds using the WEPP Model V. B. Ella v vi Contents 8. Identifying Soil Erosion Hotspots in the Manupali 126 River Watershed E. P. Paningbatan Jr 9. Alternatives to Traditional Annual Crop Agriculture 133 in the Uplands: Biophysical Evidence from the Manupali River Watershed D. J. Midmore, D. D. Poudel, T. M. Nissen, A. Dan~o and G. Zhu 10. Linking Economic Policies and Environmental 147 Outcomes at a Watershed Scale G. Shively and C. Zelek 11. Using Payments for Environmental Services (PES) to Assist in 163 Watershed Management S. Pagiola, M. delos Angeles and G. Shively 12. Conclusions and Some Directions for Future Research 176 I. Coxhead, A. C. Rola and G. Shively Index 184 The colour plate section can be found following p. 132 Contributors Ian Coxhead, Department of Agricultural and Applied Economics, University of Wisconsin-Madison, 427 Lorch Street, Madison, WI 53706, USA; e-mail: [email protected] Antonio Dan˜o, Ecosystems Research and Development Bureau (ERDB), College, Laguna 4031, The Philippines; e-mail: [email protected] or [email protected] Marian delos Angeles, Environment Department, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; e-mail: mdelosangeles @worldbank.org Bayou Demeke, Department of Agricultural and Applied Economics, University of Wisconsin-Madison, 427 Lorch Street, Madison, WI 53706, USA; e-mail: [email protected] William Deutsch, International Center for Aquaculture and Aquatic Environments, Department of Fisheries and Allied Aquacultures, Auburn University, Auburn, AL 36849, USA; e-mail: [email protected] Victor Ella, Land and Water Resources Division, Institute of Agricultural Engineering, College of Engineering and Agro-Industrial Technology, University of the Philippines at Los Baños, College, Laguna 4031, The Philippines; e-mail: [email protected] Kwansoo Kim, Department of Agricultural Economics and Rural Development, Seoul National University, Gwanak Campus Bldg 200, Seoul, Republic of Korea; e-mail: [email protected] David Midmore, School of Biological and Environmental Sciences, Central Queensland University, Rockhampton, QLD 4702, Australia; e-mail: [email protected] Todd Nissen, Bureau of Economic and Business Affairs, U.S. Department of State, 2201 C Street, NW, Washington, DC 20520, USA; e-mail: [email protected] Jim Orprecio, 550 Mehan Street, Parkshomes Subdivision, Muntinlupa City, The Philippines; e-mail: [email protected] vii viii Contributors Stefano Pagiola, Environment Department, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; e-mail: [email protected] Eduardo Paningbatan Jr, Department of Soil Science, University of the Philippines at Los Baños, College, Laguna 4031, The Philippines; e-mail: [email protected] Durga Poudel, Department of Renewable Resources, University of Louisiana, Lafayette, LA 70504, USA; e-mail: [email protected] Agnes Rola, Institute of Strategic Planning and Policy Studies, University of the Philippines at Los Baños, College, Laguna 4031, The Philippines; e-mail: [email protected] Gerald Shively, Department of Agricultural Economics, Purdue University, 403 West State Street, West Lafayette, IN 47907, USA; e-mail: [email protected] Charles Zelek, US Department of Agriculture, Natural Resources Conservation Service, 14th and Independence Ave., SW, Washington, DC 20250, USA; e-mail: [email protected] Grant Zhu, School of Biological and Environmental Sciences, Central Queensland University, Rockhampton, QLD 4702, Australia; e-mail: [email protected] Preface High rates of hillside erosion and downstream sedimentation are among the most important agricultural externalities in the developing world. Suspended solids reduce the quality of water for human consumption. Silting of streams increases the risk of flash floods. Accumulation of silt in coastal habitats reduces productivity of aquatic ecosystems and accumulation of sediment in reservoirs reduces hydroelectric capacity and accelerates wear on turbines and power-generating equipment. Of additional concern is that erosion from upland farming creates sediment in downstream irrigation systems, reducing both their productivity and expected life. The last of these concerns is espe- cially important in light of evidence that a lack of reliable water supply pre- cludes expansion and intensification of agriculture in many low-income areas of Asia. In response to these and other environmental concerns, the protec- tion and management of watersheds has become a policy imperative through- out the developing world, and especially in densely populated regions of South and South-east Asia. The importance of studying watersheds in an integrated way, using an approach that combines biophysical and socio-economic perspectives, is well established. Researchers engaging in watershed-level analysis have empha- sized physical characteristics of upstream externalities, and in some cases have made important progress in modelling the main hydrological processes asso- ciated with downstream damages. In this book our colleagues and we take up the task of understanding processes leading to watershed degradation by examining the local and national policy environment in which decisions regard- ing land use are made. Our study focuses on the Manupali River watershed in the Philippine province of Bukidnon. The research described here encapsu- lates studies that have been conducted over more than a decade and includes examinations of biophysical, economic and social processes and their inter- connections. Our analysis explicitly accounts for the fact that, in the Manupali River watershed, as in many tropical watersheds, rates of land degradation are ix x Preface strongly influenced by the decisions of upland farmers. These decisions, in turn, are influenced by the interplay of wages, prices, institutions and oppor- tunities in the general economy. The work presented in this book provides important generalizable insights into the drivers of environmental outcomes in rural and frontier areas of devel- oping economies. Our efforts build on a large and growing body of empirical research undertaken at the microeconomic, sectoral and general equilibrium levels. Much of this economic foundation comes from research (including extensive fieldwork) conducted in the watershed. Our findings show that the policy context of land degradation is complex and involves economic incen- tives and constraints that are determined by local, provincial and national level policymakers. An important objective for policymakers is to find ways to pro- mote sustainable agricultural activities in sloping and upland areas, many of which provide unvalued or severely undervalued ecosystem services. These environments are typically characterized by ecological richness but human poverty. As prior studies have shown, land degradation resulting from high rates of erosion presents an especially significant problem to watershed com- munities. The main story that emerges from this book is that rates of
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