Part 2: Protected areas and development
2.5 Benefits of protected areas for the poor
This section explores further how protected areas can enhance the flow of benefits to poor communities living in and around them, especially compared to intensive cultivation through agriculture, forestry and aquaculture. In part the strategy needs to help poor communities better secure subsistence uses for basic livelihoods and to capture existing market opportunities. As important, the strategy must develop
effectives transfer payment schemes which recognise in financial terms the contributions of poor communities to the conservation of protected areas.
2.5.1 Securing sustainable livelihoods
Important reasons for conserving natural habitats are the diversity of products they provide to rural households, their latent availability as “fall back options” in times of stress, and their common access.
These conservation functions are especially important to the poorest and most vulnerable people, whose primary concern is basic sustenance and who tend to profit least from intensive cultivation and other commercial development of natural resources.
2.5.2 Diversity of products
Natural habitats provide a diverse and comprehensive package of benefits in a way incomparable to agriculture, forestry or aquaculture. They are important for the wide variety of products needed to support livelihoods. For example, forest products in Southeast Asia contribute to:
… food security in the form of staples, or, more frequently, nutritional supplements, such as snacks and side dishes, and buffers against seasonal and emergency shortages; health care in the form of
ingredients in traditional medicines (for which substitutes may not be available or affordable); raw materials for building and implements for household use or for use in support of other economic activities – agriculture, fishing, hunting or small-scale processing and manufacturing enterprises; and, finally, income and employment from the collection, trade or processing and manufacture of non-timber forest products (DeBeer and McDermott 1996).
Most communities around terrestrial protected areas are primarily agrarian. But the wide variety of products from forests serves as an essential support, as well as providing a range of livelihood options to make ends meet and diversify risk. Wetlands and other natural aquatic environments serve similar functions, as discussed in the chapters on fisheries and water resources in this report.
3 A case study of the Cat Tien National Park experience is presented on the PAD Review CD-ROM.
2.5.2.1 Natural safety nets and fall back options
Natural habitats have a vital function as “natural safety nets” and in providing “fall back options”. They enable households to bridge periods of seasonal food shortage, provide alternative foods when crops are lost to natural disasters or fail for other reasons, and offer a ready source of cash income in times of crisis and emergency, such as sudden illness or death. This point deserves special emphasis because of its importance to the poorest communities.
2.5.2.2 Common access
Typically, the poor have common access to the benefits of natural habitats, though traditional tenure arrangements vary considerably among local communities. However, a common dilemma in converting land into agriculture, forestry and aquaculture is that benefits tend to be channelled toward economically better off households with more land, labour, capital, skills, knowledge, experience, risk tolerance and political influence. Even when agricultural land is allocated to poor households, it may be sold or
otherwise absorbed into larger landholdings by more powerful neighbours, as occurred around the South- West Cluster Protected Areas in Cambodia in 1979, when “villagers were allocated equal portions of land, although due to a shortage of draft animals much of this land was abandoned to those who had the resources to cultivate it” (ICEM 2003g). In Vietnam, many ethnic minority groups sold and lost allocated land to lowland immigrants for these and other reasons.
Some analysts consider forestry as having “anti-poor characteristics” because it favours intensive inputs in capital, technology and skills; large economies of scale; and specialised consumer markets (Sunderlin et al. forthcoming). Experiences with commercialisation of NTFPs in Vietnam showed promising results for domesticators, but not for the poor who depended on the common fallow lands that were being converted into privatised NTFP domestication plots (Morris et al. 2002). The PAD Review field study of Tam Giang and Cau Hai protected areas in Vietnam describes how the development of aquaculture for shrimp farming has created risks for lagoon conservation and the poor people who depended on them, for example, by concentrating ownership of the area, eliminating fish breeding habitat and undermining capture fisheries (ICEM 2003g).
Natural habitats tend to promote common accessibility, which is especially important for poor stakeholders that lack resources to invest in intensive cultivation. For example, when a poor community in Lao PDR ranked options for cultivating frogs, they preferred managing natural breeding grounds to frog
domestication (Box 2.1). Their reasons were that domestication favoured wealthier households that could afford the investment costs, easily acquire technical expertise, tolerate risk, and employ labour. Among the benefits of managing natural breeding grounds was an equitable share of benefits.
Box 2.1. Community Analysis of Frog Management Options
In southern areas of the Lao PDR, frogs and fish are the most valuable non-timber forest products harvested from the wild for rural household subsistence and the most important source of protein the diets of the Lao people (Clendon 2000). Yet their availability in recent years is the most rapidly declining of food resources . Over-exploitation of frogs is one of the direct causes leading to the reduction of wild frog populations and in turn increasing risks of food insecurity of local people.
A Department of Forestry and IUCN project considered a range of alternatives for conserving frog populations and securing food supply. In a survey of community views it was found that
domestication of frogs was considered not appropriate because of the risks of introducing new frog species in the environment, relatively high investment costs and lack of equitable benefits for all households. The community felt that natural frog management was a more realistic option to be tested, as shown in the following table:
Source: Deschaineaux 2001
Although converting natural habitat into agriculture, forestry or aquaculture may have a higher economic value; it may bring fewer benefits to the poor, where key concerns are livelihood security and access to the resource base. As local economies strengthen, these types of direct benefits from natural habitats may lose significance (Arnold 2001). But for many poor communities, this level of development is a long way off and—if world trends in poverty are any indication—may be elusive. In the meantime, natural habitats remain vitally important and one of the most serious threats facing these communities is the dwindling quantity and quality of the natural resource base, giving protected areas a special and increasing significance for the poor.
2.5.3 Market opportunities
Awareness has been increasing about the potential of protected areas as tourism destinations. Tourism, along with emerging markets for NTFPs, present two of the most important market opportunities for generating revenues from protected areas. The following section assesses protected areas as revenue- generating mechanisms through transfer payments. However, market options bring a mixed bag of
opportunities and threats to local communities that will have to be managed appropriately if they are to benefit the poor.
2.5.3.1 Tourism
Chapter 8 on tourism shows how protected areas in the region have generated significant revenues from tourism and concludes that the potential value has yet to be fully realised. But the recurring challenge is to direct benefits towards the poor and minimise the negative impacts of tourism. The PAD Review field studies found examples of tourism development which have generated few benefits for the poor, exacerbated local inequity, precipitated conflict and degraded the eco-systems upon which poor communities depend (ICEM 2003g). Yet, a number of strategies can be employed to bring equitable outcomes, particularly through direct payments into effectively managed community or protected area funds, as discussed later in the chapter. The point to be made here is that tourism development alone is unlikely to benefit the poor living in and around protected areas, without assistance and a financial mechanism to ensure that it contributes positively to the socio-economic development of local communities.
2.5.3.2 NTFP Commercialisation
Commercialisation of NTFPs has held great promise for the ICDP movement by giving poor communities economic incentives to conserve forests, or by providing income alternatives to natural forest extraction through NTFP domestication. But, as with tourism, NTFP commercialisation alone is unlikely to benefit the poor. NTFP commercialisation has the potential to further entrench extractors in poverty (especially when led into debt cycles with traders), NTFP domestication to break down common tenure regimes essential to the poor, and improved NTFP processing to disenfranchise women as technology becomes more
sophisticated, labour returns increase and processing is centralised (Neumann & Hirsch 2000).
Specific mechanisms to redress existing inequities are needed if NTFP commercialisation is the work for the poor, for example, by empowering local decision making structures and providing for benefit-sharing.
The establishment of a marketing group and community fund for the collection of bitter bamboo shoots in an NTFP Project in Lao PDR proved effective for securing a higher market price for the local community and generating communal benefits, such as an
improved water system, land for agriculture and livestock, loans to farmers and a new school (Box 2.2).
Tourism and NTFP extraction will not be possible for all protected areas, depending on access, attractions, natural products, and specific conservation objectives. But where they are feasible and if appropriately planned and managed, they can provide key economic opportunities for poor communities. Although there are some doubts about integrating biodiversity conservation with NTFP
commercialisation, as discussed in the chapter on forestry, more testing is needed to assess the conditions under which this can continue within protected areas.
Box 2.2: Marketing group and community fund for bitter bamboo shoots
In the village of Nam Pheng, Oudomxai, villagers used to be very poor and could not produce enough rice to feed the community all year round. In the dry season they collected off-season bamboo shoots for sale, but the income was never enough. The IUCN/NTFP project assisted them in analysing their problems (Soydara 2000).
In a series of meetings, the community gradually realised that they could improve their sales if they would team up and sell for a fixed price, in a fixed place, not measured per bundle but measured per kilo. The community continued to discuss this idea until every family agreed to join the village selling group. The results were above all expectations. In five months, the village sold more than 50 tons of shoots and earned 50 million kip (on average 1 million per family), at least four times more than the year before. The community also gained 5 million kip in a village development fund, setting aside 100 kip for every kilo sold (US$1 was 2,500 kip in the first half of 1998). As a result, the community started to be very interested in monitoring and managing its bamboo forests.
Between 1998 and 2000 the group fund accumulated 17,000,000 kip through sales of bitter bamboo and later also cardamom. It was decided that funds from 1998-99 would be spent on improving the village’s water system and for providing land for development of agriculture and livestock. In 2000, 15 families received loans from the fund for a variety of purposes, both agricultural and non-agricultural. Examples of items bought included generators, hand tractors and house building materials. In May of 2000, the development fund was put towards the building of a new school and this was made possible through the provision of extra materials from the IUCN-NTFP project.
Source: Nurse and Soydara 2002
2.5.4 Transfer payments for goods and services
Increasingly, environmental transfer payments are being used as a mechanism to target poor land holders and resource users who live in and around protected areas. The rationale is that without tangible benefits poor communities are likely to be unwilling—or economically unable—to conserve protected area
biodiversity. Transfer payment mechanisms are designed to ensure that the public or private sector beneficiaries of protected area goods and services pay for their use; with a proportion of the revenue
“transferred” to the local communities who bear the opportunity costs of conserving them. Transfer payments can be a key mechanism for financially recognising the contributions of local communities in protected area conservation and developing a more equitable distribution of its costs and benefits.
The concept of transfer payments incorporates a wide range of mechanisms and vehicles for payment.
They can be broadly differentiated according to whether implemented through commercial markets or require some degree of public or other intervention, as well as between those that remunerate poor communities directly and those that contribute indirectly to socio-economic development or poverty alleviation activities. Five broad categories of environmental transfer payments relating to protected areas can be defined as:
• Direct transfer of income:Direct transfer of income:Direct transfer of income:Direct transfer of income:Direct transfer of income: Ensuring that direct income from the marketing or sale of biodiversity products accrues at the local level (such as through tourism or NTFP markets, as discussed earlier).
• Fiscal instruments:Fiscal instruments:Fiscal instruments:Fiscal instruments:Fiscal instruments: Using subsidies or other fiscal instruments to support credit, technologies, training, prices or markets that will encourage biodiversity conserving activities or stimulate a shift away from biodiversity degrading activities.
• Payments for environmental services: Payments for environmental services: Payments for environmental services: Payments for environmental services: Payments for environmental services: Many upland and mountain communities manage landscapes
that provide environmental services to outside beneficiaries, but without sharing in the benefits of those services. The services include clean and abundant water supplies from watersheds, biodiversity protection, and stocks of carbon that alleviate global warming.
• Revenue sharing:Revenue sharing:Revenue sharing:Revenue sharing:Revenue sharing: Allocating or reallocating a portion of charges, fees or taxes raised from biodiversity- dependent sectors of the economy to poor communities around protected areas.
• Targeted reallocation of public and donor budgets:Targeted reallocation of public and donor budgets:Targeted reallocation of public and donor budgets:Targeted reallocation of public and donor budgets:Targeted reallocation of public and donor budgets: Earmarking government or donor funds for poor communities around protected areas.
In the Lower Mekong region there is as yet very little use of environmental transfer payments that are targeted specifically to poor communities, although transfer payments are increasingly being used to fund broader protected area management.
2.5.4.1 Fiscal instruments
There are many possibilities for using fiscal instruments as a means to target poor communities around protected areas. These include the provision of subsidies and lower tax rates for credit for sustainable resource use activities and enterprises, clean or sustainable technologies and production processes, biodiversity-based products and land uses, and alternatives to biodiversity-degrading products and livelihoods.
Several examples exist in the region where fiscal instruments target biodiversity conservation among poor communities. Vietnam allows exemption from land tax for the poorest communes, including many located around protected areas. For more than a decade Vietnam has also operated a user pays system through its Natural Resource Tax, which now goes directly to provincial level. Lao PDR has reduced land taxes for reforestation and stabilised land use, and exemptions on turnover tax for forestation activities.
2.5.4.2 Payment for environmental services
Payments to communities, resource users or land holders for the provision of environmental services can take various forms. Services include the provision of biodiversity, watershed management and carbon sequestration, with payments from either public or private sector beneficiaries, such as hydropower providers, polluting industries, bio-prospecting firms and water users.
Several examples of the application of payments for environmental services exist within the region. In Mae Chaem watershed in northern Thailand, CARE International has helped to broker agreements between the Royal Forest Department and Forest Conservation Committees in approximately one hundred villages.
These agreements involve recognition of local land rights on state forest land by the Royal Forest Department in exchange for abandoning shifting cultivation for sedentary agriculture and respecting mutually agreed forest boundaries. In Vietnam, Forest Protection contracts currently cover about 1.6 million ha, paying nearly 250,000 local households an annual fee to maintain and protect areas of forest.
Opportunities to use the emerging global market for carbon sequestration services to negotiate payments for community agro-forestry and reforestation around protected areas are currently under investigation in both Cambodia and Vietnam. In the Lao PDR, an innovative system of payment for watershed catchment protection services is being piloted in two of the country’s protected areas. Phou Khao Khouay NBCA currently receives 1 per cent of the gross revenues of power exports from a downstream hydropower dam, and the proposed Nam Theun 2 hydropower project will provide over US$1 million a year for the
management of the Nakai-Nam Theun NBCA.
2.5.4.3 Revenue sharing
In many parts of the world, protected area revenues are shared directly with local communities, either as cash payments to individuals or as contributions to more general socio-economic development activities in buffer zones. That kind of arrangement is beginning to emerge in the region. In Cat Tien National Park in
Vietnam, for example, a trust fund is under development that earmarks 1 per cent of park entry fees for expenditure on community development activities in the buffer zone and a National Conservation Fund being planned will provide financial support to local activities which help to meet protected area conservation objectives.
2.5.4.4 Targeted allocation of public and donor budgets
Throughout the region, central and local government authorities make budget allocations to communities around protected areas. In many cases, the allocations target activities that are related to biodiversity conservation and poverty alleviation. In some cases these expenditures are channelled through PA authorities. Yok Don National Park in Vietnam, for example, is in the process of finalising a Buffer Zone Investment Plan that will support biodiversity conservation among poor communities adjacent to the park and supplement expenditures already made by line agencies.
Perhaps the most common form of the transfer of donor and government funds to poor communities around protected areas is through ICDPs. Although there are no experiences of the direct sharing of protected area revenues with surrounding communities, these projects present many examples of investment in alternative income generating activities in protected area core and buffer zones. Typically they include activities such as the promotion of local participation in protected area tourism, improved agriculture, and handicrafts production.
In Lao PDR, external financing provides a major source of support to the state budget, and also forms an important component of funding to biodiversity conservation. Currently a total of 62 ongoing donor- supported projects and programs deal specifically with biodiversity conservation, running between 1993- 2003. Together they are worth US$150 million (out of a total of 383 projects and programs worth US$947 million), with an average expenditure of US$16.9 million a year. Expenditures on forests and protected areas comprise just over a quarter of this amount, almost all of which include components dealing with poor communities living in these areas of high biodiversity. These funds are important because they represent an attempt to share the costs of global biodiversity conservation and eco-system health between wealthy and poor nations (i.e., wealthy nations financially compensate poor nations for direct and
opportunity costs). However, they have been inadequate and current trends show a steep downward trend in donor investments in biodiversity conservation generally and protected area projects specifically. After having risen steadily throughout the 1990s, total donor commitments to biodiversity conservation have fallen from US$35.6 million in 2000 to US$14.3 million in 2003, while the share of protected area funding has dropped every year from 89 per cent in 1996 to only 7 per cent by 2003 (Emerton et al. 2002).