day 1 session 3.4 transaction cost of smallholder farmers’ participation in forest management....
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3rd Mekong Forum on Water, Food & Energy 2013. Presentation from Sessions 3 &5: Extending the benefits of hydropower: Clever suggestion or realistic goal?TRANSCRIPT
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Water for a food-secure world
Transaction cost of smallholder farmers’ participation in forest management: Policy implications on PFES schemes in Vietnam
Florence Milan, Areeya Manasboonphempool, Manfred Zeller
3rd Mekong Forum on Water, Food and EnergyHanoi, Vietnam
26-30 August 2013
1
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Challenges in Payments for Forest Environmental Services in Vietnam
High transaction cost associated with centralized management and many contracts with small scale service providers
Photo source: http://www.melville18.co.uk/accountancy.html
Constraints on participation due to high transaction cost
2
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Transaction cost in forest management
3
Institutions that effectively reduce transaction costs will endure (North 1990)
Searching for partner or group
Screening potential partner Negotiating to reach
an agreement
Transferring property rights
Monitoring the agreement
Source: http://vimeo.com/25636067
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Case study: Hoa Binh watershed
20 random villages in Da Bac District
15 household per village
1. Focus group discussions2. Baseline survey
300 households2. Transaction cost survey
3% attrition
4
What are the elements of transaction costs in different forest management schemes and how to improve scheme participation to achieve policy objective?
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Forest Management
5
9492
11278
14588
Total Planted Forest (hectares)
Poor Middle Well-off
1885
2028
1388
Average number of trees planted per hectare
Poor Middle Well-off
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Transaction Costs
6
Search & Screening Negotiation & Transfer Monitoring 0
2
4
6
8
10
12
14
16
Poor Middle Well-Off
DIFFERENT TRANSACTION COSTS
TOTA
L M
AN-D
AYS
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Transaction Cost Household vs Community
7
Information gathering Attending meetings
Conflict resolutions
Decision to participate
Administration of contracts
Monitoring
Enforcement of compliance
Negotiations
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Some determinants of transaction cost
8
Education of household head
Interest in intercropping
Seed support
Farmers’ union membership
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Conclusions and Policy Implications
9
Private transaction costs are major components of PES and are significant for uptake of PES contracts but difficult to quantify
Transaction costs are higher for poorer households To compensate for the higher transaction costs in poorer
households, there should be provisions for direct access to NTFPs and cash products
Further research on comparison of transaction cost associated with different forms of arrangements (household, community)
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THANK YOU!