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Economic Valuation of Wetlands
T. V. Ramachandra, R. Rajinikanth and V.G. Ranjini
Energy & Wetlands Research Group, Center for Ecological Sciences, Indian Institute of Science, Bangalore
http://wgbis.ces.iisc.ernet.in/energy/

RESULTS AND DISCUSSIONS

Status of a wetland depends on its management, level of anthropogenic activities, management of land, solid waste collection, and disposal, disposal of used water and attitude of the people at large. Urbanisation and anthropogenic stress to meet the growing land needs of Bangalore City have resulted in disappearance of wetlands, which has led to the discontinuity of the drainage network. Studies in Bangalore city reveal about 35% decrease in number of water bodies from 1973 to 1996 (Deepa, et al., 1998). Earlier investigations have revealed that nearly 30 % of lakes are used for irrigation. Fishing is being carried out in 25 % of lakes surveyed. About 36 % of lakes are used for washing purposes and only 3% are used for drinking purposes. Agriculture along drying margins is practiced in 21% of lakes. Approximately 35% of lakes are used for grazing by cattle. Mud lifting was recorded in 30 % and brick making in 38 % of the lakes (Krishna, et al., 1996).

Economic valuation was undertaken in three lakes namely Hebbal, Amruthalli and Rachenahalli lakes. Hebbal and Amruthalli lakes are situated in Bangalore North taluk (east of Bellary road) while Rachenahalli is situated in Bangalore South and North taluks.

1. Hebbal lake

To assess the importance of Hebbal lake, a socio-economic survey was carried out in the catchment areas of the lake. A random survey of the houses situated within 1-km radius from the lake was carried out, using a questionnaire designed for the purpose. The study was done in four areas around the lake namely Hebbal, Guddadahalli, Bhoopasandra and U.A.S. Layout. The first three areas (Hebbal, Guddadahalli, and Bhoopasandra) were semi-urban and the last one (U.A.S. Layout) was completely urban (Ranjani V.G and Ramachandra, T.V, 1999). The economic valuation of wetland resources was done on the basis of Contingent Valuation Technique. Table 2 gives the economic details of lake water benefits in terms of rupees.

Table 2: Results of the socio-economic survey

Area Domestic
(per 1000 people per day)
Agriculture
(per ha. per day)
Livestock
(per 1000 animals every 2 days)
Water use         Fodder
Hebbal Rs. 1937.50 Rs. 19.00 Rs. 2170.80     Rs.33500.00
Guddadahalli Rs. 1603.30 Rs. 19.00 Rs. 1250.00     Rs 37500.00
Bhoopasandra Rs. 1547.80 Rs. 5.00 Rs. 1270.80     Rs. 16666.70
U.A.S.Layout Rs. 1547.00    

1.1. Livestock: The dependency for fodder is about Rs. 33,500 per 1000 cows for every two days in the catchment area of Hebbal Lake. The dependency for the livestock on the lake water amounts to about Rs. 2170.8 per 1000 cows every two days. The dependency in the Guddadahalli area for fodder is about Rs.37, 500 per 1000 cows every two days and the remaining Rs.1250 per 1000 cows every two days is the amount for water needed in economic terms to maintain the livestock. The total dependency for rearing livestock amounts to Rs. 38,750 per 1000 cows every two days. In Bhoopasandra area, the economic dependency for the livestock rearing is Rs. 17,937.5 per 1000 cows every two days. The dependency for water amounts to Rs. 1270.8 per 1000 cows every two days and for fodder, Rs. 16,666.7 per 1000 cows every two days. Here, people rear cows to earn a living and sell the milk in the surrounding areas. The fodder available in the local market is very expensive and therefore people use the weeds in the lake as fodder, a cheap source of food.

1.2. Agriculture:  Agriculture is still practiced in certain parts of Hebbal, Guddadahalli and Bhoopasandra areas. Many of these areas use the lake water for irrigating their fields (for growing a variety of greens). The dependency in the Hebbal lake catchment for irrigation is around Rs. 19 per hectare per day. The dependency in the agriculture sector for Guddadahalli area is Rs. 19 per hectare per day. This area also, like Hebbal is primarily agricultural, and dependent on the lake or ground water for irrigation. In the Bhoopasandra area, the dependency on the lake for agriculture is about Rs. 5 per hectare per day. This is because, a lone farmer in the area owns a coconut grove and he uses the lake water as well as the treated water to irrigate the land.

1.3. Domestic sector: The dependency for the domestic sector was calculated by determining the water use per individual. In the Hebbal area, the dependency was Rs. 1937.5 per 1000 people per day. While in Guddadahalli area, it was about Rs. 1603.3 per 1000 people per day, and Bhoopasandra area, Rs. 1547.8 per 1000 people per day. In the UAS layout, the dependency is Rs. 1547 per 1000 people per day. Residents in Hebbal area depend on ground water for their daily use more than the other areas, as they lack access to treated water supply.

The dependency was the highest for livestock maintenance since, fodder for the livestock is completely obtained from the lakes. The agricultural dependency is low in the areas ranging from Rs.5 to about Rs.19 per hectare. With lake restoration, the agricultural dependency has increased, as the people have relatively clean water of the lake. The dependency of the domestic sector ranged from Rs.1547-1937.5 per 1000 people per day. This dependency was highest in Hebbal area, as the people there depended on the ground water for their daily needs. An interesting thing that came into notice was that the people there used more water for bathing and the water used for bathing alone per individual was much higher than the surrounding areas. Though Guddadahalli is also dependent on ground water for its daily needs, the dependency was less compared to Hebbal. The other areas (Bhoopasandra and U.A.S. Layout) have access to treated water, and so the people do not depend much on the ground water to satisfy their daily needs.

2. Rachenahalli and Amruthalli lakes

Socio-economic valuation was undertaken in two lakes, namely, Rachenahalli and Amruthalli, to assign quantitative values to the goods and services provided by these wetlands. The economic value was measured in terms of public willingness to pay for the commodity. Total valuation assessment approach was used to assign the value of particular wetland as a whole in terms of rupees. This economic valuation concerned ultimately with the allocation of wetland resources to improve human welfare.

Socio-economy survey was conducted to:

  1. quantify the values of wetland resources; and
  2. determine the economic dependency of the people living in the surrounding areas on these lakes.

Approximate valuation of wetland resources based on their use values (human dependency and interactions with the wetland resources) and non-use values (no interactions with the wetland resources) were determined by conducting interviews with the local communities. A random survey of the houses around the lake was carried out using a standard questionnaire format exclusively designed for this purpose (Rajinikanth.R and Ramachandra, T.V, 2000). It contains information on various human uses of wetlands for irrigation, domestic, recreation, food, energy and livestock uses as a direct use value. The economic dependency of the people residing closer to wetlands is shown in Table 3 and the values are expressed in rupees. Ground water table is provided as an indirect use value, and biodiversity, culture and heritage as non-use values in Table 4.

Table 3: Socio-economic details

ITEMS Quantity of Amruthalli lake resources Amruthalli lake value in Rs Quantity of Rachenahalli lake resources Rachenahalli lake value in Rs
Domestic consumption 277.9 l/ house/day 1.667/house/day 214.97 l/house/day 1.289/house/day
Livestock consumption  59.28 l/Cow/day 35.5 /100 cows/day 60.39 l/cow/day 36.18 /100 cows/day
Agricultural consumption 7201.02 l/ Hectare/day 43.19/hectare/dsay 12087.8 l/hectare/day 72 /hectare/ day
Agricultural products:
Paddy:
Ragi:
Flowers:
Guava:
Vegetables:
Coconut:

15.1Q/ha/0.5year
7.6Q/ha/0.5year
3.95Q/ha/year
74.23Q/ha/year
--
3000Nos./ha/yr

21140/ha/0.5year
4560/ha/0.5year
11847.9/ha/year
37115/ha/year
-, - 
11253/ha/year

32.00Q/ha/year
12.5Q/ha/0.5year
6.64/ha/year
60.1Q/ha/year
7.69Q/ha/year
5100.2Nos. /ha/yr

44814/ha/year
7500/ha/0.5year
19920/ha/year
30050/ha/year
10381.5/ha/year
19125/ha/year
Energy resource 0.47Kg /person/day 117.5/1000 persons/day 1.298 Kg/person/day 324.5/1000 persons/day
Fishing products ----- ------- 75 Kg./day 900/day

Table 4: Valuation of Rachenahalli and Amruthalli lakes

Lake                         Direct use

Use                                           Value in Rs
Indirect value Existence value
Rachenahalli * Agricultural                             9173.0
* Fuel                                        324.5 
* Fish                                        900 
* Livestock consumption          37.5
Total                                        10435.00
*Ground water table varies from
Text Box: 50 ft (vicinity of  lake)  250 ft (at 2-3 km away from lake)
*It has greater capacity to retain flood waters from heavy rainfall and disposal of treated water from JNCASR
* birds and migratory birds
* culture and heritage value
* pooja during festivals
Result Total value is Rs. 10435 per day ,during cropping and fishing season. Ground water recharge and flood protection is increased due to pervious lakebed. Functional aspects, bio- diversity and cultural, recreational aspects indicate importance of the wetland eco system.
Amruthalli Use Value in Rs. * Ground water table varies from
180ft (vicinity of lake)
400ft (3 km away from the lake)
* It has lower flood protection value.
*Existing lake has no culture, heritage and biodiversity value
* Fuel
*Livestock consumption
12.5
7.5
Result Total value is Rs. 20.0 per day. Lower value is due to eutrophic condition of the lake which has made the wetland resources unusable It has no ground water recharge and fewer flood control values mainly due to impervious lake bed resulting from the accumulation of silt. This is due to pollution because of anthropogenic activities in and around the lake.

Five villages were selected in this regard, namely Amruthalli (around Amruthalli Lake) and Rachenahalli, Mestripalya, Srirampura, and Dasarahalli (around Rachenahalli Lake). The valuation of wetland products was done using Market prices method and Contingent Valuation method with respect to public willingness to pay. By conducting this study, the requirements of the local communities and their economic dependency on the wetlands can be assessed.

In the case of Rachenahalli lake (by surrounding villages) the estimation is about Rs. 10,435/day (during cropping and fishing season) and Amruthalli lake is about Rs.20.0/day. This shows that, the economic dependency in the case of Rachenahalli lake is more than that of people living around the Amruthalli lake due to better water quality and ecosystem, which is explained in detail below.

2.1. Agriculture: Wetlands are an obvious source of water for agricultural use. The economic dependency in Rachenahalli lake catchment for irrigation and its products is about Rs. 9173.0 per day, during cropping season. While Amruthalli lake, has no agriculture value. This is mainly due to decline in the water quality and quantity mainly due to eutrophication and drying of water during summer seasons.

2.2. Fuel: Rachenahalli and Amruthalli lakes also yield fuel wood for cooking and heating . The economic dependency of communities in Rachenahalli lake is around Rs. 325 per day, while in Amruthalli lake it is about Rs.13 per day.

2.3. Fish: Wetlands also provide food for local communities in the form of fish and has socio-economic value attached to it. The dependency of the community on Rachenahalli lake is about Rs. 900 per day, during fishing season. But Amruthalli lake has no value due to lack of oxygen concentration or oxygen deficiency, light  (transparency) and temperature.

2.4. Livestock: The economic dependency for livestock in the Rachenahalli lake water is about Rs.37 per day and in Amruthalli lake, it is about Rs. 7 per day. This mainly depends on the quality and availability of water in the wetlands. Amruthalli lake has lower value due to eutrophic condition of the lake which has made the wetland resource (water) unusable.

The ground water table of Rachenahalli lake ranges from 50 ft in the immediate vicinity and 250 ft at farther places (2-3 kms), while in the surrounding region of Amruthalli lake ground water table ranges from 180 – 400 ft. This is mainly due to sediments accumulated in lake-bed becoming impervious, which hinders recharging. Sediment accumulation is due to siltation, which is a result of removal of vegetative cover in the catchment area. Apart from this, waste disposal in lake has resulted in eutrophic condition of the lake as a consequence of urbanisation and industrialisation.

Amruthalli lake is degraded mainly due to siltation, excessive input of domestic sewage, street and industrial effluents and dumping of organic waste materials from the surrounding areas. These have turned the lake eutrophic. Due to this, the economic dependency of people living in the surrounding area has become less. To avoid eutrophic conditions and to improve the economic dependency of people residing closer to the lake, appropriate conservation and restoration strategies are needed.

3. Action plan for conservation of wetlands

Investigating the economic benefits of wetlands is a step in the direction of formulating Wetlands Conservation Action Plan (WCAP). The WCAP should be a cooperative programme involving government and non-governmental organisations in efforts to establish a comprehensive wetlands conservation programme for restoration, conservation and management of wetlands. The goal is to create, reclaim, rehabilitate and protect wetland habitat in the watershed basin or a catchment based on ecosystem management approach. The strategies towards this goal are (Ramsar, 1971):

  1. increase public awareness and commitment to protect wetlands from becoming extinct through a variety of outreach materials and activities;
  2. develop a wetland database and increase understanding of wetland dynamics;
  3. promote the wetland conservation in State protected areas;
  4. enhance co-operation among State, District, Regional and Non Government partners;
  5. strengthen legislation, policies, agreements and compliance;
  6. strengthen local planning and commitment to protect wetlands;
  7. improve coordination and planning between government and non-governmental organizations; and
  8. evaluate the outcomes of the programme and ensure a sound scientific basis for policy.

4. Wetland Policy Guidelines

The objective of policy with respect to wetland conservation is to promote the conservation of wetlands to sustain their ecological and socio-economical functions, now and in the future (Lake 2000, 2000). Towards this end, the goals are,

  • Maintenance of the functions and values derived from wetlands;
  • No net loss of wetland functions in regional lands and water;
  • Enhancement and rehabilitation of wetlands where the continued loss or degradation of wetlands or their functions have reached critical levels;
  • Recognition of wetland functions in resource planning, management and economic decision making with regard to all national/state programmes, policies and activities;
  • Securement of wetlands of significance;
  • Recognition of sound, sustainable management practices in sectors such as forestry and agriculture that make positive contribution to wetland conservation while also achieving wise use of wetland resources; and
  • Utilisation of wetlands in a manner that enhances prospects.

4.1. The wetland policy at State level provides:

  • A signal of commitment to wetland conservation and acts as a catalyst for mutually supporting action across the region;
  • A heightened profile for the issue to call attention to wetland, socio-economic and environmental benefits, to ensure that wetlands receive adequate consideration by the State government;
  • Direction and support for individual decision makers to ensure that opportunity for the sustained wise use of wetlands is realized, to avoid or reserve wetland related conflicts;
  • Clarification of specific State responsibility for wetlands, as well as a synthesis of existing legislation, policies and programmes which already contribute to wetland conservation:
  • A consistent, co-ordinated approach among the many State agencies, which influence wetlands, aimed at adjusting activities, which conflict with wetland conservation and ensuring progress towards specific objectives and goals.

A comprehensive policy on wetlands needs to be formulated to enhance the quality and increase the spatial coverage specific to the region, to offer some of the most environmentally productive and cost effective opportunities for wetland conservation. The objectives should focus on addressing the following aspects,

  • To reverse the current decline in the wetland base, ensuring no net loss and long-term net gain in the quality, quantity and permanence of wetlands.
  • To encourage partnerships in restoration, management, usage, through co-operative planning efforts with the primary focus on wetland conservation.
  • Draft procedures for administration of wetland usage and its conservation.

The emphasis is placed on the formation of Regional Wetlands Forum, involving local educational, public and private organisations (involved in wetland issues). For effective functioning, the forum should consist of researchers, school and college-students and teachers, economists, policy makers, representatives from the agricultural community, developmental concerns, conservation organizations, state and local agencies under the collaboration efforts from the Ministry of Forest and Environment, Department of Science and Technology, Indian Council of Agricultural Research and planning departments with the following responsibilities. The policy should address the following.

  1. Define wetlands, classification (based on degree of saturation, type of vegetation, usage, soil etc), inventory, planning, wetland regulation, and conservation approaches (i.e., acquisition, restoration, management and education).
  2. Establish regional and state-wide goals to achieve long-term increase in wetland acreage, functions and values in emphasizing the economic uses (fishing, agriculture, drinking water supply, etc).
  3. Draft programmes for preservation, conservation, restoration, and enhancing wetlands acreage and provide technical and adequate funding for wetlands mitigation and management programmes.
  4. Develop consistent standards concerning wetland water quality, and guidelines for mitigation, monitoring and restoration efforts.
  5. Encourage actions that promote efficiency of wetland-related permitting processes for the varied usage of wetlands for economic purposes (as fisheries, irrigation etc) by suitable policies and creation of concurrent permit review procedures.
  6. Enhance co-ordination of governmental (state, central) and non-governmental organisations responsible for wetland conservation. Action oriented restoration and conservation programmes could be initiated and monitored through discussion meetings of academicians, and planning and implementing agencies for providing a platform for exchange of ideas.
  7. Help in the development of internal policies within state agencies like irrigation department, public works department, forest department, urban development and others that will encourage wetland conservation activities, which are compatible with programmatic goals of flood control, ground water recharge, water management, water pollution control, recreation, and others.
  8. Establish inter-agency task force responsible for co-ordinating and information exchange among the agencies, boards, and departments as necessary to ensure co-ordinated development and implementation of wetland conservation program.
  9. Integrate wetland policy and planning with other environmental and land use processes.
  10. Undertake cost-benefit analysis of the wetland resources derived by the society and economic evaluation caused due to the loss of wetlands.
  11. Advise government to provide funds for wetland research and conservation programs.
  12. Formulate Wetland Protection Act as a legislative vehicle to restrict any disturbance of wetlands leading to loss in biodiversity dependent on them.

5. Recommendations for effective wetland management are:

  • Integration of different Government Agencies for effective implementation of activities related to restoration of wetlands, their sustainable utilization and conservation.
  • A National Committee for Lakes and Wetlands reclamation, restoration and development is formed to formulate a National Policy to evolve strategies for their sustainable utilization and conservation.
  • A Comprehensive Plan is to be prepared to study selective, representative wetlands in a phased manner to create database with regard to their present status, sustainable use, management and conservation and to formulate strategies for their long-term management.
  • Regular monitoring of wetland ecosystems through the involvement of Schools, Colleges and Universities. Student's involvement including curriculum development concerning the protection of the wetland ecosystem.
  • Mass awareness programme be chalked out and implemented through Governmental and Non-Governmental Organisations (NGO) for popularization of the importance of the lakes, wetlands and rivers, and their role in the aquatic biodiversity and sustenance of human civilization.
  • Lakes and Ponds in each Zilla Panchayath area be identified and their streams recharged through people's participation. People should be made aware of wetlands’ significance so that reclamation and conservation of these water bodies be taken up effectively.
  • Fishermen's socio - economic aspects be taken into consideration while formulating wetland policies.
  • Education and training:
    Public needs to be better informed about the rationale, goals and methods of aquatic ecosystem restorations. In addition, scientists and researchers with broad training are needed for aquatic ecosystem restoration, management and conservation.
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Citation : T. V. Ramachandra and R. Rajinikanth, 2005. Economic Valuation of Wetlands. Journal of Environmental Biology, 26(3), 439-447.
* Corresponding Author :
  Dr. T.V. Ramachandra
Energy & Wetlands Research Group, Centre for Ecological Sciences,
New Biological Sciences Building, 3rd Floor, E-Wing, Lab: TE15
Indian Institute of Science, Bangalore – 560 012, INDIA.
  Tel : 91-80-22933099 / 22933503(Ext:107) / 23600985,
Fax : 91-80-23601428 / 23600085 / 23600683 [CES-TVR]
E-mail : cestvr@ces.iisc.ernet.in, energy@ces.iisc.ernet.in,
Web : http://wgbis.ces.iisc.ernet.in/energy
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