Chapter I
Chapter I
INTRODUCTION
1.1. BACKGROUND TO THE PROBLEM
The Millennium Development Goals are a set of goals which all countries in the
world are trying to attain. These goals require implementation of a mix of
policies, including in poverty degradation and environment protection. Forest
protection is one of foremost targets in environmental policies in the world. In
recent years, there has been increasing evidence of the inverse impacts of
forest depletion on the environment such as global warming, climate change due
to the release of carbon, loss of biodiversity, higher intensity and frequency
of natural disasters, increased soil erosion, watershed degradation and
consequent downstream effects. Therefore, forest protection has been receiving
increased concern from the world community. In Vietnam, series of development
policies including the Comprehensive Poverty Reduction and Growth Strategy and
the Five Million Hectare Reforestation Program have been being carried out.
Despite the increasing demand for protection of natural forests, the intensity
and scale of forest use have significantly increased in recent years, mainly in
developing countries. According to the Food and Agriculture Organization of the
United Nations (FAO, 1993), the loss of forest area of the developing region
during period 1980-1990 amounts to 163 million ha, of which 154 million ha is in
the tropics. Tropical forests are being lost at the rate of 10 million hectares
annually, most of this due to shifting cultivation (Serageldin, 1993). National
governments in these countries, especially in
Indonesia, the Philippines, Thailand, and Vietnam, tend to blame shifting
cultivators, usually members of ethnic minorities, for rapid loss of forests
(Le, 1996).
Viet Nam is not an exception in the common picture of the developing world.
Under the Ministry of Agriculture and Rural Development (MARD, 2000), statistics
from Vietnam’s Department of Forestry Development show that more than half of
the country’s 19.08 million hectares of mapped forested land has now been
identified as bare hills and wasteland. Some 60,000 to 70,000 hectares of the
nation’s forests are destroyed every year. The World Bank (1995) estimates that
the principal causes of deforestation in Vietnam are agricultural encroachment,
firewood collection, logging, and fires in which agricultural encroachment,
shifting cultivation and firewood are the main contributors in the Northern
Mountain Region and the Central Highlands.
Vietnam remains one of the poorest countries in the world. With nearly 80% of
its population living in rural areas, Vietnam is dependent on its agricultural
and natural resources. The poverty rate is relatively high in upland, remote,
and isolated areas and ethnic minority areas. According to
Do
(1994), 50 of 54 ethnic groups in Vietnam practice shifting cultivation. He
estimates that 7% of Tay, 16% of Nung, 45% of Thai and 100% of almost all the
remaining ethnic minority groups are involved in slash-and-burn activities, a
main cause leading to deforestation and forest degradation.
how
the relationship between deforestation and poverty is?" is
established. With an increase in income, the poor may prefer to invest in
maintaining the quality of soil on existing cleared land, or increasing yields
by expanding agricultural areas.
Understanding how the poor make agricultural production and
investment decisions will help policy makers find effective solutions not only
to improve the living standard of poor people but also to slow the rate of
deforestation.
1.2. REVIEWS OF RELATED STUDIES
There are a lot of papers studying the situation of deforestation or poverty in
Vietnam, but only at the disaggregated level. A few of them are interested in
causes of deforestation, and poverty was implied to be one of the main causes,
directly or indirectly through shifting cultivation, increasing the rate of
deforestation in Vietnam.
The Center for Natural Resources and Environmental Studies (1998) shows that the
socio-economic root causes of biodiversity loss in the mountainous areas of
Northern Vietnam consist primarily of high natural population growth rates,
traditional agricultural and hunting practices, and the inefficiency of the
APCs. This paper also showed that poverty in Vietnam is the root cause of a
number of factors. As a rule, poor people are either landless or have been
pushed to areas of low agricultural potential with steep slopes and infertile
land. Poor farmers extract what they can from the environment to support
themselves, and have little time or resources to invest in resource conservation
or management.
According to Pham (1999), the violent spontaneous migration in recent years had
caused a lot of socio-economic as well as environmental problems for Dak Lak
province. The spontaneous migrants of which 30% belongs to more than 30 minority
groups, due to the lack of close control, clear good quality forests freely and
convert them to arable land. Most of them go deep into the forest to practice
shifting cultivation, even into nature reserve areas, and protected and special
use forests on the borders with neighbor provinces.
Similarly, Dang et al (2002) showed a bandwagon effect in coffee planting in the
Central Highlands. Many farmers even planted coffee on very slopping hillsides
or on the top of the hill where soil and water conditions were not suitable for
coffee. As a result, the yield was very low and caused high soil erosion.
The papers and studies mentioned above proved that poverty is one of the main
causes of deforestation. However, this relationship was only analyzed under the
description aspect. Further, due to the lack of generality, a comprehensive
picture of Vietnam has still been unclear and indistinct. Therefore, I choose
the topic "The link between poverty and
deforestation. The case of Vietnam" with the hope of overcoming these
defects.
By
focusing on the relationship between poverty and agricultural production and
investment decisions, this paper also contributes to empirical microeconomic
research on the behavior of rural smallholders in Vietnam.
1.3. FOCUS AND SCOPE OF THE THESIS
1.3.1. Focus
This thesis focuses on the key research question: "How
is the relationship between poverty and deforestation?” In order to
clarify this problem, some following sub-questions will be mentioned.
-
What roles does forest have? What are causes of deforestation? How does
deforestation affect sustainable development?
-
What is poverty? How is poverty measured? What are causes of poverty? How does
poverty affect sustainable development?
-
Are the relationships between agricultural inputs and income or between cleared
land and household size or borrowing constraints positive or negative?
-
What should the Government do to decrease poverty but not to increase
deforestation?
1.3.2.Scope
The thesis uses the information of poverty and deforestation in the period of
1993-1998 to run the model. Because of insufficient data and information, the
thesis only examines the relationship between income (instead of poverty
indicator) and cleared land (a main direct cause of deforestation). This study
uses a sample of 299 households having forest.
1.4. SOURCES OF INFORMATION AND METHODOLOGY
1.4.1. Sources of information
The study uses data from "Vietnam Living Standard Surveys" 1992-93 and 1997-98
that are collected by the General Statistics Office (GSO) with financial support
from United Nations Development Programme (UNDP) and Swedish International
Development Authority (SIDA) and technical assistance from the World Bank. This
thesis also uses other information sources from GSO and from newspapers, reports
and articles.
1.4.2. Methodology
The thesis applies poverty-deforestation hypothesis (strong hypothesis):
increases in household income will be negatively correlated with land clearing
and will be positively correlated with the use of inputs that increase or
maintain yields. Investigating the relationship between poverty and the
land-clearing decision requires taking the household as the unit of analysis.
1.5. LIMITATION OF DATA AND INFORMATION
The limitation of the data and information may prevent the study from better
results. Firstly, household
income calculated from VLSS 1992-93 reveals inaccuracy. Therefore, the missing
or inaccurate data will be corrected from VLSS 1997-98. However, the
inconsistent information of income in VLSS 1992-93 compared with VLSS 1997-98
may face some problems and this may affect the results of the study.
Secondly, the information for
shifting cultivation in VLSS does not exist. Using change in cleared land
(including all types of land without forest) representing deforestation will
partly limit the estimated results. Moreover, the information for types of land
in both VLSS is not completely incompatible, as land could be sold or bought in
the period 1993-1998.
Therefore, this data is just convenient for the purpose of identifying the sign
between variables. In the future, the author would like to discuss this problem
again when there are better data sets for analyzing.
1.6. STRUCTURE OF THE THESIS
The thesis includes 5 chapters: chapter I explains the reasons, objectives,
methods and data of the thesis; chapter II goes into analyzing problems related
to sustainable development, forest and deforestation, poverty and the link
between poverty and deforestation; chapter III presents common deforestation and
poverty situations in Vietnam; chapter IV describes data and illustrates the
regression results in order to define the relationship between deforestation and
income, household size or borrowing constraints, and income-agricultural input
connections; and finally, in chapter V, conclusions and suggestions are
mentioned.
Chapter II
ANALYTICAL
FRAMEWORK
2.1 SUSTAINABLE DEVELOPMENT
2.1.1 Concept
According to the definition of World Commission on Environment and Development
(WCED, 1987), 'sustainable development is
the development that meets the needs of the present without compromising the
ability of future generations to meet their own needs'.
2.1.2 Dimensions of sustainable development
The economic view of sustainable development
The ecological view of sustainable development
The socio-cultural view of sustainable development
2.1.3 Challenges to sustainable development in developing countries
Most developing countries are characterized by low per-capita income, high
population growth rate and a dependence upon agricultural production. Therefore,
their foremost challenge to sustainable development is rural poverty because the
poor will continue to destroy their immediate environment to survive.
2.2 FORESTS AND DEFORESTATION
2.2.1 Role of forests
For ecological sustainability
For economic and social development
2.2.2. Causes of deforestation
Property rights
Population
Income
Environmental Policies
2.2.3. Effects of
deforestation on sustainable development
a) Environmental impacts
b) Social impacts
c) Economic impacts
2.3 POVERTY
2.3.1. Measuring the
poverty indicator
The World Bank's poverty lines
The World Bank (1995) establishes the international standard poverty line based
on a minimum requirement of 2,100 calories per day per capita with the
assumption that a household devotes 70% its total expenditure on food. The
remaining 30% expenditure is assumed to buy other necessary items such as
clothes, health, education and transportation.
GSO's poverty line
The GSO (1992) also relied on the method using food expenditure to compute
poverty lines. According to GSO, a household is in poverty if its income is
insufficient to buy rice for providing 2,100 calories per person per day. This
measure makes no allowance for non-food expenses. So it creates a lower
threshold than the one used by the World Bank.
MOLISA's poverty line
MOLISA established the rice equivalent poverty line by classifying a household
as a hungry one if its monthly per capita rice equivalent income is less than 13
kg of rice. Those with a monthly per capita income that is less than 15 kg, 20
kg, and 25 kg of rice equivalent in mountainous areas, islands, plain, midland
rural areas, and urban areas respectively are considered to be poor.
2.3.2 Causes of poverty
Household size and dependants
Gender disadvantage
Education
Isolation disadvantage
Lack of access to productive resources
Employment
Unforeseen shocks
2.3.3 Effects of poverty on sustainable development
Researches and policies have tended to focus on the relationship between poverty
and sustainable development, represented by environment factor, in terms of
pointing out that the poor are both victims and agents of environmental
degradation: victims in that they are more likely to live in ecologically
vulnerable areas, agents in that they may have no option but to deplete
environmental resources, thus contributing to environmental degradation.
However, it is also acknowledged that the poor often have actions that conserve
the environment. Great physical and spatial variability in natural resource
endowments also seem to complicate the picture (Rachel et la. 1997).
2.4. POVERTY AND DEFORESTATION - WHAT IS THE LINK?
2.4.1 The forest-dependent poor
2.4.2 Poverty - ambiguous impacts on forests
At the macroeconomic level,
forest loss is positively related with both economic growth and poverty
reduction.
At the microeconomic level,
poverty tends to make cheap labor available, which makes it attractive both to
cash in low-return forest rents (degradation) and to undertake labor-intensive
investment in forest clearing (deforestation).
2.4.3. The poverty-deforestation hypothesis
Simple model
According to Alix Peterson Zwane (2002), the effect of poverty on deforestation
is theoretically ambiguous and depends on the relative profitability of
intensification (or sustainable agriculture) and clearing. Therefore, in the
case of deforestation, environment and development policies must be implemented
on the basis of empirical evidence rather than theory.
To
find out how poverty may interact with deforestation, we consider the following
scenario: Household A lives for 2 periods, P1
and P2,
and begins with wealth W. The household cannot borrow, but can save at a certain
rate of interest. All wealth is consumed at the end of P2.
The household has two equal-sized plots of forested land (j and k). The
household can cultivate on these plots using one of two techniques, A and B. The
respective production cost and yield are CA
and CB,
YA
and YB.
The cost of clearing land is C and is independent of the production technique
used. Assume that YA
> YB, and CA
< CB,
but using technique B allows a plot to be farmed more than one time. If
technique A is used, the plot is degraded and must be abandoned.
Figure 2.1 - Household's land-use options
|
Opt 1 |
P1 |
P2 |
|
Opt 2 |
P1 |
P2 |
|
Opt 3 |
P1 |
P2 |
|
Opt 4 |
P1 |
P2 |
|
Plot j |
A |
|
|
Plot j |
A |
|
|
Plot j |
B |
A |
|
Plot j |
B |
A |
|
Plot k |
F |
A |
|
Plot k |
A |
|
|
Plot k |
F |
A |
|
Plot k |
B |
A |
Source: Alix Peterson Zwane (2002)
Figure 2.1 shows the household’s options as well as the ambiguous relationship
between land use and poverty. Forest land is denoted by the letter F and
abandoned land is imagined by a blank cell. The letters A and B denote
cultivated land using one of the possible techniques.
Among options, option 1 is clearly the least costly strategy in period 1. Lack
of the ability to borrow, households with the lowest wealth can only pursue this
strategy. As wealth increases, whether option 2 or option 3 is preferable
depends on each household’s decision; option 4 is the choice that requires the
largest investment. When option 4 is chosen, the most output is generated, but
if environmental externalities were considered, this might not be the socially
preferred outcome.
In
this study, the so-called conventional wisdom on the relationship between
poverty and deforestation will be used as a
strong version of “poverty-deforestation hypothesis” (or written
succinctly as “poverty-deforestation
hypothesis”). That is: increase
in household income will be negatively related with land clearing and will be
positively related with the use of input that increase or maintain yields.
The weak version of the
poverty-deforestation hypothesis might predict that
the link between income with both land clearing
and input use will be positive, but income elasticity of land clearing will be
smaller than the income elasticity of input use.
Now consider a policy that increases initial effective wealth for the poorest
households, such as a micro-credit program, but not so much that option 4
becomes feasible. If the poverty- deforestation hypothesis holds, then as W
increases, households selecting option 1 will switch to selecting option 3. This
means that increasing wealth does not increase environmental degradation in
period 1. If households selecting option 1 prefer to select option 2 as wealth
increases, there is a short-run trade-off between deforestation and increase in
income. Theoretically, there is no way of determining which outcome is most
likely. The decision will depend on the relative yields of YA and YB,
the relative production costs CA
and CB,
the cost of clearing land, and the interest rate. Household size and labor
availability would also affect this decision if the possibility of an imperfect
labor market were introduced.
Extended model
In
this part, a more complete model of the household at the forest margin is
investigated (Appendix A). The model's results show that the relationship
between wealth and land use remains ambiguous. This model provides testable
propositions as follows:
Proposition 1:
The predicted relationship between income and the land-clearing decision is
theoretically ambiguous and must be determined empirically.
Proposition 2:
If imperfect labor markets exist, households with more labor per unit of land
will be more likely to respond to increases in income by clearing land.
Chapter III
DEFORESTATION AND POVERTY SITUATION
IN VIETNAM
3.1. FORESTS AND DEFORESTATION IN VIETNAM
3.1.1. Forests in Vietnam
3.1.2 Ownership of Forest Land
3.1.3. Deforestation in Vietnam
Deforestation has been widespread for several decades, and remains a serious
problem. As indicated by the table 3.1, there was a steady and rather rapid
decline in natural forest cover between 1943 and 1990, especially during the war
years of 1960-1971. Since 1990, the loss of natural forest has proceeded at a
much slower pace - at an annual average of 36,000 hectares per year during
1990-1995. At the same time, the area of planted forest increased at an average
annual rate of 61,000 hectares per year. In 1995-1999, areas of both natural and
planted forest increased rapidly. However, the increase rate of forests in
recent years partly is due to using different definition of forests. Forest
quality continues to decline as a result of forest degradation, further
impacting water discharge patterns and biological diversity.
Table 3.1 - Changes in the forest cover of Vietnam (1943-1999)
Unit: 1000 hectares
|
|
1943 |
1976 |
1980 |
1985 |
1990 |
1995 |
1999 |
|
Natural forest |
14,000 |
11,077 |
10,486 |
9,308 |
8,430 |
8,252 |
9,444 |
|
Plantation |
0 |
92 |
422 |
584 |
745 |
1,050 |
1,471 |
|
Total hectares |
14,000 |
11,169 |
10,608 |
9,892 |
9,175 |
9,302 |
10,915 |
|
% of total area |
43.0 |
33.8 |
32.1 |
30.0 |
27.2 |
28.1 |
33.2 |
Source: MARD (2000)
3.1.4. Shifting cultivation - a main cause of deforestation in Vietnam
Shifting cultivators in Vietnam
Ethnic minority - shifting cultivation link in Vietnam
3.2. POVERTY SITUATION IN VIETNAM
Firstly, Vietnam is still one of the poorest
countries in the world. In 1999, Vietnam’s gross national product per
capita was US$370 compared with US$1020 for the Philippines, US$580 for
Indonesia, US$780 for China and US$410 for low income countries (figure 3.3)
Secondly,
a majority of the poor is concentrated in remote, isolated, and mountainous
areas.
As many as 64% of the poor live in the Northern mountainous region (Northwest
and Northeast), North Central region, Central Highlands, and Central coastal
region (figure 3.4). These areas are characterized by difficult living
conditions, geographically isolated, very limited access to productive resources
and services, underdeveloped infrastructure, harsh natural conditions, and high
frequency of natural disasters.
Thirdly,
poverty is a widespread phenomenon in rural
areas - Rural per capita incomes in some parts of Vietnam are below
US$ 100/year. Over 90% of the poor live in rural areas. There is also wide
variation across rural regions. The headcount index ranges from 45% in the South
East to 79% in the North Central region.
Therefore a higher proportion of the population lives below the
poverty line in rural areas than in urban areas - 45% compared with 9% (figure
3.5).
Fourthly, the poverty rate is extremely high
among ethnic minority groups. While accounting for roughly 14% of the
total national population, the representation of ethnic minority groups among
the poor is disproportionately high at roughly 29%. The majority of ethnic
minority people live in remote and isolated areas. They are
geographically and culturally isolated, and lack favorable conditions for
developing infrastructure and basic social services. Ethnic minority people are
amongst the poorest in Vietnam. Ethnic minorities make up 14% of the population
but account for 29% of poor people in Vietnam. The incidence of poverty among
ethnic minorities has come down from 86% in 1993 to 75% in 1998. This compares
to the poverty rate for the Kinh majority of 31% down from 54%. Therefore,
although ethnic minority poverty is declining, it is falling at a slower rate
than for the Kinh population and remains very high (Figure 3.7).
3.3. RELATED POLICIES
3.3.1 Forest land allocation
3.3.2 Programme 327
3.3.3 The campaign for fixed cultivation and sedentarisation
3.3.4 Credit policy for the poor
Chapter IV
does poverty exacerbate deforestation?
empirical evidence from vietnam
4.1. data
This thesis uses two data sets derived from VLSS 1 and VLSS 2 (conducted in two
periods of 1992-93 and 1997-98). These data sets are undertaken by General
Statistical Office (GSO) of the Government of Vietnam under the LSMS form. They
include socio-economic aspects of a large number of households that are highly
representative of Vietnamese households. Notably, only 4186 households
interviewed in 1993 had been selected in 1997 because some households were
sampled again and the other had moved elsewhere.
This figure implies that the study on migration
might be ignored.
While these surveys contain national data, only 400 households using or
controlling forest land in VLSS1 will be considered here. It should be noted
that selling or buying land between two
period might affect the analysis results and therefore, only 229
households are used in this sample.
4.2 MODEL AND DATA SPECIFICATION
4.3. GENERAL DESCRIPTION
Table 4.1 shows that the average income of households increased in the period
1993-1998 (from 8,326,600 VND to 10,020,600 VND for a year). However, the figure
is low compared to the national average income of households (14,010,740 VND for
a year). As calculated in Table 4.2, two poorest quintiles in this sample
account for 51.96%. Meanwhile, the percentage rate of these quintiles for the
whole country is only 37.38%. Thus, the number of poor is concentrated largely
in selected regions.
Table 4.1 - Summary statistics of variables, 1993 and 1998
|
Variable |
Unit |
Mean |
Std. Dev |
|
LAND93 |
m2 |
10338 |
8640.1 |
|
LAND98 |
m2 |
9212.8 |
8623.8 |
|
DEFOR |
m2 |
380.9 |
5456.5 |
|
INCOME93 |
000 dong |
8326.6 |
10838.9 |
|
INCOME98 |
000 dong |
10020.6 |
8314.9 |
|
DURABLE93 |
000 dong |
269.7 |
526.5 |
|
DURABLE98 |
000 dong |
526.8 |
797.8 |
|
AGE93 |
age |
4.16 |
1.49 |
|
AGE98 |
age |
4.33 |
1.34 |
|
ADULT93 |
persons |
5.11 |
1.74 |
|
ADULT98 |
persons |
4.90 |
1.69 |
|
PESEXP93 |
000 dong |
34.93 |
64.3 |
|
PESEXP98 |
000 dong |
139.9 |
321.8 |
|
FEREXP93 |
000 dong |
386.1 |
383.7 |
|
FEREXP98 |
000 dong |
935.5 |
995.5 |
|
LABEXP93 |
000 dong |
78.3 |
226.8 |
|
LABEXP98 |
000 dong |
33.1 |
227.7 |
|
PESUSE93 |
- |
1.28 |
.449 |
|
PESUSE98 |
- |
1.12 |
.333 |
|
FERUSE93 |
- |
1.02 |
.160 |
|
FERUSE98 |
- |
1.00 |
.093 |
|
LABUSE93 |
- |
1.77 |
.422 |
|
LABUSE98 |
- |
1.72 |
.447 |
|
EDU93 |
- |
1.40 |
.850 |
|