Policy implications of managing reservoir water for multiple uses of irrigation and fisheries in southeast Vietnam

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1 Wate Utility Jounal 13: 69-81, E.W. Publications Policy implications of managing esevoi wate fo multiple uses of iigation and fisheies in southeast Vietnam L.D. Tan 1,2, D. Zilbeman 2*, S. Schilizzi 3, M. Chalak 3,4 and R. Kingwell 3,5 1 Depatment of Agicultual Economics, Faculty of Economics, Nong Lam Univesity, Thu Duc Distict, Ho Chi Minh City, Vietnam 2 Depatment of Agicultual and Resouce Economics, Univesity of Califonia, Bekeley, Califonia, 94720, USA 3 School of Agicultual and Resouce Economics, The Univesity of Westen Austalia, 35 Stiling Highway, Cawley, Westen Austalia, 6009, Austalia 4 Cente fo Envionmental Economics and Policy, School of Agicultual and Resouce Economics, The Univesity of Westen Austalia, 35 Stiling Highway, Cawley, Westen Austalia, 6009, Austalia 5 Depatment of Agicultue and Food, Westen Austalia, 3 Baon-Hay Cout, South Peth, Westen Austalia, 6151, Austalia * zilbe11@bekeley.edu Abstact: Key wods: We intoduce a dynamic-optimization model developed to detemine the tade-offs in the economic value between managing esevoi wate fo iigation and fo fisheies. The policy implications of managing esevoi wate fo multiple uses of iigation and fisheies in Vietnam ae investigated. Results indicate that dominantly managing esevoi wate fo iigation is moe lucative than fo fisheies. To impove the economic pefomance of managing esevoi wate fo multiple uses, thee policies ae intoduced: (1) switching cops, (2) extending iigation aea, and (3) edistibuting income. The esults also indicate that, given the dominant use of wate fo iigation, income can be diveted fom ice poduction to fisheies without much eduction in ice-poduction income. The method used in this study could be applied to manage othe esevois in Asian counties fo multiple uses whee esevoi wate is often used fo fisheies as a seconday pupose. wate management, multiple uses, esevoi wate, iigation, fisheies, optimization, Vietnam. 1. INTRODUCTION Feshwate esevois can have many uses, including iigation, fisheies, eceation, hydoelecticity, and flood contol. Many scientists have studied the management of esevoi wate to maximize its benefits (Connelly et al., 2007; Hanson et al., 2002; Roges et al., 2014; Chattejee et al., 1998). As commonly obseved in othe cases of multiple-use esouces, managing wate fom a esevoi fo a pimay use often geneates negative impacts on the seconday use (Loenzen et al., 2000; Renwick, 2001; Wad et al., 1996; Tan et al., 2011) as well as ceates conflicts of inteest (Loenzen et al., 2003; Nandalal and Simonovic, 2003). These conflicts often cente on the quantity and timing of wate distibution fo the diffeent uses (Nguyen-Khoa and Smith, 2004; Yoffe and Wad, 1999). The ecent incease in the numbe of esevois in Vietnam has caused conflicts of inteest in esevoi wate use to become moe widespead and pominent. This highlights a key need to establish management policies to lessen o facilitate conflicts within an existing agicultual poduction system that uses wate fom a esevoi fo multiple uses. In southeast Vietnam, the main pupose of esevois is to povide wate fo iigation in the dy seasons. Managing esevois fo the dominant use of iigation often ceates negative effects on fisheies. In paticula, to avoid eduction in cop yields in cases of dought, wate is maintained at high levels in esevois to act as a buffe. This esults in low fish yields because fish ae not easily havested when the esevoi wate levels ae high (Schilizzi, 2003; Tan et al., 2010). Howeve, a lage segment of the population engaged in esevoi fisheies is the poo whose livelihoods depend on them. Dominantly managing esevois fo iigation may be detimental to the poo fishes. A numbe of pevious studies have examined the economics of developing esevoi fisheies to impove livelihoods of poo fishes in Vietnam (Tuong, 2007; Nguyen et al., 2001; Loenzen et al., 2003; De Silva, 2003; Ngo and Le, 2001; Petesen et al., 2005). Howeve, these studies mainly

2 70 L.D. Tan et al. focused on the technological pespectives of esevoi fisheies and assumed that esevoi wate was pedominantly used fo fisheies. This assumption was not easonable as most esevois wee managed fo iigation. In eality, policy makes ae concened with the poblem of managing esevoi wate fo both iigation and fisheies. This study investigates the policy implications in ode to impove the economic pefomance of managing esevois fo multiple uses. The optimization model has been used to investigate the poblem of managing esevoi wate fo iigation (Rani and Moeia, 2010; Geogiou and Papamichail, 2008; Senzanje et al., 2008; Geogiou et al., 2006; Reca et al., 2001). Howeve, the application of the optimization model to manage esevoi wate fo conflicting uses is ae (Ghahaman and Sepaskhah, 2002; Tilmant et al., 2002; Wolf, 2002; Li et al., 2005; Tan et al., 2011). In this study, a dynamic-optimization model fo esevoi wate management fo iigation and fisheies in southeast Vietnam (Tan et al., 2012) was used to evaluate the tade-offs in the economic value of a unit of wate used fo iigation and fisheies. These values wee then used as a benchmak fo policy makes to specify policies to impove the economic pefomance of managing esevoi wate fo multiple uses. A modeling appoach is appopiate, such as incopoating the complexity of the biological chaacteistics of ice and fish poduction as well as an intetempoal poblem of wate esouce management. A featue of this study is to specify policies fo diffeent classes of esevois in southeast Vietnam whee managing esevoi wate fo multiple uses has challenged policy makes. This study aims to quantify (1) tade-offs in the economic value of a unit of wate used fo iigation and fisheies and (2) amount of income that can be diveted fom fames to fishes as esevoi wate is dominantly managed fo iigation. The emaining sections of the pape ae oganized as follows: Section 2 descibes the study aea, section 3 descibes the eseach methodology and tools, section 4 pesents data and paametes used in the model, section 5 pesents findings and discussions, and section 6 povides conclusions. 2. THE STUDY AREA The stuctue of an agicultual poduction system that uses wate fom a esevoi in southeast Vietnam is pesented in Figue 1. It includes the esevoi, iigated ice poduction in the suounding aeas, and fish poduction within the esevoi. Inflows fom catchment aea catchm Rainfall Resevoi Fish poduction Stocking: June Havesting: Febuay-June Wate elease Rice poduction 1 st cop: Decembe-Mach 2 nd cop: Apil - July Monsoon cop: July-Novembe Figue 1. The stuctue of an agicultual poduction system using wate fom a esevoi fo both iigation and fisheies in southeast Vietnam.

3 Wate Utility Jounal 13 (2016) 71 Wate availability in the esevoi vaies thoughout the yea depending on the ainfall and inflows fom catchment aeas. Wate is egulaly eleased fom the esevoi fo ice poduction duing the dy season fom Decembe to June (o July), and it is eplenished by ainfall and inflows duing the wet season fom June to Novembe (Table 1). Wate availability in the esevoi at the end of the wet season depends on esevoi size, stoed wate fom the pevious yea, and ainfall. The esevoi usually holds its highest wate level at the end of the wet season (Novembe), which is the stat of the iigation season. As wate is eleased fo iigation in the fist ice season (Decembe to Mach), the wate level declines. At the beginning of the second ice cop season (Apil), wate usually emains at intemediate levels. Wate may be eleased continuously until the end of the iigation season (June o July). Table 1. Climatic season, esevoi opeations, and seasonal calenda fo ice and fish poduction Months Dec Jan Feb Ma Ap May Jun Jul Aug Sep Oct Nov Climatic season Dy season Wet season Resevoi opeations Release Stoage Rice poduction Fist ice cop Second ice cop Monsoon cop Fish poduction Fish-havest season Stocking Receation Receational fishing sevice Ove a one-yea peiod, thee ice cops ae consecutively cultivated aound the esevois (Table 1). The fist cop is gown fom Decembe to Mach. The second cop is gown fom Apil to July. These two cops must be iigated fom Decembe to June because of low ainfall levels duing this peiod. The thid cop (monsoon cop) is gown fom July to Novembe. This cop does not equie iigation due to the high fequency of ainfall duing this peiod. In ecent yeas, most iigation esevois in southeast Vietnam have also been used fo fisheies opeated by aquacultual coopeatives (Ngo and Le, 2001; Schilizzi, 2003). Fishey income comes fom two main souces: (1) fish poduction and (2) eceational fishing sevice. Fist, fishpoduction activities opeate on an annual cycle. The stocking of fingelings into the esevois often stats in June when the wet season commences. Five main species ae stocked: common cap (Cypinus capio), silve cap (Hypophthalmichthys molitix), gass cap (Ctenophayngodon idella), bighead cap (Aistichthys nobilis), and migal (Ciihinus migal) of which 40% to 50% ae silve cap and migal (Nguyen et al., 2001). Havesting fish occus fom Febuay to June when the esevoi wate is at its lowest levels (Nguyen, 2008) using simple technologies, such as small boats and lage dag nets (Table 1). Second, the eceational fishing sevice occus fom Decembe to July. 3. RESEARCH METHODOLOGY AND TOOLS This study was fist used as a case study of the Daton Resevoi (see Tan et al., 2011, fo moe infomation), which was a epesentative agicultual poduction system using wate fom a esevoi fo both iigation and fisheies in southeast Vietnam. The esults obtained fom this esevoi wee then extapolated to specify management policies fo diffeent classes of esevois. Fist, this study employed the dynamic-optimization model (Tan et al., 2012) to calculate incomes of ice and fish poduction. Second, these incomes wee used to quantify how much income could be diveted fom fames to fishes without causing a negative impact on fames. Thid, the net income eceived by each entepise, afte edistibuting income fom fames to fishes, was compaed to evaluate how much fishes incomes had impoved and how much fames incomes had declined.

4 72 L.D. Tan et al. 3.1 Model outline The desciption of the complex dynamic-optimization model fo esevoi wate management in southwest Vietnam (Tan et al., 2011) was evised by Tan et al. (2012). The model depicts the optimal stategy to manage esevois in Vietnam whee wate is used fo two competing poduction systems (iigation and fisheies), which diffe with espect to thei needs fo quantity and timing of wate elease. The model compises two dynamic-simulation components, one based on dated wate poduction functions fo ice poduction and anothe that epesents the bioeconomics of a esevoi fishey. The intetempoal poblem of wate management is also consideed in the model by incopoating stochastic ainfall, iigation equiements (IR), and the demand fo low wate levels fo fish havesting. An eight-stage stochastic dynamic-pogamming model was coded in Matlab to find the maximum value of the expected net pesent value (ENPV) of income steams obtained by managing the esevoi wate. Detailed infomation egading the optimization pocedue (climatic and hydological data employed to estimate ENPV of the income) is pesented in Tan et al. (2011). 3.2 Objective of the model To define the tade-offs in the economic value of a unit of wate used between two conflicting and competing uses (iigation and fisheies), this study employed the dominant-use management appoach fo multiple uses (Klempee, 1996; Bowes and Kutilla, 1989). Accoding to this appoach, wate is optimally managed fo a dominant use to obtain a maximum value geneated by that use. The values geneated by the othe uses ae assigned to that maximum value to fom the maximum total value geneated by the system. This appoach is well suited fo dominantly managing esevoi wate fo iigation (Scenaio 1) and dominantly managing esevoi wate fo fisheies (Scenaio 2). Fo Scenaio 1, whee wate is dominantly managed fo iigation, fish ae still havested to a limited degee and eceational fishing sevice still occus. As a esult, the fishes still expect to achieve positive income fom fish poduction and eceational fishing sevice. Theefoe, the maximum total income fo the management of esevoi wate fo multiple uses must be the sum of the maximum income obtained fom optimized ice poduction and the additional sum of income obtained fom nonoptimized fish poduction and eceational fishing sevice. Fo Scenaio 2, whee wate is dominantly managed fo fisheies, eceational fishing sevice also occus and ice is still cultivated. Theefoe, fames still expect to achieve positive income. The maximum total income fo the management of esevoi wate fo multiple uses must be the sum of the maximum income obtained fom optimized fish poduction and the sum of the additional income obtained fom nonoptimized ice poduction and eceational fishing sevice. The objective function of the model is as follows: If the esevoi is dominantly managed fo iigation, I = I * + I f + I t. If the esevoi is dominantly managed fisheies, I = I + I + I * f ' t * whee I I ae the maximum income obtained fom the optimal wate management fo iigation *, f and fisheies, espectively; stategy fo fisheies; ' I is ice income detemined accoding to the optimal management I is fish income detemined accoding to the optimal management stategy ' f fo iigation; and t I is income obtained fom eceational fishing sevice, which is an additional income egadless of esevoi being dominantly managed fo eithe iigation o fisheies. (1) (2)

5 Wate Utility Jounal 13 (2016) Rice-poduction income In the model, ice-poduction income was calculated as follows: I = A q p c (3) whee c was total ice-poduction cost measued in million Vietnam Dong (10 6 VND; 1 US$ ~ 21,500 VND pice in Febuay, 2015); A was iigated aeas (ha); p was the pice of ice (10 6 VND); and q was ice yields (tonnes/ha) estimated using a wate poduction function, which was adapted by Tan et al. (2011) fom its oiginal fom developed by Rao et al. (1988). 8 q = Y p 1 k yn 1 W n=1 W 0 n (4) whee Y p was the potential yield of ice (tonnes/ha), k y n was the yield esponse facto at stage n, W 0 was the ice wate equiements [% esevoi capacity (RC)], and W n was total wate supply at stage n (%RC). 3.4 Fish-poduction income In the model, fish-poduction income was calculated as follows: I f = TR f ( 1 PCE) c f (5) whee c f was total fish-poduction cost (10 6 VND) and TR f was total fish evenue (10 6 VND) estimated using a bioeconomic model fo esevoi aquacultue in Vietnam (BRAVO), which was adapted by Tuong and Schilizzi (2010) fom the oiginal model developed by Petesen et al. (2007). whee α β TR f = W Hij P Hi (6) i=1 j=1 WH ij was the weight of each species i (tonnes) at havest j, PH i was the pice of each species i (10 6 VND/tonne), α was the numbe of species, and β was the numbe of havesting peiods. To account fo fish evenue in esponse to fluctuations in esevoi wate levels, these evenues wee then multiplied by the physical concentation effect (PCE) coefficient developed by Tan et al. (2011). ( ) PCE n = θγωa 0 (θ+1) s t (γθ 1) s t Y f %Δs ( ) (7) θ whee θ was the paamete obtained fom the esevoi hypsogaphic equation, A = A0 s, which indicated the elationship between esevoi suface aea A (ha) and RC, s (%RC); A 0 was the esevoi suface aea at full level of wate (ha); and γ and ω wee paametes obtained fom Nguyen et al. (2001), who indicated the elationship between fish yields and esevoi suface aea ϖ as Y = γa.

6 74 L.D. Tan et al. 4. DATA AND PARAMETERS USED FOR THE MODEL Data and paametes fo this study can be found in moe detail in Tan et al. (2011). Hee, we povide key infomation, which is useful fo the appaisal of the model outcomes. 4.1 Rice-poduction data Rice-poduction data wee collected fom both pimay and seconday souces. Fist, 60 fames wee inteviewed to gathe infomation elated to cultivated aeas; copping pattens; aveage, minimum, and maximum cop yields; pices of inputs (seeds, fetilizes, chemicals and labo); ice pice; and pices of capital. The infomation was then used to calculate ice-poduction costs. The aveage poduction cost pe ha was (10 6 VND) and 8.6 (10 6 VND) fo the fist and second ice cops, espectively. The aveage ice pice in 2014 was 5.0 (10 6 VND) pe tonne. Second, the ice wate equiement was simulated using the CROPWAT model (Swennenhuis, 2006) (Table 2). Then, they wee fed into the wate poduction function (Equation 4) to estimate ice yield in esponse to diffeent levels of applied iigation. Total evenue and total costs of the ice cultivated aeas wee estimated by multiplying these aveage values by the actual cultivated aeas. Total ice income was estimated by subtacting the total cost fom the total evenue. Table 2. Potential yield of ice (Y p ), yield esponse facto (k y ), and ice wate equiements (W 0 ) Paamete Units Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 Stage 6 Stage 7 Stage 8 Y p tonnes/ha k y no W 0 Mm Fish-poduction data Fish-poduction data wee collected at the Daton Aquacultue Coopeatives, including the weight of each species at havest time, maket pices of each species at havest time, yealy inteest ate, stocking and estocking ates, stocking and estocking costs fo each species, size of fingelings, pices of fingelings, costs of capital eplacements (boats, nets, machines, etc.), costs of labo, and miscellaneous costs. These data wee fed into the BRAVO model (Tuong and Schilizzi, 2010) to calculate total fish yield fo fou havest peiods (Table 3). Technical paametes used fo the biological model in the BRAVO model, such as the fish length and the gowth coefficient of each species, wee employed fom data deived by Petesen et al. (2007). As mentioned peviously, the othe income souce of fisheies was the income that the Daton Aquacultue Coopeatives obtained fom the eceational fishing sevice. The infomation of the eceational fishing sevice was collected fom the annual epot of the coopeatives. The epot indicated that the income of this sevice has fluctuated fom appoximately 0.5% to 2% of total annual fish-poduction income. In this study, the income fom the eceational fishing sevice was chosen at 1% of the total annual income of fish poduction. Table 3. Fish pices and fish yields obtained fom BRAVO model Fish Pices (10 6 VND Fish yields (tonnes) Species pe tonne) Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 Stage 6 Stage 7 Stage 8 Common Cap Silve Cap Gass Cap Bighead Cap Migal Note: In the optimization model (Tan et al., 2011), fish havesting happens only in peiods 4-7.

7 Wate Utility Jounal 13 (2016) Resevoi configuations To extapolate the esults obtained fom the Daton Resevoi to othe diffeent classes of esevoi configuations in southeast Vietnam, two citeia wee used: the IR of ice poduction seved by esevoi and the RC. Fist, an incease in iigation aea (IA) equies a highe IR and vice vesa. Theefoe, IA can be used to epesent IR. Second, each initial wate level of the Daton Resevoi is used to epesent a full esevoi fo esevois of diffeent sizes. That is, when the Daton Resevoi at the beginning of the iigation season is full, the initial wate level of the esevoi can be used to epesent anothe equivalently full esevoi at the beginning of the iigation season. When the initial wate level is lowe, at 70% of the Daton Resevoi capacity (DRC), it can be used to epesent a full esevoi with a lowe maximum capacity than the Daton Resevoi, RC = 70% DRC. The model esults obtained as dominantly managing the Daton Resevoi fo iigation indicated that, when the initial wate level of the esevoi was at 70% RC, the amount of esevoi wate available fo iigation was sufficient to fully satisfy the wate demand fo 1,000 ha of ice poduction. Given this fixed iigated aea, as the initial wate level in the esevoi at the beginning RC of the iigation season deceased, the atio R = deceased. In paticula, when the initial wate IR level was at 30% DRC o lowe, the insufficient wate supply fo iigation could cause wate deficits fo ice, leading to a significant eduction in ice income. Theefoe, 30% DRC was chosen as a beak-even point. When the initial wate level was between 40%-60% DRC, wate supply was sufficient fo iigation, esulting in significant inceases in ice income. In this study, the midpoint of this ange (50% DRC) epesented anothe beak-even point. In addition, when the initial wate level was 70% DRC (o fluctuated aound this level), the atio, R, appoached 1. Theefoe, 70% DRC was also chosen as a beak-even point. Fo this eason, the following sections used 30% DRC, 50% DRC, 70% DRC, and 100% DRC as the beak-even wate levels to classify fou classes of esevoi configuations (Table 4). Table 4. Classes of esevoi configuations Initial wate level 30% DRC (R<<1) 50% DRC (R < 1) 70% DRC (R 1) 100% DRC (R>>1) Classes of esevoi configuations R 1 R 2 R 3 R 4 Desciptions Resevois ae full at the beginning of the iigation season and have RC much smalle than total IR Resevois ae full at the beginning of the iigation season and have RC smalle than total IR Resevois ae full at the beginning of the iigation season and have RC geate than o equal to total IR Resevois ae full at the beginning of the iigation season and have RC much geate than total IR 5. RESULTS AND DISCUSSION This section epots and discusses the model esults, focusing on (1) optimal wate elease and stoage stategy, (2) tade-offs in the economic value of a unit of wate between dominantly managing esevois fo iigation and fo fisheies, and (3) policy implications fo managing diffeent classes of esevois fo multiple uses. 5.1 Model esults Optimal wate elease and stoage stategy The optimal wate elease and stoage stategy fo the dominant use of iigation ae pesented in

8 76 L.D. Tan et al. Table 5. Fo the R1 and R2 esevois, because of thei limited capacity, wate is eseved fo the last thee stages when dy weathe may cause a significant eduction in ice yields. Less wate stoed in the esevois enhances the concentation of fish, esulting in high fish yields. Convesely, fo the R3 and R4 esevois, adequate wate is always supplied to satisfy the wate equiement fo ice poduction to achieve maximum yields. The emaining wate is always stoed, in case of dought, to ensue a wate supply fo subsequent ice cops. With stoage, esevoi wate levels emain high (22.7% RC and 52.7% RC), which educes the concentation of fish and negatively affects fish yields. Table 5. Optimal wate elease and stoage stategy fo the dominant use of iigation Optimal elease (% RC) Optimal Classes of stoage Resevoi Stage Stage Stage Stage Stage Stage Stage Stage (% RC) R R R R Optimal wate elease and stoage fo the dominant use of fisheies ae shown in Table 6. The esults illustate that, fo all classes of esevois, the maximum amounts of wate ae eleased in the fist fou stages in ode to leave esevoi wate at the lowest levels pio to fish-havest season (Stage 4 to Stage 7). Howeve, these eleases cause a lack of wate fo iigation duing latte stages, esulting in significant eductions in ice yields. Rice is highly sensitive to wate deficit at these stages. In cases of dought in subsequent yeas, less wate stoed in the esevois at the end of iigation season (9.5% RC) may also negatively affect ice poduction. Classes of Resevoi Table 6. Optimal wate elease and stoage stategy fo the dominant use of fisheies Optimal elease (% RC) Stage Stage Stage Stage Stage Stage Stage Stage R R R R Optimal stoage (% RC) Tade-offs in the economic value of a unit of wate between managing esevoi fo iigation and fisheies Table 7 illustates that dominantly managing esevois fo iigation is much moe lucative than fo fisheies (compaing esults acoss columns 4 and 7). The highe the RC, the lage the economic value geneated. Howeve, tade-offs in the economic value of a unit of wate used between dominantly managing a esevoi fo iigation and fisheies is lowe since those esevois hold a capacity geate than thei IA. Fo example, if managing the R4 esevoi fo fisheies, in ode to gain 1.0 (10 6 VND) income fom fisheies, the sacifice of ice income would be 2.2 (10 6 VND). The tade-off is 2.9 (10 6 VND), counting the R3 esevoi. Fo these esevois, wate is sufficient to satisfy ice wate equiements to obtain maximum yield. Stoing wate fo iigation, in this case, does not impove ice yields but educes fish yields. Convesely, the tade-offs ae much geate fo esevois whee capacity is smalle than IA. Fo example, the tade-offs ae 3.5 and 3.4 fo R1 and R2 esevois, espectively (Table 7). Regadless of managing these esevois fo eithe iigation o fisheies, wate level is also at a low level duing the fish-havest season (Table 6), esulting in positive effects on fish yields. In addition, if

9 Wate Utility Jounal 13 (2016) 77 managing these esevois fo iigation, losses in ice yields may be minimized because moe wate would be used fo ice poduction. Table 7. Compaing the income of the two scenaios (10 6 VND) Classes of Scenaio 1 (S1) Scenaio 2 (S2) Compaison (S2-S1) Tade 1 1 Resevoi Rice ( I ) Fish ( I ) -offs f Total (I 1 2 ) Rice ( I ) Fish ( 2 I ) f Total (I 2 ) Δ I Δ I f (1) (2) (3) (4) (5) (6) (7) (8)=(5)-(2) (9)=(7)-3) (8)/(9) R1 23, , , , , , , , R2 33, , , , , , , , R3 41, , , , , , , , R4 41, , , , , , , , Results pesented in Table 7 also indicate that an incease in RC leads to an incease in total income egadless of managing esevoi wate fo eithe iigation o fisheies, excluding managing the R4 esevoi fo iigation. This is because inceasing RC and stoing wate fo iigation esult in high levels of wate at fish-havest season. This leads to a low concentation of fish and causes significant eductions in fish yields. In paticula, an incease of (10 6 VND) in ice income, fom 41,049.1 (10 6 VND) to 41,346.6 (10 6 VND), is insufficient to offset a eduction of 1,285.9 (10 6 VND) in fish income, fom 3,702.3 (10 6 VND) to 2,416.5 (10 6 VND) columns 2 and Policy implication As discussed above, dominantly managing esevois fo iigation geneates highe benefits than fo fisheies. This section will discuss thee policies that could potentially be applied to impove the economic pefomance of managing esevois fo multiple uses Switching cops Fo R1 and R2 esevois whee RC is smalle than IR, switching a potion of ice cops to highvalue, dy-land cops (e.g., con o soybean) may not only ceate a bette economic outcome fo managing wate fo iigation but also positively affect the local cattle-feed pocessing industy. Fist, switching cops leads to eductions in ice cultivated aeas, esulting in lowe IR. The emaining ice-cultivated aeas may eceive moe iigation, esulting in highe ice yields. In addition, moe wate used fo iigation bings esevoi wate to low levels duing fish-havest season. This inceases fish yields because of the highe concentation of fish. Second, inceasing in cultivated aeas of dy-land cops can supply moe aw mateials, which ae cuently impoted fo the cattle-feed pocessing industy. Howeve, the switching of cops could be subjected to the gowth condition of dy-land cops (e.g., agonomy and climate) Extending iigation aeas To impove the economic pefomance of managing R3 and R4 esevois fo multiple uses, extension of the ice-gowing aeas is an accompanying policy that should be consideed. The extension of IA will ceate two positive effects on total income: (1) an incease in ice income because of inceases in cultivated aeas and (2) an incease in fish income because wate would be eleased fo iigation, which would lead to low wate levels duing fish-havest season and highe fish yields (Table 8). Results obtained fom the Daton Resevoi ae pesented in Table 8. The Daton Resevoi epesents the R4 esevoi, whee the esevoi wate level at the beginning of iigation season is appoximately 95%-100% RC and the esevoi iigates 1,000 ha of ice poduction. Table 8 shows that, as the iigated aea is extended to 1,500 ha (+50%) and 2,000 ha (+100%), managing the

10 78 L.D. Tan et al. esevoi fo iigation geneates a highe total income than fo fisheies, which ae 16,367 (10 6 VND) (+34%) and 19,286.3 (10 6 VND) (+37%), espectively. Table 8. Income of fames and fishes as extending iigated aeas of the Daton Resevoi (10 6 VND) Wate management Iigated aeas IA = 1,000 ha IA = 1,500 ha IA = 2,000 ha Fo iigation (S1) 43, , ,067.6 Rice 41, , ,660.1 Fish 2, , ,407.5 Fo fisheies (S2) 37, , ,781.3 Rice 29, , ,892.2 Fish 7, , ,889.1 Compaison (S1-S2) 6, , ,286.3 Δ I 11, , ,767.8 Δ I f -5, , , Redistibuting income As peviously discussed, the most cost-effective option to manage all classes of multiple-use esevois is fo iigation. Howeve, the dominant management of the esevoi in southeast Vietnam fo iigation has ceated negative effects on fisheies, which ae the main souce of income fo the poo. A possibility is that esevois could be dominantly managed fo iigation to maximize income fo ice fames. Then, a tansfe payment could be taken fom fames to compensate fishes. The amount that fishes eceive would be the diffeence in fishey income that fishes would eceive fom two scenaios. Table 9 illustates an incease in RC that esults in a highe tansfe payments (column 4) but with lowe payment ates (column 8). In paticula, the tansfe payments ae 4,365.5 (10 6 VND), 4,658.8 (10 6 VND), 5,334.1 (10 6 VND), and 5,472.6 (10 6 VND) fo R1, R2, R3, and R4 esevois, espectively. The payment ates ae 18%, 14%, 13%, and 13% fo R1, R2, R3, and R4 esevois, espectively. In addition, the payment ates educe as the extension of iigated aeas ae consideed fo R3 and R4 esevois (Table 10). The extension of IA esults in two benefits: (1) lage total incomes ae geneated fo society and (2) ice fames pay less pe unit of wate fo pio use of esevoi wate. Fo example, the payment ate educes fom 13% to 7% as cultivated aeas of the R4 esevoi ae extended fom 1,000 ha to 2,000 ha (Table 10). When esevois ae managed fo iigation, applying the payment ates calculated in Table 10 fo iigation chages pe ha can be detemined fo diffeent classes of esevois, depending on the numbe of cops cultivated pe yea, IA, and esevoi fishey activities. Fo example, 1,000 ha suounding the Daton Resevoi cultivate thee ice cops a yea. The iigation chage pe ha is 1.6 (10 6 VND) VND/yea. The chage will be 0.75 (10 6 VND)/yea as the Daton Resevoi IA is extended to 2,000 ha. Table 9. Net income eceived by ice fames and fishes befoe and afte edistibuting income (10 6 VND) Classes of Resevoi (1) Rice ( I 1 ) (2) Befoe (S1) Fish ( I 1 ) f (3) Tansfe payment (TP) (4) Rice ( 1* I ) (5)=(1)-(4) Afte (S1*) Fish ( 1* I ) f Total income (7)=(5)+(6) o (2)+(3) Payment ates (8)=(4)/(2) (6)=(3)+(4) R1 23, , , , , , % R2 33, , , , , , % R3 41, , , , , , % R4 41, , , , , , %

11 Wate Utility Jounal 13 (2016) 79 Table 10. Tansfe payment ates fo diffeent iigated aeas of R3 and R4 esevois Wate Fo R3 esevoi Fo R4 esevoi management IA = 1,000 ha IA = 1,500 ha IA = 1,000 ha IA = 1,500 ha IA = 2,000 ha Fo iigation 44, , , , ,067.6 (S1) Rice 41, , , , ,660.1 Fish 3, , , , ,407.5 Fo fisheies 34, , , , ,781.3 (S2) Rice 25, , , , ,892.2 Fish 9, , , , ,889.1 Tansfe 5, , , , ,481.5 payment 13% 11% 13% 8% 7% Classes of esevoi Table 11. Compaing gains and losses in fame income Rice income (10 6 VND) Compaison 1* 1* 1* I + tax ( I ) ( I ) ( I ) ( I )/( I ) ( I ) /( I 1 ) 1 2 R1 19, , , % 82% R2 29, , , % 86% R3 35, , , % 87% R4 35, , , % 87% Afte edistibuting income fom ice poduction to fisheies, the maximum total income geneated by the esevoi emains unchanged (column 7, Table 9). Howeve, ice-poduction income would be educed while fish-poduction income would incease. Although the net income that ice fames eceive is 82% to 87% of what they eceive fom managing esevois fo iigation, these incomes ae significantly high (fom 122% to 231%) compaed to the income that fames eceive fom managing esevoi wate fo fisheies (Table 11). Consequently, ice fames may accept eductions CONCLUSIONS The implications of managing esevois fo multiple uses of iigation and fisheies have been examined in this pape, using a dynamic-optimization model. Results indicate that tade-offs in the economic value of a unit of wate used between iigation and fisheies ae highe as RC is small elative to the IA. This study also intoduces thee policies that could potentially be applied to impove the economic pefomance of dominantly managing esevoi wate fo iigation. Fist, switching cops may be consideed fo esevois that ae full at the beginning of the iigation season with RC smalle o much smalle than total IR. Second, extending IA may be used fo esevois that ae full at the beginning of the iigation season with RC geate o much geate IR. Fo the Daton Resevoi, as IA is extended to 2000 ha, total income geneated by dominantly managing the esevoi fo iigation is 72,067.6 (10 6 VND) (+ 64.7%). Thid, edistibuting income fom ice poduction to fisheies can be applied to all classes of esevois. Results indicate that the income edistibution ates ae 13% to 18% of ice-poduction income, depending on RC and IA. Oveall, this study indicates that dominantly managing esevoi wate fo iigation is the most cost-effective option fo multiple uses. The significance is that the policy implications discussed in this study can be applied to manage esevois fo multiple uses in Vietnam and in othe egions in Asia whee esevoi wate is often used fo fisheies as a seconday pupose. ACKNOWLEDGEMENTS We gatefully acknowledge the povision of funding fom the Fulbight Pogam fo this continuing eseach, which was initially suppoted by the Austalian Cente fo Intenational Agicultual Reseach (ACIAR). We ae also gateful to Nong Lam Univesity fo stongly

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