Farmers Preferences for Agricultural Activities Under Limited and Uncertainty Water Condition in the Chao Phraya River Basin, Thailand

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1 International Symposium Sustaining Food Security and Managing Natural Resources in Southeast Asia - Challenges for the 21st Century - January 8-11, 2002 at Chiang Mai, Thailand Farmers Preferences for Agricultural Activities Under Limited and Uncertainty Water Condition in the Chao Phraya River Basin, Thailand Acharee Sattarasart, Sombat Sae-Hae and Kamonpan Khaobanpaew 1 Thailand Development Research Institute Foundation (TDRI) 565 Ramkhamhaeng 39, Wangthonglang, Bangkok Thailand Abstract Water shortage in the dry season has been recognized as a major problem in the Chao Phraya river basin. The water storage capacity in the two big dams located in the lower northern of Thailand, Bhumibol and Sirikit, is regulated to ensure sufficient supply for agricultural activities, electricity producing, domestic use, industrial, tourist, navigation, and environmental protection. Along the basin, the marginal value product of irrigated water (MVPw) for rice production in the dry season 2000 was estimated; the highest MVPw is in the upper part (5.30 baht2/cubic meter), and the lowest is in the lower part (0.18 baht/cubic meter). If the water resource is allocated by priority, the agricultural sector, the lowest MVPw, ranks the last. Hence, the study aims to investigate the farmers responses and preferences with respect to the limited and uncertainty irrigated water. Its objectives are i) to investigate how farmers behaved under the limited and uncertainty irrigated water, ii) to examine farmers preferences for their farms under the limited and uncertainty irrigated water and iii) to examine factors affecting the farmers preferences. Information used in this study based on the farm survey of 306 households in the Chao Phraya irrigation project. Descriptive analysis and multinomial logit model are used for the study s analyses. If the water is very limited and uncertainty, the farmers preferences are i) unchanged, ii) reduce the irrigated area, iii) switch to the field crops, iv) switch to the fruit trees and iv) stop 1 Paper prepared as part of the project on Water Resource Management: Policy Guidelines for Thailand with the financial support by the Thailand Research Fund. The authors would like to express gratitude to Dr. Ammar Siamwalla, Dr. Mingsarn Kaosa-ard and Associate Prof. Somporn Isvilanonda for their valuable comments. The authors would like to thank the farmers for their patient and useful information, the government officers from the Royal Irrigation Department for their support during the survey, and the survey-team. This paper is submitted for the Sustaining Food Security and Managing Natural Resources in Southeast Asia: Challenges for the 21 st Century January exchange rate 1 US$ = baht (November 2001)

2 2 Farmers Preferences for Agricultural Activities underlimited & Uncertain Water Condition growing crops in the dry season. The socio-economic characteristics such as income, land use, land tenure, labor force, rice productivity and number of years in growing rice, are able to explain the farmers preferences. The remarkable note is that the last two factors persuade the farmers to continue growing rice in the dry season, even if the water resource is limited. One of the main factors affecting the farmers decision making for the dry season cropping pattern is water resource. Under the limited and uncertainty water resource, the farmers might shift from rice production to other productions. Besides, changes in rice farming technology, such as the use of combined-harvesters, planting methods and short-maturity and non-photosensitive rice varieties, as well as changes in land and water regimes and resource availability can influence the farmer s decision on the crop choices and farming pattern. Nevertheless the rice production is still the major crop in the area due to the unattractive and uncertain of the field crop production; unsuitable land use for the fruit trees, the limited knowledge for other productions, and so on. To ensure the water resource for their crops, the utilization of groundwater might increase and will lead to more serious problem for the water resource management in the future. Therefore, it will be a crucial issue on the water resource allocation decision in the dry season, as the water requirement in the agricultural sector might continue, besides the increasing in water demand by the other sectors. 1 Introduction The Chao Phraya basin covers approximately one-third of Thailand s land area. In the Chao Phraya basin, water from the two dams, Bhumipol and Sirikit, is regulated to ensure sufficient supply for electricity, agriculture and urban and industrial use, as well as for protection against salinity and seawater intrusion. As water shortages in the dry season have become routine, inter-sectoral water conflicts have intensified: conflicts between upstream and downstream farmers, between the agricultural sector and nonagricultural sectors and even between government agencies (TDRI, 1994; TDRI, 2001; Molle et al., 2001). Moreover, existing water storage capacities are insufficient to fully realize the potential for production in the dry season (Molle et al., 2001) and other water users. In the years when water demand exceeds supply, solutions ranging from engineering to political are sought for reallocating water (by priority or rationing) among the users. For instance, a limited amount of water will be distributed to the rice farmers, because the rice cultivation requires more water, compared with the other

3 Sattarasart et al. 3 crops. Contrary to the expectation, the actual area under rice cultivation is always higher than the planned area. One of the major reasons for the overuse of water in agriculture is that there is, in effect, open access to irrigated water supplied and groundwater. Furthermore, social and economic factors induce the intensity of rice cultivation in the dry season. The farmer s decisions about his/her farm activities depend not only on the water distribution from the irrigation projects, but also on other factors, such as the prices of crops. Forecasted land use and cropping pattern changes in response to rice-price change in the Chao Phraya river basin showed no noticeable trend of land use change as it tends to change basically in response to the change in the price of rice (TDRI, 2001). However, the rice area will reach its largest expanse of 4.56 million rai in 2006, which is beyond the maximum potential in the dry season of 3.5 to 4.0 million rai (TDRI, 2001). Projections by Molle et al. (2001) indicated corresponding result; with a growth of non-agricultural water use (BMA) at 5% per year, the average available water for agriculture in the dry season will decline from 4.6 billion m3 in 2000 to under 3.0 billion m3 in The MVPw for rice production in the dry season of the Chao Phraya river basin ranged between 0.18 to 5.30 baht/cubic meter (TDRI, 2001). Furthermore, along the basin, the highest MVPw is in the upper part and the lowest is in the lower part. If the water resource is allocated by priority, the agricultural sector ranks the last. Within the agricultural sector, the farmers who used water less efficiency rank the last too. Therefore, it is important to understand the farmers responses and preferences regarding the limited and uncertainty irrigated water. The study s objectives are i) to investigate how farmers behaved under the water scarcity condition, ii) to examine farmers preferences for their farms under the water scarcity condition and iii) to examine factors affecting their preferences. 2 Methodology The upper part of the Chao Phraya irrigation project where the irrigated water is gravity distributed is selected due to the lowest MVPw of the basin. Stratified random sampling method is used for sampling in order to cover the distance of the main canals: the west and the east. First, the main canal is divided into three parts with respect to the distance, of which the sub-projects are randomly selected for both the main canals. Then, the same procedure is applied for the households that are randomly selected within the sub-projects. Four of 11 sub-projects from the east main canal and

4 4 Farmers Preferences for Agricultural Activities underlimited & Uncertain Water Condition three of 15 sub-projects from the west main canal are selected based on the distance from the Chainat dam. About 306 households are randomly selected based on the distance from the main canal. Structured questionnaire with open-end and closed-end questions is used for gathering information on farm activities and irrigation management. The farm survey was conducted during August to October Descriptive analysis and multinomial logit model are used for the study s analyses. 3 Results and Discussions 3.1 Farm Characteristic In the study area, the family members are about 4 persons with 2 active labors who work in the agricultural activities. Main occupation is agricultural activities, both crop production and animal husbandry. Family income, including non-farm income, is roughly 131,000 baht/year. The farm size from the west main canal (34.7 rai 3 ) is relatively smaller than from the east main canal (42.2 rai). Almost of their farmland is under irrigation services. It is remarkable note that more than half of the samples in the west are landless farmers who have rent the land, while only 25 per cent in the east are landless farmers. The land intensity is relatively high with the average of 2.02 and 2.21 for the west and east respectively. However, some land is used for 3 times a year or 7 times in 2 years. The triple cropping system has started in 1996, after the severe water shortage during 1992 to The area of the triple cropping system is recorded about 1 million rai (Molle et al., 2001), because the cultural practice, advance technology and new rice varieties are accessible. Actual reasons for increasing the land intensity in this area are the irrigated water availability and to increase farm income. Rice-rice is the main cropping pattern in the area, however, some farmers grow field crops and vegetables after harvesting rice in the dry season. Rice productivity in the dry season is relatively high, with the average of 719 to 782 kg/rai, compared with the country average rice yield of 679 kg/rai crop year 2000 (OAE, 2001) rai = 1 hectare

5 Sattarasart et al Farmers Responses under the Limited and Uncertainty Water Condition Under limited and uncertainty irrigated water supplies the farmers avoided the risk of complete crop failure by reducing the irrigated area; it implies increasing the water applied per unit of land. Some farmers were switching from rice to less water requirement crops, i.e. to maximize return to water. The uncertainty-irrigated water from the surface source led some farmers invest in secondary water resource: deep or shallow wells as individual reserved water source. In some cases, the farmers asked for more irrigated water from the RID officers or the local politicians. These behaviors indicate how the farmers respond to the water shortage condition. Normally, the farmers seek to maximize the returns to the resource applied to their activities. In particular, they try to maximize returns to those resources that are scarce (Perry and Narayamamurthy, 1998). Factors affecting the farmers responses under the uncertainty water condition are i) irrigation project management, ii) farmers accessibility to the water resources, iii) farmers management of water resource in their fields, and iv) cropping pattern. For instance, after the long period of water shortage in the stakeholders in the Gediz water basin, Turkey are co-operating for the water resource allocation system. Additionally, they issued the guarantee system of the water distribution system for all the water users under the limited water condition (IWMI, 2000). It is very useful for the farmers to know about water condition at the early of the season announced by the government officers. However, about 75 per cent of the farmers have received the irrigated water as the announcement, but 26 per cent have not received as the announcement. For the dry season cropping pattern, five main factors that the farmers in the study area take into consideration are namely water resource availability, land characteristic, cropping pattern in the surrounding area, knowledge in crop cultivating and product prices. Under the assumption of scarcity of water resource, the farmers are asked about their preferences, using the example of the water shortage in If the water is very limited and uncertainty, the farmers preferences are i) unchanged, ii) reduce the irrigated area, iii) switch to the field crops, iv) switch to the fruit trees and v) stop growing crops. The farmer preference as a function of the socio-economic characteristics is examined. The dependent variable is the farmers preferences, consist of 5 choices mentioned above. The multinomial logit model is found appropriate for the case of the multiple category dependent variable. The independent variables are the socio-

6 6 Farmers Preferences for Agricultural Activities underlimited & Uncertain Water Condition economic characteristics of the farmers, namely, income, family labor in agricultural activities, land use, land tenure, number of years in growing rice and rice yield. Then, probabilities of each preference can be estimated using the equation below. J Prob (Y i = j) = e βj Χi / (1 + Σ e βk Χi ) k=1 for j = 1, 2, 3, 4 J Prob (Y i = 0) = 1 / (1 + Σ e βk Χi ) k=1 When; Y i the farmers preference i = 0 j (0-4) β coefficient of the independent variables means of the independent variables Χ i Table 1 Coefficient estimate result of the multinomial logit model with base preference unchanged reduce irrigated area switch to field crops switch to fruit trees stop growing crops Constant Family income (baht/year) -1.20E E E E E E E E-01 Agricultural family labor force Ratio of owned land/total land Land intensity (ratio) Number of years growing rice Rice productivity (kg/rai) Farm size (rai) Log likelihood function sample size Note: Only 222 samples are included for this analysis. Italic number is z-statistics. Source: TDRI (2001) As the estimated coefficients are difficult to interpret, therefore, the marginal effects of the regressors on the probabilities are calculated as below. P j = P j [ β j - Σ P k β k ] x i k

7 Sattarasart et al. 7 Number of years in growing rice and better yield will increase the probability for the unchanged choice, while the farm size and labor force play opposite roles. The family income and land ownership will cause the farmers to reduce the irrigated area but the farm size, labor force and rice yield will reduce this choice. The farmers who prefer to shift to the less water requirement crops have bigger farm size and less productivity. The only positive factor for the changing to fruit trees is the land ownership, while negative factors are the family income, land intensity, rice yield and farm size. Some farmers, who might want to stop growing crops in the dry season, have fewer experiences in growing rice. Table 2 Marginal effects Unchanged Reduce irrigated area Switch to field crops Switch to fruit trees Stop growing crops Constant Family income (baht/year) -3.67E E E E E Agricultural family labor force Ratio of owned land/total land Land intensity (ratio) Number of years in growing rice E Rice productivity (kg/rai) Farm size (rai) Note: Italic number is z-statistics. Source: TDRI (2001) Comparing the results from the model with the farm survey, the accuracy by using the model to predict the farmers preference is about 41 per cent (Table 3). The only preference that could not be predicted by the model is to switch to the fruit trees. The probabilities for all preferences from the multinomial logit model are estimated for the farmers in the Chao Phraya irrigation project (Table 4). The first three probabilities are to switch to the field crops, (33%) unchanged (32%) and to stop growing crops in the dry season (29%). The probabilities for reducing the irrigated area and switching to the fruit trees are 1% and 5% respectively. Moreover, the probabilities for the farmers alternatives can be estimated by assuming some socio-economic

8 8 Farmers Preferences for Agricultural Activities underlimited & Uncertain Water Condition characteristics, such as farm size, rice yield or family income. For instance, the bigger farm size will increase the probabilities of reducing the irrigated area and switching to the field crops. The better rice yield will increase the farmers preferences on unchanged and reducing the irrigated area. The high family income will influence the farmers to stop growing crops in the dry season. Table 3 Comparing the results of the model and the farm survey The multinomial logit model result (number of households) unchanged reduce irrigated area switch to field crops switch to fruit trees stop total The farm survey result (number of households) Unchanged Reduce irrigated area Switch to field crops Switch to fruit trees Stop growing crops Total Source: The farm survey (2000) and TDRI (2001) Table 4 Predicted probabilities for the multinomial logit model with assuming the socio-economic characteristics unchanged reduce switch to switch to stop growing irrigated area field crops fruit trees crops total The Chao Phraya project The west main canal The east main canal Socio-economic characteristics Farm size 100 rai Farm size 10 rai Fice yield 1,000 kg/rai Fice yield 400 kg/rai Owned land Income500, baht/year 30 years in growing rice Source: TDRI (2001) 4 Conclusion Water shortage in the dry season has been recognized as a major problem in the Chao Phraya river basin. Along the basin, the highest MVPw is in the upper part and the lowest is in the lower part with 0.18 baht/cubic meter. If the water resource is allocated by priority, the agricultural sector, the lowest MVPw, ranks the last. The study s aim is to investigate the farmers preferences under the limited and uncertainty water condition, there are i) unchanged, ii) reduce the irrigated area, iii) switch to the

9 Sattarasart et al. 9 field crops, iv) switch to the fruit trees and iv) stop growing crops in the dry season. The socio-economic characteristics such as income, land use, land tenure, labor force, rice productivity and number of years in growing rice, are able to explain the farmers preferences. The remarkable note is that the last two factors persuade the farmers to continue growing rice in the dry season, even if the water resource is limited. One of the main factors affecting the farmers decision making for the dry season cropping pattern is water resource. Under the limited and uncertainty water resource, the farmers might shift from rice production to other productions. Besides, changes in rice farming technology, such as the use of combined-harvesters, planting methods and short-maturity and non-photosensitive rice varieties, as well as changes in land and water regimes and resource availability can influence the farmer s decision on the crop choices and farming pattern. Nevertheless the rice production is still the major crop in the area due to the unattractive and uncertain of the field crop production; unsuitable land use for the fruit trees, the limited knowledge for other productions, and so on. To ensure the water resource for their crops, the utilization of groundwater might increase and will lead to more serious problem for the water resource management in the future. Therefore, it will be a crucial issue on the water resource allocation decision in the dry season, as the water requirement in the agricultural sector might continue, besides the increasing in water demand by the other sectors. References IWMI Dealing with Drought: A Positive Example from the Gediz Basin. International Water Management Institute. Keenan, S., R. S. Krannich, M. S. Walker Public Perception of Water Transfers and Markets: Describing difference in water use communities. Society and Natural Resource. Volume 12 Issue 4. June Molle, Franscois., Chatchom Chompadit, Thippawal Srijantr and Jesda Keawkulaya Dry season water allocation and management in the Chao Phraya Delta. DORAS-DELTA Research report no. 8 OAE Agricultural Statistics of Thailand Crop Year 2000/2001. Center for Agricultural Information, Office of Agricultural Economics, Ministry of Agriculture & Co-Operatives. Bangkok, Thailand. Agricultural Statistics No. 9/2001. Perry, C.J. and S. G. Narayamamurthy Farmer Response to Rationed and Uncertain Irrigation Supplies. Research Report no. 24. International Water Management Institute. Rosegrant, M.W. and C. Ringler Impact on Food Security and Rural Development of Reallocating Water from Agriculture. Environment and Production Technology Division. International Food Policy Research Institute. EPTD Discussion Paper No. 47. August 1999

10 10 Farmers Preferences for Agricultural Activities underlimited & Uncertain Water Condition Sattarasart, A. J. Plangpraphan and Sombat Sae-hae Crop Price Analysis and Dry-Season Land Use Changes: Can It Help Improve Agricultural Planning? TDRI Quarterly Review. Vol. 16 No. 1. Thailand Development Research Institute (TDRI). March 2001 TDRI Water Conflicts. Natural Resources and Environment Program, Thailand Development Research Institute and Queen s University, Canada. October TDRI Water Resource Management: Policy Guidelines for Thailand. with financial support by the Thailand Research Fund.

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