Deforestation

Issues

As economic growth increases, so too does pressure on land use. Land is required for factories and housing, and farming is pushed to increasingly unproductive land. All these activities reduce well-being as people lose their traditional land tenure and are forced to farm unproductive land, which results in increased work for less result. Within many developing countries (such as Thailand) the majority of the population are reliant on agriculture and subsistence farming for their livelihood (Dixon 1996). Forests in Thailand do not add to social welfare only through aesthetic reasons. Forests are still important for many people to earn their livelihood. Due to the increasing demand for land through the forces of economic growth, wetlands and forests are facing increasing pressure and more is disappearing each year. Deforestation is an important environment issue as it directly affects a very large number of Thais (Tingsabadh 1989).

-35000 -30000 -25000 -20000 -15000 -10000 -5000 0 1975197 6 19771978197 9 19801981198 2 198 3 1984198 5 198 6 1987198 8 198 9 1990199 1 199 2 19931994199 5 1996199 7 199 8 199 9 Years Bah t

Within Thailand, the official target for forest coverage is 40 percent (Trebuil 1993). This was last achieved in 1973. In 1999, forests coverage fell progressively to under 17 percent in 1999. It is unlikely that the target of 40% will be reached (Bello 1995).

Social Choice Perspective

Market perspectives reflect private ownership values. When natural resources are not owned, they are considered free. As a result, over-harvesting, destruction, or lack of maintenance causes a “tragedy of the commons”. The individual preference costs for cutting down a hectare of forest to increase land available for farming are close to zero as there are many millions more hectares of forest remaining. But when this preference is aggregated, deforestation has a social cost not reflected by these individual choices. Social choice perspective captures these costs to social welfare.

The major problems of deforestation include the loss of wildlife, soil, watersheds, bio- diversity and access to livelihoods by traditional farmers (Dearden 1993; Turner et al. 1994). Forests have provided rural Thai people their livelihood for centuries. As this food source decreases so to does the ability to live independently or to remain outside of the money economy.

To achieve the record levels of economic growth in Thailand, the environment, and particularly the forests, have been exploited (Warr 1993a; Kakwani and Krongkaew 1997; Dixon 1999). This exploitation has included the denuding of large forest tracts to allow extra cultivation, the over-harvesting of forest and timber products and the destruction of forests for mining purposes (Dixon 1999).

At a national policy, the recognition that forests add both to economic growth and quality of life, at the village and national levels, is now explicitly recognised (Ministry of Finance 2001; NESDB 1996, 2000). The policy aim is to maintain a balance in the use of natural resources, such as forests, between the economic benefit and the continuing functioning of a healthy eco-system.

Methodology

Based on a study undertaken by Panayotou and Parasuk (1990), the cost of deforestation is estimated at 886 baht per hectare of forest lost. Deforestation causes local soil erosion, regional flooding and continental and global unseasonable climates. Soil erosion is very serious for farmers. For example, a loss of 5 centimetres of topsoil results in a twenty-two percent reduction in maize yields and a 15 centimetre reduction in topsoil reduces maize yields by half. The calculation of the cost of deforestation ‘is specified in double-log linear function form, and is estimated with data from 1961 – 1987’ (Panayotou and Parasuk 1990, p. 56). This estimate is probably conservative as it only considers the cost of soil erosion. The real cost of deforestation would be higher if other factors, such as loss of wildlife, wildlife sanctuaries, flooding and global climate change were incorporated:

D = DF(886) [5.10]

where D = cost of deforestation

DF = hectares of deforestation

Figure 5.4 Cost of Deforestation in Thailand, 1975-1999 (1988 prices – millions of baht)

Source: Author’s own calculations

Results

The cost of deforestation is dependent on the levels of forest destruction each year. At its height the negative impact of deforestation as calculated at over 100,000 million baht (1977 and 1978). This compares with the cost of deforestation in the final year of study, 1999, in which the cost was only 4526 million baht. This dramatic change can be attributed to both tighter controls on deforestation, but also on the fact that has a resource is reduced, it becomes more difficult to maintain previous levels of destruction. As Thailand’s forest resources have dwindled over the twenty-five years of this study, their protection has increased. However, the damage has already occurred and can be evidenced by the absolute cost over the period of study. The reduction of social welfare due to deforestation between 1975 – 1999 has been 850,000 million baht. This is a significant reduction and signals that economic growth is not always desirable.

-1 20 0 00 -1 00 0 00 -80 0 00 -60 0 00 -40 0 00 -20 0 00 0 197 5 197 6 197 7 197 8 1979 198 0 198 1 1982 198 3 1984 198 5 1986 198 7 1988 198 9 199 0 199 1 199 2 199 3 1994 199 5 1996 199 7 1998 199 9 Y e ars Ba h t