How much does mangrove ecosystem contribute to aquaculture an empirical study for mekong river delta

UNIVERSITY OF ECONOMICS
HO CHI MINH CITY
VIETNAM

INSTITUTE OF SOCIAL STUDIES
THE HAGUE
THE NETHERLANDS

VIETNAM - NETHERLANDS
PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS

HOW MUCH DOES MANGROVE ECOSYSTEM
CONTRIBUTE TO AQUACULTURE - AN EMPIRICAL
STUDY FOR MEKONG RIVER DELTA

by

TRAN PHU HOA

MASTER OF ARTS IN DEVELOPMENT ECONOMICS

HO CHI MINH CITY, December 2015


UNIVERSITY OF ECONOMICS
HO CHI MINH CITY
VIETNAM

INSTITUTE OF SOCIAL STUDIES
THE HAGUE
THE NETHERLANDS

VIETNAM - NETHERLANDS
PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS

HOW MUCH DOES MANGROVE ECOSYSTEM
CONTRIBUTE TO AQUACULTURE? - AN
EMPIRICAL STUDY FOR MEKONG RIVER DELTA
A thesis submitted in partial fulfilment of the requirements for the degree of
MASTER OF ARTS IN DEVELOPMENT ECONOMICS

by

TRAN PHU HOA

Academic Supervisor:
DR. PHAM KHANH NAM

HO CHI MINH CITY, December 2015


CERTIFICATION

“I confirm that the substance of the thesis has not already been submitted for any
degree and is not currently submitted for any other degree.
I certify that to the best of my knowledge and help received in preparing the thesis and
all sources used have been acknowledged in the thesis.”
Signature

Tran Phu Hoa
Date:

/

/ 2015

CERTIFICATION i


ACKNOWLEDGEMENTS

This thesis was the great stone that I had to move it, so that I could complete my
Master degree in Development Economics at Vietnam-Netherlands program.
I was truly grateful to my supervisor, Dr. Pham Khanh Nam, for his help and support
over the period of my thesis. Without his help in useful comments, I would not have
finished this master thesis. Moreover, I would like to thank his partners who had been
helped me in the indirect way.
In the period of doing this study, there were things that brought me sadness and joy.
Those emotions had mixed together, and became the sticky creature crabbing my feet
and thought. I had been stuck. However, someone had reminded me about the speech
which was “Happiness is always defined by sadness”. Thank you, my University. You
gave me the opportunity to challenge myself. You had longed for my achievement, and
you helped me to find out some of my missing parts in my journey of life.
Finally, I further wished to thank my family members, my friends and I, who have
provided me food, shelter and love. Their love and support gave me strength to open
my eyes and worked out the problem that I had buried me deeply under the ground.
Finally, please remember that I owned all of you, and I will pay back.

ACKNOWLEDGEMENTS ii

TABLE OF CONTENTS

CERTIFICATION ....................................................................................................................... i
ACKNOWLEDGEMENTS ........................................................................................................ ii
TABLE OF CONTENTS........................................................................................................... iii
LIST OF FIGURES .................................................................................................................... v
LIST OF TABLES ..................................................................................................................... vi
LIST OF ABBREVIATIONS ................................................................................................... vii
ABSTRACT............................................................................................................................. viii
CHAPTER 1 ............................................................................................................................... 1
INTRODUCTION ...................................................................................................................... 1
1.1 Problem statement ...........................................................................................................................1
1.2 Research Objectives ........................................................................................................................3
1.3 Research questions ..........................................................................................................................4
1.4 Scope and Methodology of Research ..............................................................................................4
1.5 Research structure ...........................................................................................................................4

CHAPTER 2 ............................................................................................................................... 5
LITERATURE REVIEW ........................................................................................................... 5
2.1 Theoretical review...........................................................................................................................5
2.1.1 Wetland and Mangrove forest ..................................................................................................5
2.1.2 Ecosystem services...................................................................................................................8
2.1.3 Production function ............................................................................................................... 11
2.2 Review of empirical studies ......................................................................................................... 12

CHAPTER 3 ............................................................................................................................. 15
RESEARCH METHODOLOGY ............................................................................................. 15
3.1 Analytical framework................................................................................................................... 15
3.2 Modeling specification ................................................................................................................. 16
3.3 Variables ...................................................................................................................................... 17

3.3.1 Environmental variables........................................................................................................ 18

TABLE OF CONTENTS iii


3.3.2 Unit cost ................................................................................................................................ 19
3.3.3 Aqua-farming output ............................................................................................................. 19
3.3.4 Farming cost as dependent variable ...................................................................................... 21
3.3.5 Pond characteristics ............................................................................................................... 23
3.3.6 Household characteristics...................................................................................................... 23
3.4 Methods of estimation .................................................................................................................. 24
3.5 Endogeneity problem ................................................................................................................... 25
3.6 Data sources ................................................................................................................................. 26
3.7 Conclusion ................................................................................................................................... 28

CHAPTER 4 ............................................................................................................................. 29
EMPIRICAL RESULTS AND DISCUSSION ........................................................................ 29
4.1 Descriptive statistics of dependent and independent variables .................................................... 29
4.2 Correlation analysis: .................................................................................................................... 31
4.3 Non parametric analysis ............................................................................................................... 32
4.4 Empirical results: ......................................................................................................................... 33
4.4.1 Estimating the effect of mangrove forest on cost of aquaculture production using OLS
regression ....................................................................................................................................... 33
4.4.2 Estimating the effect of mangrove forest on cost of aquaculture production using IV
estimation ....................................................................................................................................... 36
4.5 Conclusion .................................................................................................................................... 39

CHAPTER 5: ............................................................................................................................ 40
CONCLUSION, LIMITATION AND RECOMMENDATION .............................................. 40
5.1 Conclusion ................................................................................................................................... 40

5.2 Limitation ..................................................................................................................................... 41
5.3 Policy Recommendation .............................................................................................................. 41

REFERENCES ......................................................................................................................... 43
APPENDIX ............................................................................................................................... 48

TABLE OF CONTENTS iv


LIST OF FIGURES
Figure 1: Changes in world mangrove areas, 1980-2005. ............................................. 1
Figure 2: The link between seafood production and mangrove ecosystem services ... 15
Figure 3: The expected relationship between mangrove forest and aquaculture ......... 16
Figure 4: Illustration of “Mangrove cover” variable ................................................... 19
Figure 5: The graph illustrated the relationship of mangrove forest and total cost of
aquaculture by using estimated valuation statistic. .............................................. 38

LIST OF FIGURES v


LIST OF TABLES
Table 1: Variables of household characteristics ............................................................ 30
Table 2: Correlation Coefficients of variables ............................................................... 31
Table 3: T-test results ..................................................................................................... 33
Table 4: The VIF for coefficients in the non-restricted model ...................................... 34
Table 5: Estimated results of three regression models ................................................... 36

LIST OF TABLES vi

LIST OF ABBREVIATIONS
EPA

The United States Environmental Protection Agency

FAOs

Food and Agriculture Organization of the United Nations

GSO

General Statistics Office of Vietnam

IUCN

International Union for Conservation of Nature

MA

Millennium Ecosystem Assessment

OLS

Ordinary Least Squared regression

PFES

Payment for Forest Environmental Services

VND

Vietnam Dong

WWF

World Wide Fund

LIST OF ABBREVIATIONS vii


ABSTRACT
Mangrove forest exploitation had been one of the critical issues for developing
countries in recent years. Aquaculture expanding was believed to be the number one
reason for the vanishing of mangrove forests. Using the production function approach,
the paper attempted to get insides about the contribution of mangrove forest to
aquaculture, particularly Mekong Delta in Vietnam. The result found out that
mangrove forest had connected with aquaculture in the non-linear relationship. It
concluded that mangrove forest could help farmers to reduce their cost of production.
In addition, the rate of reduction was declining as there was more mangrove forest
acreage adding to the surrounding of a particular pond.

Key word: mangrove forest, aquaculture, cost of production

ABSTRACT viii


CHAPTER 1
INTRODUCTION
1.1 Problem statement
There were two reasons that motivated me to do this thesis. The first one was statistics

that reported about the huge mangrove destruction around the world. The second one
was the need of finding payment method in order to protect the forest.
It had been estimated that 35 per cent of the world’s original mangrove cover had
vanished on average (Valiela, Bowen, & York, 2001). For instance, it was about 3.6
million hectares of mangrove forest that had disappeared for the past 25 years. In
addition, Asia accounted for about more than 1.9 million hectares lost, North and
Central America lost about 690,000 hectares and Africa was about 510,000 ha (FAO,
2007). Mangrove forest acreage changes from 1980 to 2005 had been summarized in
the figure below, which was provided by FAO in their report about the mangrove forest
1980-2005.
Figure 1: Changes in world mangrove areas, 1980-2005.

Sources: Adapted from FAO (2007, Figure 4)

CHAPTER 1 1


According to this figure, Asia had been noticed for being a region that contributed the
largest lost in mangrove forest area comparing to other regions in the past 25 years. In
fact, there were only five Asian countries creating more than 90 percent mangrove loss
in Asia, including Indonesia, Pakistan, Malaysia, Vietnam and India (FAO, 2007).
In Indonesia, Malaysia and Vietnam, aquaculture and agriculture expansion would be a
significant reason of the huge reduction in forest area. Indonesia, the country with the
largest mangrove area in the world had faced the highest annual rate of loss from 2000
to 2005, which was about 1.6%, and it mainly caused by conversion of land for shrimp
farms (FAO, 2007). Moreover, Giri et al. (2011) found that 63% of mangrove
destruction in Indonesia from 1975 to 2005 was attributed to aquaculture practices.
Similarly, it accounted for about 43 percent of 110,000 ha of Malaysia mangrove losses
from 1980 to 2005 (Giri et al., 2011). In Ca Mau province Vietnam, more than 50
percent mangrove losses were converted to shrimp ponds from 1973 to 2008 (LamDao, Pham-Bach, Nguyen-Thanh, Pham-Thi, & Hoang-phi, 2011). Although this

number had clearly pointed out that the booming aquaculture industry especially
shrimp farming was the main problem of this destruction, mangrove forest areas kept
reducing in its quality and quantity.
The fact was that shrimp farming could help local communities to improve their
standard of living. People who lived in coastal areas were often poor, especially in
Southeast Asia. With its high return, shrimp production seemed to promise better life
for those people, although the risk of default was high. In Vietnam, there was a time
that the government encouraged people to construct shrimp ponds, and it was believed
to alleviate poverty. Consequently, a lot of mangrove forest had been converted into
shrimp ponds. However, I doubted about the fact that mangrove forest could not get
along with aquaculture. Mangrove ecosystem services should benefits aquaculture in
some ways. For example, a farmer might not need to buy as many as crab and shrimp

INTRODUCTION 2


seeds, since he could collect them from mangrove forest. Water running through
mangrove forest might be stable in quality, so that chemical usage to treat the water
input might reduce. As a result, making decision on how to improve the standard living
of the coastal communities and to protect the forests in parallel would be a challenge of
policy makers.
In Vietnam, the government had applied Payment for Forest Environmental Services
(PFES) to be the additional revenues that would finance the conserving activities. The
main idea of this policy was to ask for payments made by people who used mangrove
ecosystem services. The government had to choose the appropriated fee schedule so
that it would not only maintain the conservation budget but also create the incentive of
the communities in protecting the mangrove forest. It should be demands on researches
that attempted to value the ecosystems, as it seemed that policy makers needed reliable
valuations to advise them in making good Decree and Act.
As a result, by estimating monetary values that ecosystem services might contribute to

the aquaculture activities, the thesis attempted to give more insides about the existed
relationship of coastal forests and human activities, so that it might help policy makers
in improving the quality of their decisions.

1.2 Research Objectives
The main research objective of the study was to examine the relationship between
mangrove ecosystem services and aquaculture in the Mekong River Delta.
There were two specific objectives:
- To estimate the monetary value of ecosystem services that mangrove forests
contribute to aquaculture production in Ben Tre and Tra Vinh provinces.
- To find out optimal mangrove areas for aquaculture production in Ben Tre and Tra
Vinh provinces

INTRODUCTION 3


1.3 Research questions
What would be the monetary value of mangrove ecosystem services to aquaculture
production?
What would be the optimal mangrove forest area for aquaculture production?

1.4 Scope and Methodology of Research
This thesis used the cross sectional data of 125 shrimp ponds in Ben Tre and Tra Vinh
provinces. Shrimp ponds included both intensive and extensive farming techniques.
Data was collected from a field survey in 2014 which was financed by IUCN.
Cost function was employed to derive the role of mangrove to aquaculture on the
premise that mangrove ecosystem helped to reduce farming costs by providing water
quality maintenance service or food input services.

1.5 Research structure

The thesis was organized in five chapters, including this introduction as Chapter 1. The
following would be Chapter 2, and it reviewed key concepts showing relationship
between mangrove forest and aqua-farming. In addition, valuation methods for
ecosystem services and empirical studies that were relevant to this topic would also be
discussed. Section 3 described data collection and methodology in which the analytical
model and method of estimation were outlined. Section 4 presented the results
generated by estimating the analytical models mentioned in Section 3, and made
comments on those outcomes. Section 5 briefly made conclusions, recommendations
and limitations of the research.

INTRODUCTION 4


CHAPTER 2
LITERATURE REVIEW
In this chapter, section 2.1 would explain concepts which could be view as building
blocks in understanding mangrove forests and their economic values. Next, section 2.2
would review some empirical studies relating to effort of valuing mangrove forests.

2.1 Theoretical review
It was divided into two sections, which were mangrove’s ecosystem services and the
production function method. The thesis would give a brief introduction about
ecosystem services that people obtained from mangrove forests. In fact, it focused on
the services that had a potential relationship with aquaculture, for example, water
purification, seed and food inputs. The production function method would be justified
for its use in answering the research questions, and then the cost function method
would be introduced.

2.1.1 Wetland and Mangrove forest
It was necessary to understand how mangrove forests were defined before we started to

learn about their values. There were debates about how mangrove forest should be
defined (Barbier & Strand, 1998). Scientists had discussed several questions which
were believed to be not easy to answer. For example, how many time and how long a
land had to be flooded, in order to pronounce it was the wetland. In fact, the existence
of water in a land changed its characteristic of soils, microorganisms, plants and
animals. However, some lands had started as open water, but it would become dry land
as an occupation of sediment and vegetation. Moreover, some lands were in the
transitional zones between permanently wet and generally dry environments. As a

CHAPTER 2 5


result, it would be challenged for scientists and policy makers to learn and manage the
wetland where classifying a land to be aquatic or terrestrial environmental habitats
could not be accomplished. Consequently, this issue leaded to an agreement on how
wetland was defined.
There was an agreement called Ramsar, which was known as the oldest of the modern
global intergovernmental environmental agreements. It had 168 parties which
represented to 168 countries, and they all agreed in Ramsar Convention (Article 1.1) to
adopt the wetland definition as:
“areas of marsh, fen, peatland or water, whether natural or artificial, permanent or
temporary, with water that is static or flowing, fresh, brackish or salt, including areas
of marine water, the depth of which at low tide does not exceed six meters”
Moreover, the Convention (Article 2.1) indicated that wetlands might incorporate:
“riparian and coastal zones adjacent to the wetlands, and islands or bodies of marine
water deeper than six meters at low tide lying within the wetlands”
The definition provided a general framework for countries to build their legal systems,
which helped to manage wetlands or mangrove forests in particular. For instance,
Australia Department of Environment defined wetlands as: “areas of permanent,
periodic or intermittent inundation that hold still or very slow moving water which

leads to the development of hydric soils, and have developed biota adapted to
flooding”. The United States Environmental Protection Agency (EPA) defined
wetlands as an area where water covered the soil, or near the surface of the soil all year
or for varying period of time during the year. Moreover, the definition had opened the
view about wetlands. It might occur near the rivers, shallow coastal waters or coral
reefs. In fact, the wetland had five types which was reported below (Barbier et al.,
1997),

LITERATURE REVIEW 6


-

‘Estuaries’ – where rivers meet the sea and salinity is intermediate between salt
and freshwater (e.g., deltas, mudflats, salt marshes)

-

‘Marine’ – not influenced by river flows (e.g., shorelines and coral reefs)

-

‘Riverine’ – land periodically inundated by river overtopping (e.g., water
meadows, flooded forests, oxbow lakes)

-

‘Palustrine’ – where there is more or less permanent water (e.g., papyrus
swamp, marshes, fen)

-

‘Lacustrine’ – areas of permanent water with little flow (e.g., ponds, kettle
lakes, volcanic crater lakes)’

According to those categories above, the mangrove forest in Ben Tre and Tra Vinh
provinces would be classified as ‘Estuaries’. Moreover, it was supported by the
definition, which could be found in a FAOs report called “The World’s Mangroves:
1980-2005” (FAO, 2007). They defined a mangrove forest as a coastal forest, which
was observed in sheltered estuaries and along river banks and lagoons in the tropics
and subtropics. Those areas characterized tidal environment which was affected by
inundation, high salinity and an unstable soil.
In the brackish water, Tomlinson (1986) showed that ecosystem and plant species had
developed to survive in this typical environment. For example, some plants could
actively remove salt from their tissues, such as, their leaves. They also developed
special root system, like stilt or prop roots and aerial or pneumatophores roots. Stilt
roots helped a plant to increase its stability in wet and muddy soil, and most of
mangrove species developed this system, for instance Rhizophora’s roots. Aerial roots
assisted a plant in its aeration, and roots might have different appearance. We could
find down that Sonneratia root and Avicenna root had sharp pneumatophores aerial
roots which looked like an anchor. The Bruguiera roots were curved that looked like

LITERATURE REVIEW 7


human knees bent. Moreover, mangrove plants had the most unique reproductive
strategies called vivipara. It was the ability of seeds to germinate into propagules while
they were on the parent trees. For example, seed of Rhizosphere developed to a long
cigar shaped propagule before it fell to the mud. This development helped those
species to maintain the high reproduction rate.

According to the WWF (WWF, 2013), a mangrove forest was a very dynamic and
highly productive ecosystem. It not only played multiple ecological functions essential
to its surrounding habitats, but was also an important resource for coastal communities.

2.1.2 Ecosystem services
The thesis chose the definition of ecosystem services which had been used by
Millennium Ecosystem Assessment (2005), in order to be a structure to present
mangrove benefits. The definition was quoted as follow: “Ecosystem services are the
benefits people obtain from ecosystems”. Using this definition meant that we had to
consider ecosystem services in a bigger picture, as a combination of “goods” and
“services” provided by the mangrove forest in particularly. The research would give an
overview of the mangrove benefits. It was mainly structured by following four
categories, including provisioning, supporting, regulating and cultural services (MA,
2005).
Provisioning services were natural products that people could take from the ecosystem
(MA, 2003). In fact, communities could obtain products, including food and fiber, fuel,
genetic resources, bio-chemicals, natural medicines, pharmaceuticals, ornamental
resources and fresh water (Walters et al., 2008). His research indicated that Rhizophora
species could produce high calories wood (FAO, 1994), thus it was ideal for
consuming as firewood or making charcoal. Moreover, wood collecting from
mangrove species like Avicennia and Sonneratiathe were strong and durability, which
were used by coastal communities to build houses, fences, and fishing equipment

LITERATURE REVIEW 8


(Walters et al., 2008). Roofs, walls and floor mats of coastal communities in South
East Asia were usually made from “nipa” palm collected from the mangrove forest
(Ejf, 2003; Walton et al., 2006). In addition, FAOs (Giesen, Wulffraat et al., 2007) had
shown that 77 percent of all mangrove plants could benefits to human wellbeing. In

fact, it was about 110 mangrove species that could be used for medical purposes. While
41 percent of plants played role as medicinal, 25 percent of them were used as
construction material. 34 percent of those were used as food and fuel such as,
vegetable, spice, fruit and charcoal. Ornamental services were about 17 percent.
Regulating services were benefits obtained from regulation of ecosystem processes,
such as climate regulation, storm protection and water purification (MA, 2005). Using
data of 25 mangrove forests in Indo-Pacific region, the calculation showed an average
that one hectare of the mangrove forest contained about 1,023 Mg carbon (Donato et
al., 2011). As the high capacity of storage carbon, such as CO and CO2, mangrove
forests had been known as the most carbon rich forests in the tropics, and confirmed
that they had a significant contribution to climate-change mitigation. Mangrove forests
could be low cost and effective barriers to protect the coastal communities away from
casualties and damages caused by storm surges (Barbier, 2007; Barbier &
Enchelmeyer, 2014). Tanaka et al. (2007) had shown that mangrove species like
Rhizophora and Avicennia could effectively slow down the water flow and reducing
wave heights. Kathiresan and Rajendran (2005) had concluded that the Indian Ocean
Tsunami caused bigger damages to villages, which did not locate behind the mangrove
buffer. Mangrove species were special because of their complex aerial root structure,
which would made them to be an important sink of suspended sediment (Wolanski et
al., 1995). For example, mangrove fringes could trap to about 1,000 ton of sediment
per kilometer (Wolanski et al., 1998). In fact, polluted sediments could be purified
while they were trapped in the mangrove forest (Wolanski, 2007). Technically, field
experiments had confirmed the wastewater treatment service (Chen et al., 2009).

LITERATURE REVIEW 9


Stabilizing toxicity and organic materials contained in sediments would contribute
quality water for aquaculture. Moreover, it might help to maintain the health of other
ecosystems like coral reefs and seagrass which also produced huge benefits to human

well-being.
Supporting services were those that were necessary for all other ecosystem services,
and include soil formation and retention, production of atmospheric oxygen, primary
production, nutrient cycling, water cycling and provisioning of habitat (MA, 2005).
Litter production was one of the important tangible benefits of mangrove forests that
helped them to simultaneously provide soil formation, primary production, nutrient
cycling and provisioning of habitat. The high litter production and rapid turnover of
leaf litter suggested that mangrove forests were the productive supplier of nutrients and
organic matter (Tam et al., 1998). Thus, soils could be replenished by new nutrients,
and increased in the primary productivity of mangrove species. In addition, organic
matter like organic carbon was the important material in the mangrove food web. For
example, it was food source for developing mangrove benthos communities. The
development of this commune had created the fuel for mangrove fauna like aquatic
species, birds and mammals (Cannicci et al., 2008; Kristensen, 2008; Nagelkerken et
al., 2008). Moreover, special structure of mangrove forest created ideal shelters for
many living species to stay away from predators and environmental fluctuation
(Nagelkerken et al., 2008). Although the provisioning of habitat of mangrove forest
usually made us to go a long way to understand it, we had to admit that this service
played an important role in the existence of valuable species including meiofauna,
macrofauna, shrimps, fishes, etc.
Cultural service preferred to those nonmaterial benefits that people received from the
ecosystem services, for example recreation and tourism opportunities, aesthetic
information, inspiration for culture, spiritual experience and cognitive information

LITERATURE REVIEW 10


(MA, 2005). Migratory birds chose mangrove forest to be their breeding and winter
grounds, thus their existence would attract bird watchers and scientists (Barbier et al.,
1997). Moreover, an increase in research papers had supported the recreational services

of mangrove (Barbier, 2012; Ewel et al., 1998; Sathirithai, 1995).

2.1.3 Production function
The mangrove ecosystem services suggested that there had appeared a connection
between mangrove forests and aquaculture. Provisioning, regulating and supporting
services were believed to be the most important in supporting aquaculture activities.
In fact, mangrove forests might provide natural seeds for farming. Seeds would not
only be shrimplets, juvenile fishes and crabs but also quality broodstock for suppliers
of post larval and juvenile shrimps and fishes. Moreover, for the integrated farming
type, the amount of phytoplankton and algae containing in the water source would be
valuable food for feeding.
In addition, it was believed that a mangrove forest had ability to purify water, thus
water ran through it might meet the quality required for aquaculture. The water
parameters would be more stable and contain less toxic, so that farmers could reduce
the amount of chemical to treat this input.
Coastal economic activities always faced the risk of being damage by erosion, storm
and tsunami. The mangrove forest could trap sediment and maintain the soil formation,
which might control for erosion. It also reduced the energy wind and wave generated in
a storm or tsunami. In sum, it was no doubt that mangrove forest could act as an
important living barrier to mitigate those issues.
The production function approach could only be applied in a case that the relationship
between environmental regulatory function and the economic activity was well
understood (Barbier, 2000). Since the potential ecosystem services contributed by the

LITERATURE REVIEW 11


mangrove to aquaculture had been confirmed, the production function approach would
be used as a main valuation method applying in the thesis. The production function
would expressed as follow,

Q = F (Xi … Xk, S)
With X represented to inputs that needed to produce output Q. S was environmental
variables
The cost function would be,
C = F (Qi, Xi … Xk, S)
With C was the cost of production

2.2 Review of empirical studies
There were an increasing number of researches using different estimation methods that
attempted to value the ecosystem services of mangrove forest around the world. The
thesis would review some research papers that implemented valuation approaches, such
as market price, replacement cost, production function and contingent valuation.
The market price approach was practiced in order to value the direct use value, such as
on-site fisheries, forestry and aquaculture. The approach simply found out value of
ecosystem services based on a market price of a service and the quantity of it. For
example, Christensen (1982) found out that mangrove forest providing fruit, cigarette
wrappers and nipa thatch had the value of US$230 per hectare a year in Chanthaburi,
Thailand. Moreover, a hectare of mangrove forest would give the same value of US$30
a year for on-site fishery and forestry. It contributed to aquaculture and agriculture the
average value of US$206 and US$165 per hectare a year respectively. In Vietnam, Do
and Bennet (2005) had estimated the total value of one hectare of Camau’ mangrove
forest producing in the year 2001, which equaled to AUD$982.3. In fact, the
aquaculture had the highest estimation which was AUD$523.6 per hectare. Timber was

LITERATURE REVIEW 12


in the second place of AUD$275.8 per hectare. It contributed the value of AUD$163,
AUD$10, AUD$9.4 and AUD$0.5 to fisheries, medicinal plants, fuelwood and Nipa
leaf respectively.

The placement cost approach had been used to value the erosion mitigation and storm
prevention services providing by mangrove barriers. The idea of this approach was to
estimate the cost of replacing mangroves with the artificial barrier that provided the
same services (Chong, 2005). Sathirathai and Barbier (2001) had used the cost of
US$1011 (in 1996) to build one meter of artificial coastal barrier which was provided
by Thailand government. They found out that US$13.38 per m2 was the price to pay
for storm prevention service providing by 75-metres stand of mangrove.
The production approach could be used in cases that ecosystem services were proved to
have beneficial contributions to the productive activities (Barbier, 1994). For instance,
using pool time-series and cross sectional data over the 1983-96 period for Thailand,
Barbier (2007) concluded that the annual loss in the habitat-fishery supporting service
was around US$99,000. The result was calculated by assuming that the aquatic stock
did not change, and it was called the static approach. In order to make the valuation in
the biological growth, the dynamic model could be applied. The model found out that
the loss was much bigger which equaled to about US$1.5 to 2.0 million.
The contingent valuation approach could be employed to estimate the use values and
nonuse values of mangrove ecosystem services (Barbier, 2000). In fact, by asking
people the willingness to pay for ecosystem services, the stated-preference study
needed two key conditions. The first one was the availability of information about the
interested services, so that it would encourage people to give their rational willingness
to pay. The second one was that the change in the natural ecosystem needed to be well
explained, so that people might not fell to reject the valuation scenario (Bateman et al.,
2011).

LITERATURE REVIEW 13


The valuation conducted in Kosre, Micronesia had shown that local people would like
to pay from about US$1.00 to 1.26 million to protect the mangrove swamps (Naylor
&Drew, 1998). Moreover, basing on the available net value of marketable products, it

estimated that the value of mangrove forest would be between $666 thousand and $1
million per year (1996 prices). In Vietnam, by asking the willingness to pay of the
shrimp farmers to ecosystem services collecting from mangrove forests, Ha (2005)
showed the estimated value of mangrove ecosystem services for supporting the
aquaculture was about US$7.60 per hectare a year.
2.3 Conclusion
In summary, this chapter had presented the definition of mangrove forest and its
ecosystem services. Moreover, the potential benefits of mangrove forest that could
contribute to the aquaculture production had been noticed in order to emphasize the use
of production function in estimating the ecosystem services value. In addition, there
were reviews of different valuation methods used to estimate the contribution of
mangrove forests.

LITERATURE REVIEW 14


CHAPTER 3
RESEARCH METHODOLOGY

3.1 Analytical framework
Figure 2 described the conceptual framework (Rönnbäck, 1999), which was adopted by
this thesis for evaluating the relationship of mangrove forests and the aquaculture. This
figure had shown the ecological and biophysical links of mangroves that sustained
seafood production (Rönnbäck, 1999). Mangrove forest supported the aquaculture by
five identical services, including insurance, water quality maintenance, food input,
broodstock and seed.
Figure 2: The link between seafood production and mangrove ecosystem services

Source: Adapted from (Rönnbäck, 1999)

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