Willingness to Pay for Groundwater for Irrigation Use on Rice Production in Santa Cruz, Laguna, 2022

Date

6-2023

Degree

Bachelor of Science in Agricultural Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Jayson S. Cabral

Committee Member

Julieta A. Delos Reyes, Agham C. Cuevas

Abstract

Groundwater, a vital but often undervalued natural resource, plays a crucial societal role. In the Philippines, the economically ground water resources remain constant, while the demand for agriculture, especially in downstream rice production, continues to rise. However, there is a lack of economic valuation studies focusing on understanding the value of groundwater in rice production, hindering effective resource management. The misallocation and unsustainable extraction of groundwater pose significant challenges that necessitate an in-depth economic valuation study to understand its value on rice production.

This study estimated the willingness to pay of farmers for groundwater for irrigation use on rice production in Santa Cruz, Laguna during the dry season of 2022. Primary data were collected from 52 rice farmers who used groundwater to irrigate rice fields through a pre-tested questionnaire administered via personal interviews. The financial price of groundwater was estimated using the cost of extracting ground water. Additionally, the study employed Contingent Valuation Method (CVM) with a single-bound dichotomous choice to estimate the willingness to pay for groundwater through a seasonal charge ranging from Php 500 to P 3,500 in support of the groundwater conservation project. The study used Turnbull estimator and sample mean estimator for the computation of the willingness to pay. Binary logistic regression model was used to determine significant explanatory variables affecting willingness to pay.

The financial price of groundwater was Php 9,759.13 per hectare, including costs of pumping equipment, fuel, lubricants, labor, and repair. Fuel cost constituted the largest expense, reflecting the fuel-intensive nature of extraction and their heavy reliance on groundwater irrigation. The willingness to pay for groundwater using Turnbull estimate and sample means estimate was Php 1,570.51 per hectare and Php 2,011.43 per hectare, respectively. In comparison with the financial price, these were lower by up to 6.2 times. Bid price, non-farming work, farming experience, sex, individual income per cropping season, and participation in groundwater conservation were found to be significant variables affecting the willingness to pay.

In conclusion, the low direct use value of groundwater reflected by the willingness to pay was due to farmers' lack of knowledge on the volume of groundwater extracted, low conservation efforts and understanding of the economic importance of groundwater resources. This also prevented them from reducing the financial cost of groundwater extraction.

Based on the findings, the following were recommended: (a) installation of water pumps and employing pump schedule, (b) providing farmers with incentives for off-farm work, (c) barangay-based projects for sustainable groundwater extraction, and (d) educating rice farmers about the economic benefits of groundwater conservation.

Language

English

LC Subject

Irrigation farming, rice trade, Willingness to pay

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993.5 2023 A14 V55

Notes

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Document Type

Thesis

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