A Cost-Benefit Analysis of Dike Heightening in the Mekong Delta

by Tong Yen Dan

Investing in dike heightening in the Vietnamese Mekong Delta (VMD) has remained a contentious issue among policy and decision makers in Vietnam. Aside from the changes in the connectivity of the floodplain brought by dike heightening, the increase in rice cropping intensity enabled by the high dikes has broader adverse environmental consequences. Accordingly, this study conducted a cost-benefit analysis (CBA) of dike heightening in VMD. The research team conducted surveys in Vinh Phu and Vinh Binh communes in An Giang province, Vietnam. The former followed the three-rice-cropping system in the high dikes; the latter, the two-rice-cropping system in the low dikes. Results showed that the decrease in the three-crop farmers’ profit from the first and second crops was the main cost of dike heightening (54.5% of total cost of dike heightening), followed by infrastructure costs (28.3%), the value of foregone revenues from floodplain fishery (16%), and the increase in pesticide-use external costs (1.2%). Based on net present values, dike heightening is not a viable option for VMD from both the public and private perspectives. This conclusion was robust to alternative choice of discount rates and alternative assumptions regarding the decrease in rice profits of those following the use of high dikes.

 

  • Publication Year: 2015
  • Country: Vietnam
  • Research Area: Agriculture
  • Research Topic: Program Evaluation
  • Analytical Framework: Economic Analysis
Economy and Environment Program for Southeast Asia