Managing the trade-off between conservation and exploitation of wetland services for economic well-being : the case of the Limpopo wetland in southern Africa

Abstract

This study had two main objectives. The first objective was to determine the factors that influence rural households’ labour allocation and supply decisions for competing livelihood activities, including wetland activities. The second objective was to: develop an ecological-economic model establishing the linkages between the economic and ecological components in a wetland system and apply the model to evaluate the impacts of alternative wetland management and policy regimes on wetland functioning; and supply ecosystem services and economic well-being. To achieve the first objective an agricultural household framework was used. The reduced form labour use and supply equations for wetland products and agricultural grain, derived from optimising the agricultural household model, were estimated jointly using a seemingly unrelated regression model. The model was fitted to data collected from a survey of 143 households in a wetland system in the Limpopo basin of South Africa. Results showed that poor households, most of whom are female-headed households, have less capacity to participate in off-farm employment and rely heavily on farm and wetland activities for their livelihood. This implies that environmental protection policies that limit access to the wetland resources will deepen poverty as the poor will suffer more from deprivation of resources, which play a key role as a livelihoods safety net for the poor. This suggests that in order to enhance the sustainable management of wetlands there is need to identify and promote local level wetland management practices that allow the poor to use wetlands to enhance their economic well-being with minimum adverse effects on wetland ecological conditions instead of adopting strict wetland protection measures. In addition, there is also a need to broaden the opportunities for the poor to diversify into off-farm livelihood activities. This minimises the risks of income fluctuations associated with farm and natural resource-base livelihood sources and therefore provides the necessary positive incentives for wetland conservation and sustainable use. Better access to education is an important instrument for enhancing the poor’s ability to diversify into off-farm livelihood options. These results suggest that wetland conservation and sustainable use has to be integrated with the broader rural poverty reduction initiatives such as: improved access to education; investment in irrigation infrastructure; and improving access to markets. Results also indicate that a household’s exogenous income and wealth status (asset endowment) enhance farm production whilst reducing dependence on wetland products for livelihood. The government should pursue policy measures that reduce rural household liquidity constraints and enhance investment in productive assets (e.g. improving rural household access to credit and off-farm income opportunities) to boost farm production and enhance wetland conservation and sustainable use. To achieve the second objective the study developed a dynamic ecological-economic model. The model is based on the system dynamics framework to capture the multiple interactions and feedback effects between ecological and economic systems. The application of the model in simulating policy scenarios suggests that wetland ecosystem services (crop production and natural resource harvesting) are interlinked with trade-offs involved through their competition for labour, water and land resources. Policy scenario simulation results showed that diversifying livelihoods out of agriculture simultaneously improves economic well-being and enhances wetland conservation. Pure conservation strategies impose significant losses in the economic welfare of the local population unless supported by diversification of livelihood sources. The simulation results also show that the development of a competitive marketing system for harvested biomass products increases returns to wetland biomass products relative to that of wetland grain and it reduces conversion of wetlands to agriculture. Simulation of the predicted reduction in annual precipitation due to climate change in southern Africa showed that climate change is likely to accelerate the conversion of wetlands to agriculture, confirming the important role wetlands play in managing climate variability in smallholder agricultural systems. Government policies that support livelihood diversification into off-farm livelihood opportunities and improve the capacity of the rural poor to adapt to climate change, especially droughts, are critical for wetland conservation and sustainable use.