3Returns Blog

SEOUL, South Korea, Mar 20 2020 (IPS-Partners)

On Thursday 20 and Friday 21 February, the Global Green Growth
Institute (GGGI) in partnership with the Ministry of Natural
Resources and Environmental Conservation (MONREC) and the
University of Queensland (UQ) held a validation workshop on the
3Returns Model and Framework, presenting an Investment Case
for Coastal Landscape Mangrove Restoration in Myanmar

through the findings from an Economic Appraisal of
Ayeyarwady Mangrove Forests, Bio-based Value Chains for Mangrove
Restoration and Benefit Sharing Mechanisms
. The event
proved informative for both participants and presenters alike,
providing critical insights and opening dialogue between multiple
government departments.

The Importance of Mangroves on the Ayeyarwady

The mangroves of the Ayeyarwady Delta are an important natural
resource for local residents as well as the nation-at-large. They
provide significant ecological, social and economic benefits.
Ecologically, mangrove habitats provide breeding grounds and
hatcheries for birds, fish, crustaceans and other organisms.
Additionally, mangroves constitute a major source of carbon
sequestration, making them an important asset for Myanmar’s
climate change mitigation.

Mangrove forests support coastal disaster resilience through
their protection of communities from inundation from tidal surges
and strong winds. Importantly, for neighbouring communities,
mangroves also provide economic benefits. The collection of
fuelwood, fish and crustaceans supplements the incomes of many
people in the delta, with products reaching as far afield as China.
However, not all members of local communities have been able to
share in the benefit from these activities, in particular landless
– who account for 73% of people in coastal areas – and

Above: U Hla Maung Thein, Director General Environmental
Conservation Department – ‘conservation of mangroves is a
national responsibility’

The mangroves’ positive impacts have been degraded by
unsustainable land use practices. Less than 10,000 hectares of good
quality mangroves exist within a total habitat range of 85,000
hectares. This degradation has largely occurred as a result of
illegal logging and fuelwood extraction and the conversion of
mangrove habitat into agricultural rice paddy and large-scale
shrimp ponds. The significance of the mangroves of the Ayeyarwady
Delta from an ecological, social and economic perspective
highlights the need for a change in landscape management practises
in order to preserve their benefits.

Above: Dr. Aaron Russell, GGGI Country Representative delivering
welcome remark

The 3Returns Model and Framework

In order to assess sustainable landscape management practices
and support green growth alternatives for the local communities,
the Global Green Growth Institute has developed a 3Returns Model
and Framework for analysing different green growth forest
governance scenarios compared with continuation of current
practices, known as a “Business as Usual” (BAU) scenario. The
3Returns Framework provides a holistic approach which considers
each intervention’s benefits through natural capital, social and
human capital as well as economic/financial capital. It differs
from a Cost Benefit Analysis (CBA) as the Return on Investment
Analysis considers not only financial investment but also natural,
social and human investment. This allows measuring a Return on
Investment Ratio that considers the benefits from investment in
capitals and defines a desired intervention scenario measured as
the most efficient when compared with the Business as Usual (BAU)
scenario. It also differs from a CBA as the Return on Investment
Analysis also quantifies non-monetary benefits and capitals’
status as indicators for decision making.

The Economic Appraisal of Ayeyarwady Mangrove
used the 3Returns approach to consider four policy
intervention scenarios. A key difference between each scenario was
the percentage of land allocated between the two types of community
user groups by 2026. The two community user groups types are
Village Woodlots (VW) and Community Forest User Groups (CFUG). All
the scenarios other than BAU implement the enhanced Myanmar
Reforestation and Rehabilitation Program (MRRP).

The scenarios were the following:

1. Scenario 1, allocates 11% of
mangroves to be managed by CFUG and an annual increase in area
under VW management until 2026. The maximum community forestry
mangrove area is 35% of the Reserve Forest area.
2. Scenario 2, allocates 25% of mangrove management to VW and 25%
mangrove management to CFUG. The community forestry mangrove area
is 50% of the Reserve Forest area.
3. Scenario 3, allocates 47% of mangroves to CFUG and only 3% to
VWs. The community forestry mangrove area is 50% of the Reserve
Forest area.
4. Scenario 4, allocates 39% of mangroves to be managed VWs and 11%
to be managed by CFUGs. The community forestry mangrove area is 50%
of the Reserve Forest area.

There are important differences between these two forms of
community management. VW officially remain under the control of the
Forestry Department, but are a community managed common with a
mandate for sustainably managing logging/fuelwood production. They
are regarded as democratic in structure, giving all local people
the ability to influence decision making. An important aim of VWs
is to reduce poverty through enabling community participation for
marginalised groups.

CFUGs are less democratic in structure. They only require five
people to form a group to apply for a land permit – as a result
they have the potential to be susceptible to elite capture. CFUGs
enable groups to participate in a wider range of activities
including agriculture, aquaculture as well as logging.

CFUGs have a low rate of female participation – only 8% of
female headed households are involved. The level of female
participation in VWs is not yet know.

The results of the analysis revealed that scenarios 2,3 and 4
achieved roughly the same outcomes in terms of natural capital and
net present value. However, Scenario 4 achieved the highest social
and human capital not-monetary benefits, resulting in the
engagement of 48,618 people in community forestry and capacity
building by 2026. Furthermore, when analysing the loss of informal
jobs and livelihoods through improved resource management
scenarios, Scenario 4 shows the least reduction in jobs and
livelihoods (64,978) compared to BAU (65,008). For this reason, the
report concludes Scenario 4 is the most desirable landscape
management strategy which best takes into account natural, social
& human and economic capital benefits.

It must be noted that all scenarios are anticipated to reduce
illegal logging activity. However, the removal of this activity
will disproportionately affect poorer, landless groups who
previously relied on mangrove resources to supplement their income.
It is important that community management design incorporates these
stakeholders, incentivising them to undertake sustainable
activities with the larger landscape system.

Value Chain Interventions

In addition to analysing the impacts of forest governance
structures, the report has identified two viable value chains which
incentivise the conservation of mangroves. The two value chains are
hard-shell mud crab and dried products through the implementation
of solar dome dryers.

The hard-shell mud crab value chain provides a lucrative
opportunity to connect people of the Ayeyarwady Delta with the
markets of China. In 2016, the trade was valued at over 4 Million
Euros. Currently 90% of mud crabs are exported to China. Mature
crabs can reach over 20,000MMK/kg in local and export market. The
value chain currently consists of small-scale village catchers and
hatcheries, pond owners and farmers, and middlemen/traders who
connect the crabs to markets in Yangon and China.

The financial assessment showed that primarily the pond
owners/farmers and middlemen/traders are benefiting from the
activity. The middlemen often provide informal finance to poor
people engaged in crab catching. As part of this arrangement,
debtors are required to provide juvenile crabs at discounted rates
to the middlemen. However, the middlemen have also been found to
provide equipment and interest free loans to the small-scale
village catchers.

The middlemen gain from the higher prices associated with larger
crabs through fattening them, earning a profit.

Several actions are required to fully realise the green growth
opportunity of this value chain. Firstly, it is important that
hatcheries are developed so that the natural populations of mud
crabs are not depleted through overharvesting.

Secondly, it is important that an alternative pellet feed for
the crabs are produced. Currently ‘trash fish’, small fish with
no other practical use, are fed to the crabs. They are a cheap
source of food for crab fattening; however, ongoing use of the
resource could also have negative effects on fish stocks. Another
reason to emphases the importance of feed is the cannibalistic
nature of crabs – not feeding the crabs and relying on natural
feeding results in an increased crab mortality rate. Investing in
crab feeding enables crab farmers to operationally perform

Providing financial support to communities at the farmer
production stage of the value chain will hopefully allow them to
share in the benefits of the value chain by enabling them to grow
crabs to larger sizes and receive higher prices than what is
currently demanded by the middlemen.

An additional reason to prioritise this intervention is its
capacity to empower women. Often it is women who are in charge of
the crab ponds.

Left: Intensive hard-shell mud crab fattening; right: natural
hard-shell mud crab fattening

Dried products through the implementation of a solar dome dryer
is another intervention in the value chain which will assist in
protecting mangrove habitat. It achieves this by reducing the
amount of fuelwood which is sourced from mangroves required to dry
fish, crustaceans, and other agroforestry products. There is also
an indication that the dryer dome increases the success rate and
quality of preservation, which will be hoped to increase the price
at sale.

Dried shrimp production modelling from the report found that if
drying occurred for 180 days within a solar dryer dome, the amount
of fuelwood required would be 40% less than current drying methods.
Savings from fuelwood are reduced to 15% if the facility is
operated at its maximum capacity during the year (for 260

Solar dome dryers are estimated to have a life-span of 10 years
and are suitable for community-level or user group association
investments as they are too expensive for one person to purchase.
Through the increased efficiencies in drying and input use, the
analysis based on dried shrimp found that most communities would be
able to pay off their investment loan in less than 2 years.

Above: traditional sun-drying process of shrimp in Ayeyarwady

Workshop Insights from Policy maker

A number of interesting insights arose during discussions and
activities at the workshop. One observation made by a government
participant was the need for more co-ordination and dialogue
between government departments. There are multiple government
departments which have jurisdiction over the Ayeyarwady Delta,
often with significant overlap and conflicting policies and
procedures. A possible solution to this problem was based on a
delegate’s personal experience. They highlighted the need to
firstly locate the conservation area, then discuss with other
departments to consolidate laws and enforcement.

Another interesting insight relates to attendees’ perceptions
of different management types (e.g. BAU, MRRP, VWs, CFUG). There
was a broad understanding that BAU is untenable for mangrove
landscape restoration, especially in regards to livelihoods and
mangrove restoration. However, there was a recognition that it
provides some beneficial employment opportunities though some of
these are unsustainable or illegal.

Participants generally had positive perceptions on MRRP, CFUG
and VWs. Despite the beneficial nature of VWs in terms of
participation, conservation and job creation, the survey revealed
on average a larger preference towards MRRP and CFUG by
participants. In particular, this was displayed in the results in
the livelihood and mangrove restoration sections.

This prompts the need for further advocacy on the benefits of
inclusive and democratic institutions based off the principle of
free, prior and informed consent of local stakeholders. This
message should focus on the weakness of government management of
forest reserves (MRRP) in order to convince the government to
allocate more mangrove habitat to CFUGs and VWs for management. In
all, the workshop was a success as it progressed the green growth
agenda in the Ayeyarwady Delta.

Above: Group activity during workshop

The post 3Returns Blog
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