Developing pro-poor markets for environmental services in the ...

placed some boundary markers in the middle of ricefields, some of which are being tilled by
SBPTI members. The LLDA has further drafted development plans that will affect around 66
per cent of agricultural areas in Balian, most of whose farmers are members of the SBPTI.
Meanwhile, these farmers are using watershed water for irrigation purposes, through the
construction of man-made canals. Water from the river system is diverted from the main
canal that goes to the lake. Every six months, these farmers are required to maintain their
irrigation canals themselves. Although the identified protected areas for the water sources of
Balian do not overlap with the LLDA jurisdictional area, there is still some concern among
the SBPTI members because they consider these affected farmlands as part of their
watershed. The organisation is currently working on marking the boundaries of their
watershed and will consequently have to negotiate with LLDA on how to resolve border
conflicts.
The National Power Corporation (NPC) had expressed interest in building a dam for a hydroelectric
power plant project in the area. It was supposed to tap into some of Balian’s water
sources, and some barangays were going to be ‘flushed out’ or flooded. This did not get
approved, however, because when the residents demanded that the social-amelioration
package be based on present and future agricultural earnings of areas to be flooded, the
government decided to back out.
Another issue the LK has had to contend with is the presence of the New People’s Army
(NPA), the armed component of the Communist Party of the Philippines. The NPA has been
waging its own revolutionary struggle in the country for the past four decades. Pangil,
Laguna is one of the areas they operate in. For years, they have been trying to recruit
members from the LK to increase their membership. However, the LK refuses to make it
their policy to provide them members, and has always left it to the individual members to join
if they wish to. Because of this, the NPA has tried to sabotage the activities of the LK, and
has been convincing upland residents not to support the LK’s programmes and projects.
Fortunately, the LK has its track record to speak for itself, and so far, most upland residents
have been supportive of its activities for the watershed.
3.2.5 Potential for developing markets for watershed protection service
The events that have transpired through the years show that resource-use conflicts in the
Balian watershed have posed threats to the sustainability of the watershed. As economic
theory puts it, resource-use conflict can be minimised through the play of market forces and
pricing mechanisms. Although there is no ‘financial exchange’ to speak of yet, there is a
quasi-market existing, to the extent that landowners upstream have negotiated with the LK to
adopt improved land-management practices. In return, their land is protected from migrants
and illegal economic activities. The provision of alternative livelihood schemes has likewise
taken place through the agroforestry scheme of the LK, the economic benefits from which are
shared between the landowners and residents.
There is room for this market to develop further. If the private landowner with the spring
source decides to lease this land to the Taiwanese mineral water company, then the value of
watershed-protection services could be charged by the LK to the company, once they are
legally mandated to maintain and rehabilitate the watershed. The owner could likewise
internalise the cost in the rent, but this can be passed on to whomever is maintaining the
watershed. The LK can agree with the landowner on this issue. It is critical, though, that the
community gains formal rights to the use of water in the natural spring source. This will
strengthen their management of their water supply even if they do not own the land where the
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