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Land and Water Resources Management in the Catchment Area of Sutami and Sengguruh Dams: An Economic Optimization Approach
Abstract:
This study aimed to develop an optimization model unifying the reservoir upstream subsystem and the dam-reservoir ecological subsystem, and estimate the economic value of soil depth and water reservoir. Optimization problem solving was based on (1) discrete time formulation with finite horizon problem, (2) additive objective function, which is maximizing the present value of net social benefit from both subsystems, (3) cropping pattern as decision variable, and (4) both soil depth and reservoir storage capacity as state variables.
The shadow price of soil depth reflects the cost of soil loss. Estimation result of the solum economic value tends to decrease over time. This condition is in accordance with the study of Van Kooten* et al. (1989) on thick solum. The economic value of soil loss in catchment area is varied by (1) cropping pattern, (2) function and land slope classification, and (3) sub-sub water basin region.
The shadow price of reservoir storage capacity also reflects opportunity cost in every one cubic meter water storage. Reservoir water value or opportunity cost of water storage differs among the reservoirs. The variation is caused by the difference of price per unit of electricity product among hydropower stations and the difference of technical parameter coefficient, which is connected with the dam-reservoir ecological subsystem. Water reservoir value is relatively higher than dredging cost per unit volume.
Based on the economic value of soil depth and reservoir water estimation result, cropping pattern arrangement is an effective method of handling sedimentation. This method was used by different programs and projects with varying forms, but sedimentation was still relatively high. Because of this, institutional arrangement is needed to handle sedimentation comprehensively complete with fund management institution which is also capable of bridging water reservoir supplier in the catchment area and stakeholder at the downstream part. Sedimentation handling in the long run can be done by land tenure control as appropriate with land use system. This control needs to be written in a province ordinance complete with assertive sanction and proportional incentive.
*Van Kooten, G.C., W.P. Weisensel, and E. de Jong. 1989. "Estimating the Costs of Soil Erosion: A Reply." Canadian Journal of Agricultural Economics 37: 555-562.