LEBRARY

Michigan State
University

 

 

 

PLACE IN RETURN BOX to remove this checkout from your record.
TO AVOID FINES return on or before date due.
MAY BE RECALLED with earlier due date if requested.

 

DATE DUE DATE DUE DATE DUE

 

-m 10 51 389%

 

 

-x—%-8-£”A
Ltd I U3

 

Wm
H U3
U

A;

 

"FEB'T'U 2008

 

496’fim‘fi 1
93 2 5 o 8

 

 

 

 

 

 

 

 

 

6101 chlRC/DateDuepGS—pJS

RESOURCE ACCOUNTING FRAMEWORK FOR THE
COMMUNITY-BASED FOREST MANAGEMENT SYSTEM
OF THE PHILIPPINES: A CASE STUDY

By

Gem B. Castillo

A DISSERTATION

Submitted to
Michigan State University
in partial fulfillment of the requirements
for the degree of

DOCTOR OF PHILOSOPHY

Department of Forestry

2001

ABSTRACT

RESOURCE ACCOUNTING FRAMEWORK
FOR THE COMMUNITY-BASED FOREST MANAGEMENT SYSTEM
OF THE PHILIPPINES: A CASE STUDY

By

Gem B. Castillo

This study presents a natural resource accounting framework at the community
level that captures non-marketed components and natural resource exploitation not
captured by conventional accounts. The conceptual framework consists of a
rural/community-households' economic system, a natural resource system simulation
model, and a social accounting matrix (SAM). The empirical study was conducted in five
communities bordering the Bicol National Park in Region V, Bicol Region, in the
Philippines. Focus group discussions and face-to-face interviews of households elicited
data on consumption and production activities. The household survey sampled 20% of
households in the five communities. Empirical data consisted mostly of consumption and
production activities, transformed to monetary terms, and structured in the SAM
framework. Non-marketed outputs comprised 21.3% of total production. Forest resources
represented 27.1% of the total production. Natural resources data in the SAM became the
basis for developing the simulation model for evaluating resource sustainability. Current
wood consumption would cause natural resources depreciation by 0.07% per year while

the proposed harvest would cause depreciation by 4.21%. The developed framework

captures the rural economic system and is useful for policy evaluation and decision-
making at the local level. The natural resource accounting structure supplements the
national accounts by providing both marketed and non-marketed transactions at the
community level. The natural resource modeled in the study focused on timber. Future

study could incorporate sustainability models for other non-timber resources such as

rattan, bamboo, medicinal plants.

Copyright by
GEM B. CASTILLO
2001

To a friend I dearly love;
my thoughts of whom filled my mind as i wrote this manuscript.

ACKNOWLEDGMENTS

Dr. Larry A. Leefers, my major professor and academic adviser, for the consistent
guidance, help with personal concerns, funding, patience and careful instructions;

Dr. Jianguo Lou, for lessons in simulation and modeling and providing helpful
comments on the dissertation including the the proposal;

Dr. Karen Potter-Witter, as mentor who is willingness to provide appropriate
materials in the course of the study;

Dr. Daniel Stynes, providing help in research methods and valuable inputs into
the dissertation and proposal;

Dr. Marian S. delos Angeles, for motivation to go ahead with natural resource
accounts at the community level, facilitating and funding of the field research;

Dr. Daniel E. Keathley, for providing financial assistance for travel, and
completion of dissertation;

Dr. Richard Brandenburg, Dr. William Taylor, and the Graduate School for
providing the Dissertation Completion Fellowship;

The Thoman Fellow Program for giving me the fellowship;

Dr. Donald 1. Dickmann, for lessons on research methods and able support as
mentor while conducting work at the department as graduate research assistant;

Dr. Mike Vasievich for providing graduate assistantship funds while taking
courses;

Drs. Bruce Harker and Ernie Guiang of the Development Alternatives Inc. -

Natural Resources Management Program for funding of the field research;

vi

Field interviewers (Rommel, Gemma, F rocy, Belen, Tuks, Buddy, Orlie, and
Yolly); Officers of ENRAP (Joe Padilla et al.), NRMP (Elmer Boncares et al.), and
DENR (Yumi Quintos et al.); and barangay officials of San Pascual, Pambuhan, Tarum,
Colasi and Tible;

Rex, Vangie and John Daniel, Tito, Marita and Maya who during most difficult
times supported me wholeheartedly; Dick and Gretchen Roberts' kind and graciousness in
providing such valuable service that I could not materially repay;

The Francis family was like real family while I stayed in East Lansing, and Jana,
my dear sister in the Lord, who encouraged me to press on;

Equally encouraging was my family who, despite the distance, provided all kinds
of support and love in the pursuit of this dream;

Demetri, Marcelo, Rosanne, and Joe who helped countless times during the
writing of the manuscript; and many others who in one way or another contributed
toward the completion of this dissertation;

Most of all to my Lord Jesus Christ and God the Father to whom this work is fully
surrendered, and in the strength of His Spirit I completed this manuscript in victory.

I am truly grateful to all.

vii

TABLE OF CONTENTS

LIST OF TABLES ........................................................................................................... xi
LIST OF FIGURES ........................................................................................................ xiii
KEY TO ABBREVIATIONS ........................................................................................ xiv
CHAPTER 1 ..................................................................................................................... 1
INTRODUCTION ..................................................................................................... I
Research Problem ............................................................................................... 4
Research Objectives ............................................................................................ 7
Organization of the Dissertation .......................................................................... 8
CHAPTER 2 ................................................................................................................... l 1
LITERATURE REVIEW ......................................................................................... 11
Developing the Accounting System .................................................................. l 1

Physical vs. Monetary Accounts ....................................................................... l7
Conceptual Framework and Structure of Accounting ........................................ 20
Measurement and Valuation Methods ............................................................... 23

Choice of Valuation Techniques ....................................................................... 24

Data Collection Techniques .............................................................................. 28
Sustainability and Local Resource Accounting ................................................. 30
CHAPTER 3 ................................................................................................................... 34

CONCEPTUAL FRAMEWORK FOR NATURAL RESOURCE ACCOUNTING
AT THE COMMUNITY LEVEL ............................................................................ 34

Conceptual Framework of the Rural Economy ................................................. 35

viii

Community/Household Consumption and Production Decision Alternatives ...38

Natural Resource Accounts ............................................................................... 49
Measuring Sustainability of Natural Resources ................................................. 57
CHAPTER 4 ................................................................................................................... 6]

DATA COLLECTION, ACCOUNTING STRUCTURE, AND LINKAGES TO

RESOURCE SUSTAINABILITY ........................................................................... 61
Data Collection Processes ................................................................................. 61

Survey Process .................................................................................................. 62

The Survey Questionnaire ................................................................................. 66
Determining the Sample Size ............................................................................ 69
Developing the Social Accounting Matrix (SAM) Structure ............................ 74
Resources Sustainability and Community Well-being Interactions ................... 80
Secondary Sources of lnfonnation and Place of Study ...................................... 87
CHAPTER 5 ................................................................................................................... 89
RESULTS AND DISCUSSION ............................................................................... 89
Developing the Social Accounting Matrix ........................................................ 89

Uses of the SAM ............................................................................................. l 13
Sustainability of Natural Resources Recorded in the SAM ............................. 127
CHAPTER 6 ................................................................................................................. 137
SUMMARY, CONCLUSION AND POLICY IMPLICATIONS .......................... 137
Summary ......................................................................................................... 137
Conclusion ...................................................................................................... 144

Policy Implications ......................................................................................... 146

Limitations ...................................................................................................... 152

Recommendations for Future Studies .............................................................. 154
LITERATURE CITED ................................................................................................. 156
GLOSSARY ................................................................................................................. 166
APPENDIX A ............................................................................................................... 168
APPENDIX B ............................................................................................................... 176
APPENDIX C ............................................................................................................... 205

LIST OF TABLES

Table 1. Study site and number of participants of focus group discussions in 5
communities. ..................................................................................................... 64

Table 2. Summary of households (HH) in the five communities covered by the
Community-based Forest Management Program at the Bicol National

Park. .................................................................................................................. 72
Table 3. Expansion factor and number of households (HH) —— in parenthesis —

sampled by community and purok ..................................................................... 74
Table 4. SAM Production matrix (Sub-matrix A of the schematic diagram). .................. 96
Table 5. Destination of production outputs (Sub-matrix B of the schematic

structure). .......................................................................................................... 99
Table 6. Other destinations of outputs of production activities (Sub-matrix C, D &

E of the schematic structure) ........................................................................... 100
Table 7. Factors of production (Sub-matrix F of the schematic structure) ..................... 101

Table 8. Distribution of income from employing factors of production (Sub-
matrix G of the schematic structure). .............................................................. 103

Table 9. Remittances, transfers and subsidies to (endogenous) institutions (Sub-
matrix H, 1, J). ................................................................................................. 106

Table 10. Savings/Investment, natural capital depreciation and appreciation, and
human capital (Sub-matrix K, L, M) ............................................................... 108

Table 11. Government, Rest of the world (ROW) or imports of input and
consumption commodities (Sub-matrices N and P) ......................................... 1 11

Table 12. Government, Rest of the world (ROW) import of consumption
commodities by institutions (Sub-matrices O, Q), and totals of
expenditures. ................................................................................................... 1 1 1

Table 13. Proportion of various production activities to total production. ..................... 1 14

Table 14. Land ownership in the 20% sample and estimate for the five
communities. ................................................................................................... 1 16

Table 15. Average propensities for expenditures on consumption for five
communities .................................................................................................... 1 17

xi

Table 16. Proportion of factors of production to total production .................................. 1 19

Table 17. Summary of endogenous, ME, and exogenous, GE, multipliers. .................... 122
Table 18. Change in production distribution resulting from external intervention. ....... 133
Table 19. Stand and stock table for CPEU, Inc. ............................................................ 202
Table 20. Stand and stock table for MUFFIN, Inc ......................................................... 203
Table 21. Stand and stock table for TIBKOI, Inc. ......................................................... 204
Table 22. Summary notations for endogenous and exogenous accounts of the

SAM ................................................................................................................ 207
Table 23. Matrix of endogenous average propensities for expenditures. ....................... 208

Table 24. Matrix of MB of endogenous accounts and average propensities for

exogenous accounts ......................................................................................... 211
Table 25. Livelihood activites of households in five communities. ............................... 215
Table 26. Total value of production activities of the 5 communities. ............................ 217

Table 27. Calculation of timber price (in Pesos) and proportion of cost

components. .................................................................................................... 220
Table 28. Parameters used in simulation. ...................................................................... 223
Table 29. Simulation trials with varying area harvested and fire occurrences. .............. 225

Table 30. Simulation to determine the optimal level of harvest at varying fire
occurrences. .................................................................................................... 226

Table 31. Summary of simulation run for opening and closing of stock of timber. ....... 227

xii

LIST OF FIGURES

Figure 1. Schematic diagram of the overall framework encompassing an account
system at the community level. ......................................................................... 36

Figure 2. Structure of the community Social Accounting Matrix. ................................... 51

Figure 3. Simulation model for the stock and flow of natural resources (adopted
from Repetto et a1., 1989 and DENR, 1991 ). .................................................... 59

Figure 4. The study communities are located on the eastern side of the Bicol
National Park in the Bicol Region. .................................................................... 71

Figure 5. Components of the SAM and sources of information from survey
questionnaire. .................................................................................................... 78

Figure 6. Schematic diagram of the SAM for five communities buffering the
Bicol National Park. .......................................................................................... 91

Figure 7. Simulation of the effect of three harvest scenarios on natural resources
stock. ............................................................................................................... 130

Figure 8. Trend of Opening and Closing Stock for three harvest options, and area
disturbed. ........................................................................................................ 228

xiii

KEY TO ABBREVIATIONS

AWP - Annual Working Plan

BNP - Bicol National Park

C BF M, - Community-based forest management

CGE - Computable General Equilibrium Model

DENR - Department of Environment and Natural Resources
ENRAP - Environment and Natural Resources Accounting Project
FAO - Food and Agriculture Organization

FDES - Framework for the Development of Environmental Statistics
FGD - Focus Group Discussion

FLUP - Forest Livelihood and Utilization Plan

IRG - International Resources Group, Inc.

LSMS - Living Standards Measurement Studies

MVP - Marginal Value Product

MEB - Material/Energy Balance

MEW - Maximum Economic Welfare

N1 - National Income

NDP - Net Domestic Product

NHE - New Household Economics

NRA - Natural Resources Accounting

NRMP - Natural Resource Management Program

xiv

OECD - Organization for Economic Cooperation and Development

PNSCB - Philippine National Statistical Coordination Board

SEEA - Satellite System for Integrated Environmental and Economic Accounting
SNA - System of National Accounts

UN - United Nations

UPLB - University of the Philippines Los Bar’los

WB - World Bank

WRI - World Resources Institutte

XV

CHAPTER 1

INTRODUCTION

For several decades policy makers and economic planners have greatly relied on
aggregate economic indices such as the Gross Domestic Product and National Income as
indicators of a country's economic growth. The path to economic development has been
viewed as an increasing rate of annual growth of these indices, following the trend of
industrialized countries. Often, this path disregards effects on income distribution and
quality of life both in the present and in the future. A closer examination of these indices,
however, reveals inherent risks because the process of development depletes the
environment and natural resources rapidly, possibly beyond recovery; yet depletion is
not reflected in measures of growth. Thus, a variety of approaches have been developed
recently in order to correct this deficiency (see Lutz and E1 Serafy, 1988; Abaza, 1992;
Lutz, 1993; and Leefers and Castillo, 1998 for details of deficiency of these aggregate
measures) and to derive genuine or sustainable income or growth indices, hopefully

reflecting impacts on the environment and natural resources.

Several approaches include physical measures or information as indicators on the
state of the environment and natural resources. But interpreting voluminous physical
information with different units of measure related to economic policy making is
complex and subject to varied interpretations. A newer option is to link these physical
indicators with economic indicators that are embodied in national accounts, thus

essentially labeled the "greening of the account." This requires putting values on

resources that are traditionally not valued in the market in order to be compatible with
economic indicators. Planners are looking to revise such measures of growth as Gross
Domestic Product, National Income and Depreciation so that they include indicators of
resource sustainability (BEA, 1994). Revisions involve inclusion of depreciation or
depletion of the environment and natural resources into the system of national accounts.
Thus, the idea of "environment and natural resource accounting" was introduced as early
as 19705 in accord with the concept of sustainable development. Since then,
industrialized and developing countries have been developing concepts and methods of
environmental and natural resource accounting. The biggest effort led to the addition in
1993 of the System of Environmental and Economic Accounts (SEEA), a satellite
account instead of an integrated account, to the UN System of National Accounts (UN,
1993). SEEA is intended to be a standard for developing countries. Satellite accounts
emphasizes the need to expand the analytical uses of the SNA for selected areas of
concern such as environment and natural resources without disrupting the main function
of the conventional or central account system. It provides for inclusion of additional
information, additional concepts of valuation, cost and benefits of human economic
activities, and linkages of physical data of the environmental and natural resources to the

national accounts.

Natural resource accounts were meant to provide clues and early warnings of
exploitation of natural capital for economic production; excessive exploitation raises
concerns about sustainability (Peskin, 1993). Theys (1989) identified at least four

objectives of natural resource accounting: (1) to diagnose the current state of the

environment; (2) to analyze the effects of environmental policies on economic
performance and welfare; (3) to assess the value of resources that can be exploited for
development; and (4) to identify possible options among the social, economic, and
ecological objectives of development. Thus, these accounts provide vital information to
economists and decision-makers for identifying areas of environmental and natural

resource stress resulting from economic activities and assessing sustainability.

Still, most natural resource accounting systems developed in industrialized and
developing countries are national in scope. The approach, particularly in developing
countries, concentrated on designing accounts for specific sectors such as forestry,
mining and agriculture (including fisheries); they emphasized environmental quality
effects more than the natural resources that are inputs for economic activities. JObstl and
Hogg (1997) recognized that these trends are influenced by a variety of cultural,
historical, political, legal, and economic factors. Most accounting efforts, however,
neglected to incorporate two important components: household production (see Becker,
1965 for definition) and rural economic activities. It was reasonable previously to accept
these deficiencies, but the role of household production and consumption was increasing
(Ruddel and Rodinelli, 1983). James (1996) cited the estimate by Hawrylyshyn (1976)
that household production was typically one-third the size of GNP on average. By
factoring unmarketed household production into national accounts, the International
Resource Group et a1. (1996) argued that the forestry sector aggregate account potentially
increases by 30 percent. Thus, if household activities related to use of natural resources

was ignored, the gross domestic product (GDP) would be biased.

Research Problem

Of particular importance are economic transactions of households in rural areas
that occur outside organized markets, particularly in developing countries such as the
Philippines. For instance, household-bound goods (production outputs directly consumed
by households) are neither transacted in the market nor involve monetary transactions,
and thus are not included in the calculation of aggregate national accounts. The national
account system does not include these goods; thus, aggregate estimates of depreciation or
appreciation at the national level can only be considered partial and incomplete. Accounts
do not reflect real appreciation or depreciation of natural resources. Therefore, there is a
need to incorporate accounts from rural household economic activities. By including
these activities, national accounts can become more reflective and useful for policy and

decision-making pertaining to sustainability of natural resources.

Household production activities for own-consumption are particularly large in
communities subsisting or alternatively depending on forest resources. During the late
19805 it was estimated that 20% of the Philippine population lived in the mostly forested
highlands, commonly referred to as uplands. Subsistence activities in these upland rural
communities are more than those recorded in national accounts. Population increases
potentially increased the use of non-timber resources, notably fuelwood. Further use
increases may occur due to the government policy that delegated management of public
forests to communities adjacent to or within these forests. These communities need to

develop tools for effective management of forest resources. Decision-making at the local

level needs simple and vital sets of information that will help them come up with rational

decisions in terms of efficiency, equity and sustainability of forest resources.

Thus far, efforts to develop accounting frameworks for rural economic activities
that include natural resources exploitation are limited. Other than the long process it takes
for accounts development, support for such work is minimal due to the current national-
level emphasis. More so, natural resource accounting is a relatively new field; it became
popular only with the advent of environmentalism. Such accounting endeavors have not
been popular among many policy makers and international organizations, because they

represent a more conservative "status quo" approach to economic growth.

It is likely that the framework and structure of the accounting system at the local
level will be different from those at the national level, depending on the economic
structure at the community (Taylor and Adelman, 1996). A number of other factors may
influence development of accounts at the village level; several influencing factors that

are relevant to this study are mentioned here:

0 stakeholders’ (within and outside the community) and community preferences and
their household characteristics influence what activities and elements need to be
included in the accounts;

0 analysts' and decision-makers' degree of concern for substantive economic, ecological

and social issues may define components of accounts;

0 issues on tenure and property rights (i.e. community-based forest management),
participation in management, and decision-making process define the structure of the
accounting system;

0 governance of the common property resources complicates analysis of resource
sustainability; and

o valuation methods used in account systems limit types of non-market goods that can

be included in the accounts.

All these issues potentially influence accounting frameworks at the community or
village level. The main focus therefore is an accounting framework that will be useful for
local and national decision-making in order to assess sustainability of resources. But
linkages with the national level must be considered. At this stage the focus is on
renewable resources in forest-dependent communities, and thus on natural resources as
capital for economic production. Environmental concerns though important are beyond

the scope of this study.

Other than usefulness for local decision-making, recent international
developments on forestry emphasized the need for sustainable forest management.
Examples include developing criteria and indicators for forest sustainability and "green
certification" of forest products that aim to provide consumers with information on how
forests are being managed (Bratkovich, undated; Kiekens, 1999). Forest certification and
auditing are "emerging trends" in business transactions on products coming from natural

resources. Therefore, in order to be competitive in international trade, community forests

must initiate efforts toward sustainable management and having their forest certified.
Natural resource accounting and these other new mechanisms ensure that forests are
sustainably managed. These are notable concerns that policy makers at the national level

will need to address.

Research Objectives

In view of the above issues, two main questions are addressed in this study: Can
an accounting system be workable at the local level and at the same time provide useful
information for national level decision-making? And, can the accounts provide indicators

of sustainability of the forest management system?

Other basic questions to ask are “What needs to be measured (including values) at
the community level?" "How are these measured?" "What tools are helpful in developing
measures?" All these questions are helpful guides in conceptualizing a framework for

decision-making at all levels.

In the light of the above, the overall purpose of the research is to develop natural
resource accounting and resource valuation framework for forest-based communities in

the Philippines in order to assess resource sustainability under varying management

regimes. Included in framework development is the link of human production activities

and consumption on the stock and flow of natural resources. Specific objectives are:

(1) To develop a physical and monetary accounting framework that captures
community forest resources including those not accounted for at the national
scale (i.e., natural resource accounting),

(2) To link the accounting framework with household and community forest

production options (flows) and capital (timber) stocks (i.e., sustainability).

Organization of the Dissertation

Chapter 2, Literature Review, examines various account systems for
environmental and natural resources that relate to framework development at the
community level. The review covers how account systems and their components are
identified, the choice of physical and monetary approaches, valuation methods and
measurement. The usefulness of accounts for assessing sustainability of forest as capital

in economic production is also presented.

Chapter 3, Conceptual Framework for Natural Resource Accounting at the
Community Level, presents a conceptual natural resource accounting framework for rural
community forest management using a concept of achieving well-being of household

through satisfaction of consumption needs. The chapter includes conceptual procedures

and techniques for measuring and valuing consumption and production activities and for

assessing sustainability of natural resources.

Chapter 4, Data Collection, Analysis Methods and the Accounting Structure,
discusses the field procedure of data collection through surveys (i.e. face-to-face
interview) and focus group discussions. The chapter includes synthesis of survey data
obtained during the 1998 community survey, description of study areas, and summaries

of demographic characteristics of households.

It is important to highlight the institutional context in rural areas where the study
was conducted. Institutional context as defined by Appendini et a1. (1999) refers to
"dynamic institutional arragements which influence their access to different resources
and services which are essential for their income generating strategies." The site in which
this study was conducted was under a community-based forest management agreement
between five communities and the government. The forest that these five communities

encompass is a second growth forest that the government refers to as a "buffer forest."

Chapter 5, Results and Discussion, presents analysis of survey results, the
structure of community-level accounts, and a simulation model for assessing resource
sustainability. Major findings, strengths and weaknesses of the framework, and how this
framework can be used for local-level decision-making are included. Linkages to national

accounts are also noted.

In chapter 6, Summary, Conclusions and Policy Recommendations, several
additional issues on natural resource accounting are discussed. Among them are politics
of community forestry that affect accounting of resources, deforestation and associated
land-use changes, small-scale timber harvesting, valuation of non-market resources,
adjustment of national income for household consumption of non-market forest products,
and estimation of the value and sustainability of forest products which are consumed
directly by households. Also, policy recommendations and suggested areas of change
and refinement of the framework for future work on institutionalizing accounts system

are presented.

10

CHAPTER 2

LITERATURE REVIEW

This study develops an accounting framework applicable at the village level for
management of community forests. The previous chapter noted the importance of
household consumption and production activities in rural areas. A system of accounts for
assessing the impact of rural economic activities on natural resources, therefore, must
encompass household activities. This chapter reviews various account frameworks,
techniques of valuation and sustainability assessment, and their usefulness for developing

natural resource accounts at the community or village level.

Developing the Accounting System

The review of various accounting models developed in both industrialized and
developing countries provides direction on what system would apply to the community,
with an emphasis on household consumption and production. Criteria used in reviewing

these models include:

0 ability to capture local economic conditions (i.e., households as consumption and

production centers),

11

0 usability for evaluation, monitoring and decision-making (e.g., whether to apply
purely physical or physical with monetary accounting). and

0 simplicity of structure and distinct boundary of the accounts (i.e., whether it can be
used by local decision-makers that include households, community leaders and local

government units).

The discussion that follows explores various frameworks and structures of account
systems in the context of rural communities. This provides a foundation for designing a

relevant account system.

General Approaches to Natural Resource A ccounting

Literature abounds with conceptual frameworks that attempt to incorporate (or
capture) environmental and natural resources into the system of national accounts with
the aim of revising measures of economic growth. However, they inadequately cover
economic activities of households in rural areas. Commonly cited frameworks include the
UN System of Integrated Environmental and Economic Accounting (SEEA), Peskin's
Environment and Natural Resources Framework, Repetto's Accounting for Natural
Resources Depreciation, Nordhaus and Tobin's Maximum Economic Welfare (MEW)
framework developed for Japan, the French Patrimony Accounts, and the Framework for
Development of Environmental Statistics (FDES) (Peskin, 1993; Vincent, 1997; UN,
1993). These account systems, applied to both industrialized and developing countries

oflen include sectoral accounts such as forestry. mining, and agriculture aggregated at the

12

national scale (see example ofCosta Rica, Solorzano et al., 1991). Other accounts focus
on a landscape scale such as for watersheds and ecosystems (Xu et al., 1995; King et al.,
1995). Thus, there is a need to develop an account system for rural household economic

activities that can be included in national accounts.

Harrison (1993) looked at development of account systems in stages by
categorizing accounting approaches into stages of development. The first stage was the
accounting of environmental and natural resources based on the material-energy balance
(MEB) concept, where environmental information is expressed in physical terms using an
input-output structure. The second stage involves converting physical environmental
information into stocks and flows called natural resource accounts (NRA), which are
primarily physical but can be enhanced to include monetary accounts. The SEEA (a
satellite system for the SNA) is the model for both physical and monetary accounts.
because it contains stock and flow information. The third stage is transforming natural

resource accounts from physical to monetary terms. thus, resembling the SNA.

Usability for decision and policy making is an important factor in developing the
accounts, whether at the local or national level. The Organization for Economic
Cooperation and Development (OECD, 1995) classifies most account systems into three
levels of use: macro, sectoral, and micro levels. The macro level accounts are used
mainly to adjust and calculate alternative national accounts aggregates, in order to reflect
the depletion of natural resources and degradation of the environment to improve

aggregate measures of general welfare. The sectoral accounts focus on more narrowly

l3

defined field of application to particular environmental media and natural resources such
as forests, water or energy, obviously for central planning and management-related
purposes. The micro accounts focused more on the firm level because the pressure for
green consumerism motivates firms to conduct environmental audits and certification
(OECD, 1995). However, literature on micro-level accounting that includes
environmental and natural resources are rather rare. Other landscape-level approaches,
such as the watershed management unit or an ecosystem, are proposed obviously for

management purposes (Xu et al., 1995).

Thus, macro- and sectoral-level frameworks are more common than micro—level
or localized frameworks because of the drive to revise national aggregate measures of
growth. Peskin (1993) categorized most macro-level account frameworks into four
general approaches. First, accounting of environmental activities that are already
reflected in conventional accounts such as assembly of pollution control expenditures
(Statistics Canada, 1997) — those effects that are simply a result of all economic activities.
Second, physical accounting of environmental and natural resources activities that are
related to economic activities, such as pollution discharges by sector and stocks/flows of
natural resources. Third, accounting for depreciation of renewable and non-renewable
resources in order to adjust income estimates (e. g. NDP). Two examples of which are the
Repetto approach for 1ndonesia(Repetto et a1, 1989) and the Nordhaus-Tobin Measure of
Economic Welfare (MEW) for Japan (Perman et al., 1996). Fourth, and the most
ambitious, is a comprehensive accounting system — both physical and monetary - to

expand the coverage of the conventional accounts in order to include environmental and

14

natural resources. The French system (Peskin and Lutz, 1993), the Peskin accounting
system for the Chesapeake Bay (Grambsch et al., 1993), and the UN SEEA (UN, 1993)

are examples of this fourth approach.

Sectoral accounts such as agriculture, forestry, mining and related industries are
commonly developed in tandem with macro accounts by industrialized countries (Peskin
and Lutz, 1990; BEA, 1994; BEA, 2000; BEA, 2000 ). Developing countries such as
Indonesia, Mexico, Papua New Guinea, and the Philippines followed suit (WRI, 1991;
DENR et al., 1996; Leefers and Castillo, 1998; Vincent, 1998). These were intended to
monitor impacts of economic policies on resources, that is, to measure impacts of

environmental regulations, emissions taxes, and pollution (Atkinson et al., 1997).

A number of studies demonstrate that local environmental and natural resource
accounts incorporated into the SNA may significantly change the picture of national
accounts (Friend, 1993; Hecht and Peskin, 1993; UN, 1993). Peskin et a1. (1992)
proposed a framework to include fuelwood consumption by the household sector into the
national accounts using cases in Africa. The UN SEEA, on the other hand. proposed to
incorporate household production via a satellite system (UN, 1993). In the Philippines,
the Environmental and Natural Resource Accounting Project (ENRAP) project estimated
this sector which proved to have a significant influence on GDP (DENR, 1991).
However, community-level accounting studies that include household activities are scant
in literature, because of equally scant support for such efforts. A lone study by Saxena

and Agarwal (1997) developed accounts system for tree growers in India, but confined

15

their work in timber resources to fuelwood. The inadequacy of local-level accounting
emphasized the need to extend the coverage of national accounts to include non-market
activities in rural economies, particularly those that are household-bound (Hecht and

Peskin, 1993).

Most account developers aim for simplicity of structure. However, developing
accounts for economic transactions alone, that include non-market goods and services,
proved to be complex (Peskin, 1993; UN, 1993; Vincent, 1998) and required
considerable survey and data collection efforts. Some countries approached this
incrementally by confining assessments to a limited number of important environmental
media and natural resources (i.e., water, energy, sub-soil assets, or forests). Still these
efforts faced difficult challenges in valuation (Hecht and Peskin, 1993; OEC D, 1995;
Darmstadter, 2000). These difficulties were reasons that no natural resources, specifically
those that have no known or acceptable markets or monetary value, are integrated into the
system of national accounts. Instead they are appended as satellite accounts (UN, 1993)
or as augmented accounts mordhaus and Kokkelenberg, 1999). Satellite accounts imply
that core national income and product accounts remains to reflect mainly market
activities, but renewable and environmental resources serve as supplemental accounts to
provide materials for policy makers. Augmented accounts on the other hand imply
extending the national and income accounts to include natural resources and the

environment, but not integrated into the core accounts.

16

These challenges suggest that accounting systems at the community level should
focus incrementally first on economic-production activities, as well as the provision of
adequate information for rational decisions by community planners. Decisions regarding
exploitation of resources must be done rationally in the pursuit of sustainability, at the

local level, since current community residents are not the only stakeholders of the forest.

Atkinson et a1. (1997) suggested an alternative way of developing environmental
and natural resource accounts using the social accounting matrix (SAM) structure for
localized socioeconomic impact analysis. Its suitability for natural resource accounts lies
in its usefulness for policy analysis — being a flexible framework. Taylor and Adelman
(1996) reported work done on developing a village-level social accounting matrix that
focused on agricultural commodities. They compared the usefulness of the social
accounting matrix with the computable general equilibrium model (CGE) for defining a
village economy. Taylor and Adelman (1996) specifically recommended use of the SAM
for defining the structure of the village economy, but suggested use of CGE for defining

equilibrium conditions.

Physical vs. Monetary Accounts

Units of measure in accounts considerably affect the usefulness of accounting
information for policy analysis. Accounting approaches range from purely physical to
monetary or from purely ecological to economic, but physical accounts are basic features

of all systems. The foundational framework for these systems is the material/energy

17

balance (MEB) concept, developed in the late 19605 and early 19705 by Ayers and
Kneese (1969). The Framework for the Development of Environmental Statistics (FDES)
developed by the UN Statistical Office (Rapport and Friend, 1979; UN 1991; Friend,
1993) emphasized physical accounting as input for developing natural resource accounts.
The more complex French environmental accounting system was conceived to assess the
interaction between economic, ecological and social environments, but it was developed
from a quantitative and qualitative account of the environment (Peskin and Lutz, 1990).
Both recognized the necessity of developing an environmental information system in
physical terms before developing an economic system of accounts for the environment
and natural resources can be developed — the approach for most systems developed by

industrialized countries.

Physical accounts are necessary but not sufficient for understanding economic
relationships. To illustrate, Statistics Canada (1997) used the example of mineral
accounts where aggregating tons of gold and silver (similar to the water-diamond
paradox) would be less helpful for policy analysis purposes. The resulting aggregation
will be meaningless considering that they are valued differently (Statistics Canada, 1997).
Therefore, aggregate monetary accounting systems for environmental and natural
resources face the dual challenge of transforming diverse physical information into a
common unit of measure by assigning values to them and of remaining useful for policy

analysis.

18

Some proponents of monetary accounting suggest use of a "numeraire" by using
money value (Hueting et al., 1993). In order to accomplish this, weights and ratio to
market commodities (Statistics Canada, 1997) for environmental services are
recommended, and thus converting them to monetary accounts. However, meaningful
interpretation for policy is still the main issue. Other authors recommended that natural
resource accounting as simply physical accounting because of these conceptual and
empirical challenges (UN, 1993; Vincent, 1998). Otherwise, simple satellite accounts to
complement the monetary system of national accounts are recommended (UN, 1993).
Peskin (1998), however, proposed to integrate depreciation of the environment and
natural resource in the SNA, with a distinction made between physical and economic

depreciation.

Thus, the satellite approach came about because some experts rejected the idea of
making substantial changes in the conventional SNA (UN, 1993). The latter is used for
other types of analysis, requiring monetary valuations such as short-term monetary and
fiscal policies, that cannot be consistently done for all environmental services. The UN
SEEA became a model of physical and monetary accounts, but as a satellite system to the
SNA (UN, 1993). It was intended to describe the environmental-economic relations,
monitor environmental changes caused by economic activities, and be useful in assessing

environmental costs and benefits (Bartelmus et al., 1993).

Hence, monetary accounts including the environment and natural resources have

much room for research. Linking those physical data to monetary values are steps that

19

need to be undertaken in order to link NRA to the SNA (UN, 1991) and to be useful for
economic policy analysis and decision-making. Most international bodies recommended

the idea of localized accounting to pilot test monetary accounts (UN, 1993; Peskin,

1993).

Conceptual Framework and Structure of Accounting

The structure of the account system at the community or village level must be
useful for their needs. Theys (1994) suggested that perceived economic need influences
the structure of accounts created. Therefore, a prerequisite to developing an account
structure for the community is understanding the concept of rural well-being and its link
to natural resources via their production activities. This requires careful modeling of
community/village economic activities, specifically consumption and production as they

relate to resource exploitation.

The household is the basic unit of economic activity in rural areas that functions
as production and consumption center (Taylor and Adelman, 1996; Becker, 1965).
Becker (1965) first modeled economics of household production and consumption

activities, and became the foundation of New Home Economics (NHE).

In the rural context, household well-being is conceptualized as maximizing
consumption from production outputs from farm, natural resources exploitation, and

employment. According to Ruddel and Rodinelli (1983). production activities of most

20

households in rural areas consisted of several complementary activities, the most
common of which were small-scale farming, fishing, animal husbandry, and collecting
forest products. Households also interact with institutions outside of the village, and thus
were important factors that define the rural economy. These activities and linkages
influenced land-use (Cervigni, 1998), and thus affected the condition of natural resources

under the control of the village.

Cervigni (1998) developed a computer-based model to predict the impact of these
linkages on the stocks of secondary forests, agricultural and pasture lands in a village in
Mexico. Endogenous variables of the model — that proved to influence human alteration
of the environment —included farmers' objectives, opportunities for land use, land tenure
policies, available technology, opportunities for salaried work outside the village, and
government policies. Taylor and Adelman (1996) chose to apply the social accounting
matrix (SAM) and the computable general equilibrium (CGE) model because of these
inter-linkages among production activities and institutions within or outside the village.
Hence, the SAM fits into the community/village-level economic structure for assessing
impacts of rural policy. Framers of the UN SNA support the idea that SAM provides a
flexible framework for socioeconomic analysis (UN, 1993). Atkinson et al. (1997)
pointed out the usefulness of SAM for the linkages between the environment and the

economy.

The SAM is a type of an input-output matrix. The more common applications of

input-output matrix similar to SAM were on national level in order to assess impact of

21

certain sectors on a nation's economy (Miller and Blair, 1985). However, interests at the
regional and community level economy have increased, particularly in the Philippines
where local autonomy was emphasized. This has led to modifications of the input-output
matrix in order to reflect peculiar characteristics. One notable difference was in the
classification of account elements: in traditional input-output matrix, institutions or final
consumers are treated as exogenous, while in village SAM certain institutions are treated
as endogenous. The SAM has become a common tool useful for village economy

assessment, particularly for developing countries (Taylor and Adelman, 1996).

The components of the SAM are structured by institutions (i.e., households,
government, firms etc.), and the SAM is acknowledged to be flexible for any type of
socioeconomic assessment (UN, 1993). A SAM can incorporate renewable resources as
capital. Details on the origin and evolution of SAM can be traced to the work by Pyatt
and Round (1977). This work further evolved with application to measurement of
sustainability by Atkinson et al. (1997) and application to assessing a village economy by

Taylor and Adelman (1996).

As a companion to the SAM, balance sheets that combine yearly opening and
closing stocks of resources are recommended for renewable resources assessment
(Repetto et al., 1989; delos Angeles, 1991; Peskin, 1993; UN, 1993; UN, 1993; Atkinson
et a1, 1997; Statistics Canada, 1997). Between these two stock records are factors that
affect opening and closing stock such as harvest, damages and changes in values of

stocks. The frequency and intensity of these changes, induced by human exploitation

22

determines the opening and closing stocks of each year. This type of account presentation
and its link to consumption and production serves to evaluate the sustainability of
resources. Hartwick (1990) and Maler (1991) provided theoretical background for
evaluating the Optimal path of resource utilization for renewable and non-renewable
resources over time, while Vincent (1998) developed the theoretical particulars for forest
resources as they related to resource accounting. These theoretical discussions are the
foundations to developing physical and monetary account structure that include
consumption, production and stock and flow of resources. The next section presents

literature on measurement and valuation of accounts.

Measurement and Valuation Methods

Incorporating rural household activities into the account system requires use of a
common measure comparable with commodities already transacted in the market.
Therefore, an essential undertaking in developing accounting systems that involve natural
resources is to put all entries into the account using the same measure. Thus, one aspect
of account system development was to develop measurement and valuation methods
applicable to marketed and non-market-transacted goods; particularly those directly
consumed by households in rural settings. These two concepts, measurement and
valuation, prove to be essential and inseparable for this and other natural resources

accounting studies.

23

Ideally, under a competitive situation (assumed Pareto-efficient markets),
accounting of market transactions would suffice to reflect these natural resources
exploitation activities. However, most rural communities in developing countries are not
fully integrated into the exchange economy (Taylor and Adelman, 1996). These rural
communities are largely subsistence-agriculture-based where households directly
consume part or most of their production outputs. Thus, a considerable portion of their
production is not reflected in the market. Hence, market values for most of these
household outputs, Perman et al. (1996) pointed out, do not necessarily exist and thus

should be obtained in some other way.

It is important to emphasize that the focus of valuation is on commodities and not
on ecosystem functions of natural resources. For examples on forest ecosystem functions,
Barbier (1994) summarized a number of valuation methods. The next sections reviewed

literature on valuation techniques.

Choice of Valuation Techniques

A number of theoretical and empirical studies helped define suitable valuation
methods for non-marketed goods. Schweitzer (1991), Miller (1991), and Peskin (1992)
provided overviews of valuation concepts as they relate to accounting. Several authors
(Maler, 1992; Shaw, 1992; Barbier, 1994; Perman et al. 1996; Bann, 1998) explored

conceptual methods of valuation, and suggested methods of collecting this information.

24

Hufschmidt et a1. (1983) classified valuation techniques into three categories: (1)
use of direct market value, (2) use of market value of substitute (surrogate) or
complementary goods, and (3) use of survey techniques to elicit valuation. The first two
categories make use of the market price, while the third is based on a contingent market.
Market prices, Bann (1998) noted, tend to underestimate true economic value because
they do not account for consumer surplus. Market price also requires adjustment for any
market or policy failure to reflect opportunity cost to society; the resulting value is the
shadow price of the resource used. The third category is based on willingness-to-pay by
an economic agent, a non-market valuation approach, where a hypothetical market is

created.

The choice of which technique to use is dictated by what analysts will need. In the
context of incorporating rural economic activities into national accounts, market price is
most appropriate, because it provides methodological consistency with existing accounts.
The third category implies a total economic value composed of potential market price and
consumer surplus, which is not comparable with market values in conventional accounts.
Hence, valuation techniques applicable for this study are confined to market valuation.

Bann (1998) listed six categories of market-based valuation techniques in
literature with accompanying examples:

0 market value - market prices, efficiency prices;
0 related goods approach - barter exchange approach, direct substitute approach, and

indirect substitution approach;

25

0 cost-based evaluation - (indirect) opportunity cost approach, restoration cost,
replacement cost, relocation cost, and preventive expenditure,

0 indirect valuation techniques - travel cost method, hedonic pricing method, labor
market approach, and market value of physical effects (the latter example include
dose-response, damage functions, production function approach, human capital); and

0 benefits transfer - using data generated from a study site to estimate values in another

site.

Many published studies illustrate usage of these techniques specifically applied to
village settings. Saxena and Agrawal (1997) used market value of commodities in an
attempt to augment the financial accounts of a tree-growers' cooperative in India, and in
order to include social, economic and environmental values. The SEEA employed a
simple approach using cost data where the value of natural assets is the cost that is

necessary to keep the natural capital intact (Bartelmus et al., 1993).

Both Miller (1990) and Schweitzer (1992) favor use of indirect valuation based on
productivity change over direct methods (such as those listed above) for developing
countries. Such preferences are quite understandable because most environment and
natural resource problems in developing countries pertain to use (Vincent, Crawford and
Hoehn, 1990).

A number of studies focused on opportunity cost valuation. James (1996) used
"time used" and market price of household activity to compare the opportunity cost and

market price valuation methods for household production. For non-timber forest

26

commodities, Vincent (1998) proposed that the total value of household consumption of
non-timber forest products is proportional to the opportunity cost of labor used in
collecting these products: the wage rate times labor inputs. However, Vincent qualified
that this proportionality holds only when forest earns no rent: that is, forest access is not
restricted. Otherwise, the consumption value of timber is larger than the opportunity cost
of labor. For other components of the forest, Vincent used shadow price defined as the

value of the next best alternative use of the commodity (Vincent, 1998).

Opportunity cost (based on time-use) approaches do not necessarily apply for
valuing all commodities. In some cases, opportunity cost approach is useful for
production of goods for own consumption; such as in subsistence agriculture that has no
market transactions (Peskin, 1995; and Vincent, 1998). As an example, for non-timber
forest products, the total value of household consumption is considered proportional to
the opportunity cost of labor used in collecting these products. However, the resulting
value can only be exactly equal to the opportunity cost if the following conditions hold:
(1) rent of the forest product is zero, (2) no excess capacity in production, and (3) no
underemployment and free access to resources. If these conditions are not present the
opportunity cost will not to equal market value (Peskin, 1995). Rural economic systems,
in particular, are not characterized by these conditions. Hence, despite its shortcomings
market prices are commonly used because they are observable.

The above samples of usage of valuation techniques provided a picture of the
range of possible techniques applicable. The cost of data collection, purpose of study, and

time involved determine what can be measured and valued, as well as the choice of

27

valuation techniques. Hence, this study covers only valuation of conventional goods or
commodities using market values — for non-marketed commodities. Further, valuation
method that will apply to household consumption and production depend on market

transactions by households.

It is important to note that valuation difficulties arise for forest goods (and
services) that involve variety of uses. F uelwood is one case that has both marketed and
non-market features. F uelwood collected for household consumption in rural areas does
not go through normal market channels (Peskin et al., 1993), and does not fully substitute
as energy source; hence, its value would not be comparable to alternative marketed
sources of energy. For instance, a ton of fuelwood will not have the same value as a ton
of liquefied petroleum gas. This serves to illustrate the potential variations of

interpretation of valuation results.

Data Collection Techniques

Data collection instruments must be parsimonious, yet cover goods not transacted
in the market that require monetary measures in order to be comparable with marketed
goods. Grootaert (1982) recommended that data sources for evaluating household well-
being are standard household-level surveys that focus on measuring their welfare, while
economic activities of households are based on budget surveys (Taylor and Adelman,
I996). Ruddel and Rodinelli (1983), however, argued that surveys, though useful for

piecemeal studies, may have little value for evaluating resource systems because they do

28

not incorporate complementary household activities and functions such as those listed in
the previous section. Thus, the need for complementary survey such as focus group

discussions and interviews are implied.

The method of data collection adopted should be useful for those who will be
using the account system. Therefore the types of value that are important, what is readily
available at affordable cost, and ease of handling and analysis are important
considerations in data collection (Bann, 1998). Three useful studies adequately covered
data collection instruments helpful for this study. The Living Standard Measurement
Studies (LSMS) of the World Bank used three different levels of survey instruments to
assess welfare of households: household survey. community survey, and market survey —
where price of vendors are surveyed (Grosh and Glewwe, 1995). Grosh and Glewwe
(1995) explained component modules of these surveys. For time use data, Acharya
(1982) recommended the use of recall, observation and diary keeping, details of which
are explained in World Bank LSMS Working Paper no. 18. Finally, Taylor and Adelman
(1996) used budget surveys to estimate a village social accounting matrix where
households were asked about types of production, the uses of outputs, inputs used

whether purchased and non-purchased. and their input prices.

Therefore, the data for the study will involve household surveys and community
questionnaire in the form of focus group discussion, and secondary data on inventory of
resources. These procedures are likely to encounter a number of difficulties such as data

availability for stock of community resources, ability of respondents to recall information

29

about consumption and production activities. and precision of response depending on the
rigidity of the questionnaire. Grootaert (1982) offered a number of suggestions for
capturing data in these situations. The ideal is a compact survey that can capture the
multi-dimensional requirements (production, consumption, demographics, environmental
concerns) of the study. Dividing the survey into modules, prioritizing information needs,
making use of screening questions (Grosh and Glewwe, 1995) and reducing the size of
questionnaire by asking questions at the community level are very helpful
recommendations (Grootaert, 1982). To that end, focus group discussions are a helpful
tool for compacting household surveys, and the budget surveys format adopted by Taylor
and Adelman (1996) are particularly useful in view of developing the social account
matrix. Grosh and Glewwe (1995) described the data management procedures for survey

data. These are important considerations in design of survey and data collection.

Sustainability and Local Resource Accounting

Exploitation of natural resources is the main issue in community forestry; hence,
the question of sustainability naturally arises. Many dimensions emerged from
discussions on sustainability that have relevance in defining local resource accounting. At
the local level, the issue of what to sustain seems easy because these are normally tied to
costs and benefits of local stakeholders (Saxena and Agrawal, 1997). However. at a

higher level of decision making such as regional. national or global levels, this becomes

30

more difficult due to linkages between levels and complexity associated with broader

systems.

Toman (1999) pointed out that at present, there is no consensus about what
constituted sustainability and that such a consensus may be long in the future. Literature
on this subject alone involved voluminous discussions on sustainability or sustainable
development (Pezzey, 1992). It covered issues such as intergenerational equity and how
to deal with uncertainty of preferences. Should analysts consider a finite or an infinite
number of generations? What is the safe minimum standard? How can the level of
resiliency of environmental systems be determined? There are arguments on whether to
adopt strong or weak sustainability as related to substitutability of natural capital to man-
made capital. Some would prefer to treat sustainability as a constraint in maximizing
well-being or utility. There are also various issues on reliability of measures of
sustainability and irreversibility; questions on insufficiency of traditional economic
criteria of cost-benefit analysis, and discounting. The ultimate objective of all these

discussions is to define policy prescriptions that will promote sustainability of resources.

Pezzey (1992) believed that arriving at a mathematical solution to complex
sustainability issues is insurmountable. In order to minimize complexity of their models,
most modelers ignore environmental amenities in determining sustainable economic
growth (Pezzey, 1992). Instead, the focus is on maximizing consumption that best
sustains well-being of present and future generations (Pezzey, 1992; Beckennan, 1994).

A simple conceptual formulation presented by Pezzey (1992) maximizes U=U (C ), typical

31

of most dynamic optimization models. In the traditional economic utilitarian approach,
maximizing consumption over a time horizon subject to certain constraints sets the
optimal path of growth. This maximization over time suggests introducing a utility
discount rate, or the rate at which future utility is discounted to be comparable with the
present utility levels. Atkinson et al., (1997) suggested (based on Solow) that a constant
consumption path can be achieved by setting the discount rate equal to the marginal
product of capital. In practical terms, the marginal product of capital should be equal to
the growth rate or marginal productivity of the resource base. Those who propose a
common numeraire for better interpretation suggested translating these productivity
measures in monetary terms. Once translated, these changes in real value of assets (that

is, the change in volume times a constant price) should not be negative.

Optimal control theory proved helpful in conceptualizing sustainability of
resources. However, Pezzey (1992) argued that optimal control models that deal with
renewable and non-renewable resources have intrinsic problems, particularly those that
deal with more than two endogenous variables. Hence, most modelers resort to partial
equilibrium and deal only with a single resource or system of resource (e. g. fisheries or
forestry). The alternative to such difficulty is simulation modeling based on real data and
pre-defined functional forms. This approach takes into consideration various phenomena
and tests several assumptions, singly or even for multiple cases. Various tools applicable
for these kinds of evaluation include structural path analysis (Defoumy and Thorbecke.
1984), computable general equilibrium model (Taylor and Adelman, 1996), and process

network theory applied by Alocilja et al., (Saama et al., 1990; Alocilja, 1990) for a study

32

on dairy cattle. All three approaches need intensive modeling and data, hence, simple
simulation models that isolate the resource in question such as timber resources suffices

for this study.

In summary, this chapter surveyed literature to cover three important goals of this
study. First, the survey of accounting frameworks developed in industrialized and
developing countries suggests developing a localized and flexible framework with the
ability for incremental development. Account frameworks focused initially on household
economic transactions, but with potential to include intangible uses in the future. The
SAM should adequately capture village level economic activity and hence, be a useful
structure for localized appraisal and decision-making needs. Thus, valuation of ecosystem
services is relegated to future studies. Second, measurement and valuation of outputs of
consumption and production activities should be compatible with accounting needs
hence, the need to focus on market valuation. Valuation techniques dictate the data
collection method employed. Third, assessing sustainability of household consumption
and production activities and their impact on stock and flow of natural resources suggest
use of simulation modeling but confined or limit this modeling to a limited number of
resources. The next chapter develops the conceptual framework of local accounting

system capturing the results of this review.

33

CHAPTER 3

CONCEPTUAL FRAMEWORK FOR NATURAL RESOURCE ACCOUNTING
AT THE COMMUNITY LEVEL

The previous chapter explored literature in order to define an accounting
framework applicable at the community/village level and useful for decision-making.
This chapter develops the conceptual framework for the accounting system, as a basis for
the empirical study presented in the next chapter. Development required defining the
broader framework that covers linkages between economic agents and their impact on
natural resources. Natural resource accounting, in the structure of the social accounting
matrix (SAM), becomes the information system for these interactions. The SAM captures
the state of the economy of one period, and provides indicators of the demand for natural
resources. Two important processes covered by this broader framework are the
community/household economic activities and natural resources processes. Therefore,
two accompanying conceptual models supplement the SAM for analysts and decision-
makers: a model of household/community production decisions as affected by internal
and external interventions and a model of natural resources sustainability. Thus, the
SAM, the principal focus of this research, is only one component of a broader model that

integrates natural resources.

The first section emphasizes the need to define the economic structure and

linkages in the community/village. This economic model incorporates internal and

34

external factors affecting household/community consumption and production decisions.
The second section further discusses details of the household/community production
decisions. A simple mathematical expression defines household consumption and
production decisions, and serves as a basis for identifying elements of the accounts. The
model also captures impacts of exogenous factors/interventions on economic activities in
the community. These interventions come in the form of policy/decision options for
sustaining productivity of timber resources. The third section outlines the Social
accounting matrix that incorporates both marketed and non-marketed transactions of
households and the community. The fourth section describes the conceptual framework
for simulating timber resources stock and flow as affected by community economic
activities recorded in the SAM. All three component frameworks of the broader rural
economic framework interact dynamically over time, though the SAM is treated as static

here.

Conceptual Framework of the Rural Economy

The natural resource accounts framework development begins with an overall
understanding of rural community economics and household well-being in the context of
rural agriculture. Interactions of households, mostly through consumption and production
activities, with domestic and external factors define community/village economic
activities. Endogenous household characteristics and exogenous factors such as
institutions, government, and market forces dynamically influence consumption patterns
and production activities. Household consumption patterns and production activities in

turn affect the stock and flow of natural resources. By tracing these linkages and

35

outcomes of resources stock and flow, analysts identify various policy and decision-
making options in order to sustain natural resources productivity. Therefore, the three
major components of the overall accounting framework include (1) the SAM, the
accounting framework, that portrays the community economy, (2) a natural resource
sustainability model in the form of simulation, and (3) the community/household
production (economic) decision model. Figure 1 shows the schematic relationships of

these three components. The next sections discuss these component frameworks in turn.

 

Community/Household Consumption and Production Decision

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exogenous Factors _, Endogenous Factors
, Household Characteristics
Local Communrty " Demographics (size, composition, etc.)
and External L
. . - abor
Institutions -> -Preferences
-Assets/ Property
Government Policies "> — Agricultural land
0Land tenure — Common property (forest )
°Production levels -' — Movable assets
-Pricing/Wages
-Fiscal/Monetary _’ . T , j .
Well-being = U(Consumptron) Production/Income Altematrves
-> -Food, clothing, shelter 0 -Agricultural farm production
Market FOTCCS -Outputs of production -Forest exploitation
-> oMarket purchases -Other non-land—based livelihood

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9 i
Natural Resources Accounts (SAM)
-Marketed and non-marketed
-Consumption indicators
- Production indicators
- Natural resources indicators
—Depreciation/Appreciation
—Stock of natural resources

Natural Resources (Timber)
Sustainability Information
-Opening and closing stock I
~Harvest
-Sustainabi1ity indicators
-Policy/Decision options

 

 

 

 

 

 

Figure 1. Schematic diagram of the overall framework encompassing an account system
at the community level.

36

The C ommunity/Household Consumption and Production Decision Model
describes interactions or linkages of exogenous and endogenous factors that influence

consumption patterns and production decisions:

- Household demographics, preferences. assets or properties such as agricultural
land, housing, and movable assets influence household decisions on consumption
and production activities;

- Community institutions, market forces, and government policies either constrain
or promote consumption and production choices;

- Consumption patterns determine the intensity of production activities and vice
versa; and

- Production activities shift from subsistence agriculture to natural or forest
resources exploitation or to other livelihood activities such as wage employment

within and outside of the community.

Natural Resources Accounts, using a SAM structure, record community economic
activities at a point in time; it is a snapshot of economic activities in one year. It simply
records production output, factors of production, destination of products, and
investment/savings, in monetary terms. Sustainability of important factors of production
or capital inputs such as natural resources remains to be determined. Assessing the
sustainability of these resources requires constructing a dynamic model of natural

resources stock and flow. This is the next component in the broader framework.

37

Natural Resources (Timber) Sustainability Model/Information simulates the stock
and flow of resources as influenced by potential changes of consumption and production
decisions by households over time. Model specifications include growth characteristics,
harvest decisions (representing demand for natural resources), changes in stock and flow
of resources, and indicators of sustainability. The outcome of the simulation provides a
basis for intervention or policy options for both community decision-makers and national

policy makers. The SAM helps assess potential impacts of those choices.

Community/Household Consumption and Production Decision Alternatives

Household consumption patterns and production activities in rural areas affect the
flow and stock of natural resources. Internal characteristics and linkages with external
factors, in turn, influence these consumption and production activities. Therefore, factors
that influence household production and consumption activities directly or indirectly
define the account. Internal characteristics and external factors relevant for this study are

described below.

Internal Characteristics and Endogenous Factors

This includes household demographics, labor composition, household
consumption and production preferences, and assets/properties. Brief descriptions of each

component follow.

38

Household Demographics. Household size, age composition, level of education,
gender ratio, family structure, religious affiliations, leadership, day-to-day management,
and kinship relationships all influence the type and frequency of production activities and
household consumption levels. In periods of scarcity or abundance, these demographic
characteristics potentially influence decision-making and types of livelihood or

production activities.

Household Lzfior Composition. Rural household heads are generally unskilled
laborers besides having farming skills. Barbier and L6pez (1998) hypothesized that off-
farm or wage employment is directly proportional to size of landholding. The skill level
determines the intensity or frequency of off-farm or wage employment. The level of
education determines manpower capabilities. The male household head or husband
traditionally conducts the decision-making, earning income, and production activities in

rural households.

Household Preferences. Preferences translate to choices of production activities
and levels of consumption. Likewise, skill level and demographic characteristics

influence preferences and vice versa.

Household Assets or Properties. Inherited or acquired land generates income and
wealth for rural farmers, if it is productive (Shields et al., 1993). Without these types of
properties, households rely on small-scale income generating activities such as labor and

wage employment (domestic helper, carpenter, masonry etc). Without these

39

opportunities, rural households resort to exploitation of natural resources in fisheries or
forests. In this situation, open access or common pool resources substitute as important
secondary sources of livelihood for rural households. Ownership status affects intensity
of natural resource exploitation, and thus its stock and flow.

Therefore, household characteristics affect the stock and flow of resources
directly and indirectly via production and consumption activities. Community or village

level accounts ought to reflect these influences.

Household Well-being and Consumption

One approach to identify what goes into the SAM is to understand what
constitutes household well-being, represented by its consumption. Satisfaction of basic
food, clothing and shelter needs of households determine household well-being. These
needs are met either by own-production or by purchase of market commodities using
income from production or both. Therefore, rural households' well-being is directly or
indirectly derived from consumption of outputs in agriculture (A), forest—related natural
resources (F) and market purchases (M), simply summarized as follows:

Rural Household Economic Well-being: flC )=f(Ac, Fe, MC) (1)
Where:

C = consumption as measure of well-being which includes:

Ac = agricultural goods consumed by households
Fc = forest goods consumed by households, and

Mc = market goods purchased and consumed by households.

40

Conceptually, conventional accounts reflect mostly the Mc component of
household consumption plus hired labor and purchase of capital inputs, but ignore direct
household consumption. This complete market orientation assumes that all food, clothing
and shelter needs are marketed. It further assumes that market expenditures are
equivalent to money income from production activities (that include natural resources
exploitation). Equation (2) represents a mathematical expression of well-being

formulated as market expenditures (Appendix A] presents more details):

Market Expenditures: XPMiMc. = ZPAAAS) + ZPF;(FS) +21. - (wL + PKK + c) (2)
where:

2PMiMc, = total market purchases/expenditures of households, where PM, = market

price of purchased commodity i, and MC; refers to market commodity i
purchased for consumption needs;

EPA,(AS) = money income from sale of agricultural (A) commodity i where it is
assumed that total agriculture output A = As, all output are marketed; PA,
is the market price of agricultural commodity i and subscripts means sold
or marketed;

ZPF,(FS) = money income from sale of forest commodity i where it is assumed that
total forest exploitation output F = F,, all outputs marketed; Pp, is market
price of forest commodity i and subscripts means sold or marketed;

XI, = total income from other production activities i;

41

ZPA,(AS) + XPMFS) +21; = total income of household from production activities,
reflected in the market;

wL + PKK + c = total expenditures of household, where w, PK, and c are wage rates of
L, price of capital input K, and other costs of production activities,
respectively.

Since, Market Expenditures = Net Household Income, then

XPrvrrMcr + (WL + PKK + C) = XPAIMS) + ZPFKFS) +le (3)

An Mc equal to zero in Equation (2) and (3) implies that all production outputs are
diverted to household consumption to meet essential consumption needs (In an economic
sense, the opportunity cost of selling production output is greater than direct
consumption). However, in most cases. Mc will not be zero because household
production income must provide for essential expenses such as education, import of
inputs and commodities from outside the community, and related needs available only at
the market. Therefore, household consumption (representing well-being) includes both
own-produced and market-purchased commodities. In this case the value of Equation ( l)
is greater than Equation (2)

fIC )=f(Ac, Fe, Me) > ZPMiMci (4)
because some production outputs are directly consumed by households that do not enter
the market. The right-hand-side of Equation (4) represents money income of households
net of directly consumed production outputs, while the left-hand side includes market-

purchased commodities and production outputs consumed by a household — hence, the

42

inequality. Therefore, the accounting system that assesses well-being should incorporate

both marketed and non-marketed components of consumption.

The mathematical models above assume that:

0 households satisfy welfare needs by substituting some market commodities
with own produce, hence, there are commodities that do not enter the market;

0 households have two major sources of livelihood: agriculture and forest
exploitation, and may shift to other types of livelihood such as
wages/employment in the event that those two are not sufficient or
constrained; and

o households augment income from agriculture and forest exploitation with

other non-land-based livelihood activities;

Elements of the accounts are guided by these formulations (Equations 1 to 4). The
household-expenditure function reveals consumption needs linked to outputs of
production activities. In rural communities, households resort to various production
activities at different times, as influenced by endogenous and exogenous factors. The next

section shows simple models of these production activities.

Household Production

The household is the consumption as well as production center. These households

own and lease agricultural land from landowners, and seasonally gain livelihood from

43

fishery and other non-land-based activities; otherwise, they exploit natural resources in

the forest. These alternative opportunities promote shifts of production activities

depending on the constraints. benefits, and costs involved. A number of factors influence

the choice and intensity of any production activity:

consumption needs;

demographic characteristics (e. g., household size);

income opportunities from outside, translated as opportunity cost of production;
external factors such as market forces, government policies on land tenure,
institutions within and from outside that affect the community;

pressures from other groups outside the community (e.g., environmentalists.
political groups, local governing authorities); and

weather conditions and potential natural risks.

At some times in household production, more effort goes to agriculture and at

other times to the forest. If the opportunity cost of production in agriculture is high, a

household will intensify production from the forest; otherwise, time will be devoted to

non-land-based production activities. Equation (3) show Agricultural (A), Forest (F) and

Other Livelihood (1) production options of households that show components for

recording in the SAM:

A, or F; or I, =/(L, K) (5)

44

Where i refers to a particular commodity production, and the factors of production that
enters the SAM are:

L = LH + LFa

K = AK + FK + MK

LH = LA+ LF + L.
And

AK = AA +AF + A.

FK = F A +FF + F,

MK = MA +MF + M

LH = summarizes hired labor employed in agricultural production, LA, or hired labor for
forest exploitation, LF; and hired labor for other livelihood activities, Ll. If LH is
zero, L is simply family labor, Lpa; not all labor types are employed in one
production activity;

Lpa = family labor employed in all production activities, not accounted in conventional
accounts;

K = total capital inputs coming from agriculture, AK, forest exploitation, FK, and
purchased from the market, MK;

AK = capital used in production may include AA, AF, AL or part of agricultural production
output used as capital for agricultural production, forest exploitation, and for other
livelihood, respectively;

FK = capital used in production may include F A, F p, FL or part of forest exploitation
output used as capital for agricultural production, forest exploitation, and for other

livelihood, respectively; and

45

MK = capital inputs purchased from the market, used for agriculture (MA). forest

exploitation (Mr). and other livelihood (Mr). considered imports to the community.

Equation (5) implies that factors of production employed by households are
common factors, movable from one livelihood opportunity to the other. In the absence of
empirical evidence, equations for L and K are suggested to be linear or portraying perfect
substitutability between hired and family labor, and between capital for agriculture,
forest, and other livelihoods, respectively. These kinds of relationships promote shifting
of production activities. This relationship further emphasizes its relevance in valuation of

production components that do not enter the market.

Not all outputs in agriculture (A) or forest exploitation (F) or other livelihood (I)
are marketed; a portion is directly consumed by the household or reinvested as capital

inputs. Production outputs are distributed as follows:

A = As + Ac + AK (6)

F = Fs + Fc + FK

I = 1s + 1c + 1K
Where, in all the expressions (Equation 6) above, the subscripts, c, K refer to marketed
(sold), household-bound, and reinvested as capital input, respectively. The last two output
destinations may not involve monetary transactions, but are needed to reflect household

activities in economic accounts. Appendix A.2 provides simple measures of natural

46

resources in consumption and production, useful for comparing conventional accounts

and the SAM developed in this study.

Finally, certain production constraints (or opportunities) force households to shift
from one production activity to another. Appendix A.3 presents a simple mathematical
relationship describing household decisions to shift from one production activity to
another. The shifting and frequency of production create uncertainty on the outcome of
resources, most especially open access or common pool resources such as forests, where
exploitation can be uncontrolled. An accounting of natural resources exploitation that
considers these shifts can aid decisions in terms of sustainability of consumption and

production.

Consumption and production activities are endogenous factors that are affected by
internal and external factors. These external factors influencing consumption and

production decision are discussed next.

External (Exogenous) Factors

Exogenous factors either constrain or increase consumption and production
activities. These external factors become instruments in regulating resource exploitation,
and hence, useful (tools) for sustainability objectives. These include local institutions.

government, and market forces.

47

Locgl Community a_nd External Institutions. Property and tenurial relations,
common property management, socio-cultural affiliations, political institutions, labor
exchange arrangements and production relations influence income generating strategies

and thus, level of activity in farms, forests or other livelihood (Appendini et al., 1999).

Government (Policies). Policies on land tenure and ownership, access to forest
resources, regulation of production levels, rural credit, and landholding in rural

communities directly and indirectly influence household activities.

Market forces (Rest of the World). Prices of consumer goods and production
outputs, market wage rates, and input prices generally influence decision-making in terms

of consumption and production activities. and value of natural resources.

In situations where consumption/exploitation of natural resources, particularly
timber, is not sustainable, decision- and policy-makers use these exogenous factors to
regulate or promote natural resources exploitation. Impacts of such intervention on the
rural economy is recorded in the SAM, and further analyzed through multiplier analysis.
Discussion on this extension of matrix component (multiplier analysis) is set aside for a
later discussion. Hence, the SAM is necessary but not a sufficient instrument for

assessing long-term rural well-being.

48

Natural Resource Accounts

Natural resource accounts provide appraisal and evaluation functions, and
management decision-making functions. They are primarily useful at the local level, and
as input for policy-making at the broader scale (i.e., regional and national levels). The
appraisal and evaluation functions require those important variables, such as consumption
and production accounts that affect the stock and flow of resources enter the account
system. Thus, accounts must include how much of production outputs are marketed,
directly consumed, and reinvested in own production. The account structure must clearly
reflect these important variables.

The World Bank framework on social accounting matrix, or SAM (Pyatt and
Round, 1985), closely captures the dynamics of these rural household activities, and
aggregates accounts at the community level. The standard structure of a SAM includes
production activities, factors of production (represented by L and K), institutions
[represented by household and community expenditures on Me, capital formation and

human capital (representing capital)], and the rest of the world.

SAM Components Derived from Consumption and Production Functions

The number of account components depends on the purpose of SAM construction.
Most socioeconomic studies attempt to evaluate distribution of benefits over categories of
households, and in this study, on land ownership. An extension covered by this study

evaluates the impact on natural resources. Figure 2 summarizes the model structure of the

49

SAM at the community level. The rows of the SAM contain receipt accounts of

community production activities, factors of production, institutions, capital accounts, and

the rest of the world. The column elements represent expenditures made by these

accounts. The intersection of each row and column (sub-matrix) represents a

"transaction" account, implying receipts or expenditures. Empty sub-matrices can mean

two things: either there are no relevant transactions at the community level or there were

no transactions recordable. The numbers in parentheses represent row and column (r, c)

for labeling transactions. Transactions are described starting from the upper leftmost to

the right and moving downward.

1.

2.

Production activities (1,1). At the village level, this consists of agricultural farming
(A), forest exploitation (F), and other livelihood activities (I) that may include
fishery, retail stores and others. Institutions purchase or directly consume outputs of
production (Ac, As; Fc, F5; 1c, 1,), recorded as transactions (1,3). Part of production
goes to savings/investment [AK, FK, transactions (1,4)], whether it is man-made (m)
or natural (n). The rest of outputs are exported (1,5). This sub-matrix ("transaction")
also records inter-activity demand for outputs. However, in the case of the
community/household, most production outputs are sold or exported outside of the
village (1,5). Hence, only a few activities have input-output interactions.

firetors of production - accounts for family labor, hired labor, and capital used in
production activity [f(L,K)]. Transactions (2,1), the intersection of Factors of
Production Accounts and Production Activities, summarize payments to capital or
capital value-added, and labor or labor value-added. Capital accounts include

tangible and produced capital (man-made and natural).

50

#:qu wcscsooo< 38m £56.50 05 he 220.com .N oSmE

 

ask a
a_eaaéoo

V0

2.63 05 .3 sex m
.8350 58::
:o_8_=E=uu<
:o_u~_uo._gn<
cos—aficion—
.356
825.850
3.5380
mac—0:030... 9.085.—
mflosomg; BEoéwEm
20:552—
.8532
038-52
3:30
.33 3::
.33 2.5:
cocoavoi .«o 22%..—
Same
“5920?; .550
:80:
box»...—
.§E>o_aEm own?
5.5.834". 395“—
main: :3
3233‘ concave.“— ~

9

n
ndraaau

N

 

 

 

 

263 13:30 2053:?— =ozu=v2m 82>30<
2: he «may. . . he £28m concave...—
o m w n N —

8.9% 22am
851$ E5252 Sauocum<

 

 

 

 

 

 

 

 

 

8:51:35—

 

51

 

3.

Institutions - includes households as recipients of income from employing factors of

production (2,1 ). From the mathematical model, transactions (3,2) records de and
rK, where w refers to domestic wage rate and r refers to value of capital. Other than
receipts from employing factors of production, institutions receive remittances from
external wage employment (wa), recorded in (3,5). Transfer payments/subsidies
from government (3,3) adds to household receipts. Government taxes may provide
subsidies for local production (3,1).

On the expenditure side, this major account also records household purchase
of production outputs or expenditures on locally produced market goods (1,3);
household tax payments to government (3,2) and imports (5,3) of consumption

goods.

Insertion of direct use by household of own-production is one notable
extension of the SAM for this major component. Thus, transaction (1,3) includes
households as destinations of production outputs. Chapter 5 provides further

explanations on this insertion.

Institutions' factor income, receipt from remittances, and transfers or
subsidies are allocated among consumption expenditures or demand for commodities
( 1,3), savings, and contribution to community cooperatives (4,3). Household savings
(4,3) are further allocated to physical capital investment or human capital

enhancement (4,4).

52

4.

gm! - On the receipt side, this account records investment/savings (AK, FK),
recorded as transaction (1,4). On the expenditure side, this account records
depreciation and accumulation of both man-made and natural capital, labeled as
transaction (4,4). Human capital, normally an independent account in other SAMs, is
under this major category of capital. This major account also records expenditures
on enhancement of human capital (i.e., manpower skill development), useful for

evaluating manpower potentials of the community;

Imputed value for the use of natural resources also appears as factor of
production (in 4,1). Hence, inclusion of the natural resource accounts revises the
standard SAM. Capital and other inputs purchased from outside are reflected as

"Purchase of imported input" (5.1) from the Rest of the World.

Rest of the world (ROW) - includes purchase of imported inputs (MK) for production
activities (5,1) and expenditures on market commodities (MC) for consumption (5.3);

and

Receipts and Expenditure accounts must balance hence, the SAM is a square matrix.
Each row total should equal corresponding column totals. However, in practical
situations, they do not balance so that a Deficit/Surplus account is included. Thus.

Deficit/Surplus and Totals are simply balancing accounts.

53

Therefore, this study introduces three innovations to the conventional SAM. First,
SAM, traditionally used at the national (macro) scale, is applied to a rural community
setting. Second, in principle, the community SAM in this study includes accounts of
natural resources stocks and flows. Depreciation and depletion of natural capital becomes
a novel entry into the SAM. not traditionally included in most SAM structure found in
literature. This account provides indicators for community decision-makers on the status
of natural resources when compared to investment in capital resources, and natural
resources accumulation. Third, inclusion of direct household consumption of production
outputs not traditionally included in conventional SAM. Hence, the overall structure and
components of the SAM resembles conventional SAM, with modifications as described.
However, the structure of the production sector is not the same with conventional or
industry-type input-output matrix. In industry-type input output, government and
business are distinct production activities. In this study, these accounts were treated as
part of household production activities hence, the SAM creates a different form of

aggregation.

Estimation of SAM entries, whether marketed or non-marketed, requires common

measures and valuation, which is the focus of the next section.

Measurement, Valuation and Aggregation to the SAM

This study assumes that consumption needs and market transactions guide

households in applying measures and values. That is, household decisions to directly

54

consume or market production outputs depend on money income needs. From an
analyst's perspective, this implies a balanced budget. In principle, aggregated household
expenditures should equal aggregated total receipts, mirroring the structure in the SAM.
At the household level, the balanced budget or income-expenditure identity equation ( a
possible measure of well-being) will be:
RH,- = EH]- (i.e., Receipts of Household j = Expenditures of Household j)
or
XPN(A,+AC+AK) +ZP1.‘.(FS+FC+FK) +221, = w(LA+L1:+L[) +PKK + c + 2PM.MC, (6)
Therefore,
EPA,(A,) = total value of agriculture production. marketed and non-marketed
ZPF,(F.) = total value of forest exploitation, , marketed and non-marketed
EPA,(A, -Ac-AK) = EPA,(A,), is the value of marketed component of agricultural
production, equal to net income from agricultural production,
ZPF,(F.-Fc-FK) = ZPF,(FS), is the value of marketed component of forest
production, or net income from forest exploitation.
Hence, non-market-transacted components:

EPA,(AC+AK) = non-market-transacted component of agricultural production, and

ZPF,(FC+FK) = non-market-transacted component of forest exploitation.

These formulations suggest a basis for valuation of non-marketed components of
household consumption and use of natural capital. Equation (6) clearly, delineates non-
marketed components that do no appear in conventional accounts. In a later chapter, these

are calculated in order to measure proportions that are not reflected in conventional

55

national accounts. Specifically, percentages of natural capital depreciation and non-
marketed components are computed. Subscripts c and K represent outputs directly

consumed, and used as capital inputs for production activities, respectively.

Thus, measurement and valuation depends on the consumption or production
commodity in question. Measurement follows the mode of measurement and market
transactions by households, and valuation is principally market-based. Appendix A4 lists
other valuation methods applied to forest resources.

Likewise, valuation of the non-marketed component will depend on the
commodity and mode of transaction. Based on the expressions above, market transactions
become the basis for measurement and valuation of production outputs, whether for

household consumption or reinvested in production.

Physical outputs of all production activities are valued at market price P...- [where:
x = agriculture (A) or forest (F) output]. Hence, the total of household income and
expenditures represents aggregated income and expenditures by the community or

village, representing the grand total of Receipts and Expenditures in the SAM:

.V
2RH,=

I=|

EH, for allj = 1,..., N

.v
i=1

Where:
RH,~ = receipts of household j from production activities
EH,- = expenditures of household j for all its production activities

N = total number of households in the community

56

The aggregation to the SAM follows the above formulation where receipts of all
households are aggregated for the whole community. To conform to the SAM structure,
the sum of production activities and factors of production of households become the basis
for aggregation to the whole community. The aggregation in the SAM in turn becomes
the input for aggregation at the regional or national level. Thus, the structure and

valuation provide possible linkage to national accounts.

In the process of construction of the SAM, the natural resources component of
consumption and production activities were measured and valued. The next step in the
framework development is to arrive at a model for assessing sustainability of natural
resources consumption recorded in the SAM. The next section covers this component of

framework development.

Measuring Sustainability of Natural Resources

The demand for natural resources by households and the community directly
translates to levels of harvest or exploitation. Levels of harvest that exceed the growth
rate potentially reduce the stock for future production, and the converse occurs with
below-growth-rate harvest, and dominant product sustainability (Gale and Cordray, 1991)
implies that harvest should not exceed growth considering other factors constant. Natural
growth, harvest levels, and damages translate to physical depreciation or appreciation of
resources over time. The SAM provides information at a point in time - one year.

Information on stock and flow recorded and projected over time provides information on

57

sustainability of natural resources. A series of SAM models for several periods for the
same region would provide a trend of natural resources exploitation. For planning
purposes, analysts make projections in order to predict effects of varying levels of
exploitation. Most literature suggests the idea of determining a steady state - using
mathematical optimal control theory — of resource exploitation over time in order to
assess sustainability (Pezzey, 1992). The general idea is to assume that households
behave to maximize their welfare (consumption) in each period. Natural resources capital
is introduced as constraint in the maximization function. The optimal decision criterion
for sustainability of resources is that the resource extraction at each period t, such that the
stock of resources is non-declining over the planning horizon. However, this approach is
conceptual.

Simulation modeling provides an alternative tool for assessing sustainability. Its
advantage lies in the use of empirical data obtained from inventories and surveys. The
SAM provides the initial values to the simulation model. In order to conduct simulation,
natural resources stock and flow and human exploitation are modeled in a dynamic
fashion. Figure 3 summarizes a simulation model for assessing natural resources stock
and flow.

The model starts with a beginning or opening stock of resources, timber in this
study, and ends with a record of closing stock at year's end. Additions to opening stock
come from natural growth of timber (from both existing stand and new growths) and
forest expansion (through reforestation or afforestation). Reductions come from harvests
(obtained from household/community demand), natural stand mortality and other natural

occurrences including forest fire. The closing stock for the year becomes opening stock

58

of the next year. Additions less reductions produce net changes in stock. The net-change-
in-stock records the depreciation or appreciation of the resource. Balance of addition and
reduction over the years translate to sustainability of the resource base. A negative net-
change-in-stock implies over-exploitation. In this latter case, policy or decision options
suggest reduced consumption of natural resources, a shift of production activity to non-
natural resource-based livelihood, import of natural-resource-based consumption output,

price intervention, or government regulation (see Figure l).

 

NAT RAL E IR E A NT N T R
Year 1 Year 2 ...Year 3
Opening Stock _—> Opening Stock —_* Opening Stock
Plus
Same Items as Same Items as
Y 1 Y -1
Additions ear car It
Net Change in = (”OM/7
Stock Plantation Development

Less Reductions
Harvest .
Harvest Wastes

Stand Mortality (natural
E ual damage and tire)

 

 

 

 

Closing Stock Closing Stock Closing Stock

 

 

 

6
Figure 3. Simulation model for the stock and flow of natural resources (adopted from
Repetto et al., 1989 and DENR, 1991).

In summary, this chapter lays the foundation for the empirical study by

developing a conceptual framework for various aspects of account development at the

59

community level. The economic transactions of households at the community level
become the basis for defining elements of the accounts. The accounts structured in the
SAM format capture economic activities at the household level, whether marketed or
non-marketed. Each account element is measured and valued based on household
transactions in the market. The natural resource simulation model provides the link for
assessing the impact of internal and external factors on the sustainability of natural

resources over time.

Chapter 4 provides a procedure for constructing the SAM and multipliers helpful
for analyzing impacts of exogenous (external) changes on household consumption and
production and resource sustainability. The chapter also describes details of the data
collection procedure that includes survey tools at the household and community level, in
order to construct the SAM for this study. Chapter 5 present results of analysis and

describes the simulation procedure to evaluate sustainability of community resources.

60

CHAPTER 4

DATA COLLECTION. ACCOUNTING STRUCTURE. AND LINKAGES TO
RESOURCE SUSTAINABILITY

The previous chapter laid out the conceptual framework, the conceptual structure
of the accounting system using the SAM, and the multi-period forest simulation model
along with associated linkages. These served as a guide in the empirical study and data
collection procedures described in this chapter. Further, data collection required
significant effort due to interactions with members of the community, including local
leaders and governing bodies, and this required multiple extended visits to different sites.
Data accuracy and precision required checking and counter-checking for consistency that
reflects the reality of a community. Surveys and interviews effectively generate
information on consumption, production, and market activities of households, while
focus group discussions generate a knowledge base on community institutions and
external influential factors. Resource inventory is the other source of data needed to
generate the stock and flow accounts of natural resources. The next section describes

these data collection and measurement processes.

Data Collection Processes

The source of data for natural resource accounts using the SAM framework at the
community level is of first importance. The basic unit for collecting data, discussed in

Chapter 3, was the household, the final demand or consumption point and production

61

center. Building the SAM from household data to aggregate at the community level
required surveying households' demographic characteristics, consumption patterns and
production activities, and developing a knowledge base of community level institutions
and external influences (e.g. market and government policies). The data collection

process was a crucial component in account development.

Survey Process

The process of survey/interview involved three stages. The first stage,
Community Familiarization, required interaction with community residents, local leaders,
and governing organizations. The second stage, Focus Group Discussions (FGD),
covered assessment of the economic structure and institutions in order to develop a
knowledge base of economic and other production activities. The F GD was the venue for
explaining the intent of the survey/ interview and for creating an initial knowledge base
on the community's economic structure and institutions. The third stage, Household
Survey-Interview, involved interviews of sample households to obtain data on
demographic characteristics, consumption, and production. The first stage involved
simple and informal consultations and interactions with community residents. The next

sections discuss details of the last two stages.

Focus Group Discussion or Survey. The process of determining what could and
what could not be included in the household interviews required preliminary discussions

and consultations with the community leaders through FGD. The group discussion

62

focused on understanding household consumption patterns, production activities, and

household purchases (or expenditures). Therefore, a flexible structure of discussion was

employed to appear less formal and varied for the five study communities. However, the

group discussion centered on the following concerns of the study:

On development of natural resource accounts: Draw feedback on the
significance of simplified and community-based natural resource accounts;
On conduct of household interviews: Solicit suggestions on the
appropriateness and precision of draft questions pertaining to demographics,
expenditure and consumption patterns. production activities. and marketing
activities;

On measurement and valuation of resources: Solicit infomration on more
common products, both in agriculture and forests, sold or consumed, their
units of measures, valuation methods employed, and periods of work and
leisure; and

On external influences: Draw out infonnation on market, institutional and

government policy influences on household and community activities.

Based on this four-point focus, the FGD involved a few steps:

Initial community consultation and introduction of the research,
Solicitation and screening of focus group participants,

Scheduling of group discussion,

63

0 Actual F GD, and

0 Synthesis of discussion.

Other than meals and transportation expenses during meetings, no incentives were
provided to focus group discussion and survey participants. Recommended participants
to the FGD include community and people's organization officers. Table 1 shows the

venue and number of participants in the FGD.

Table 1. Study site and number of participants of focus group discussions in 5

 

 

 

 

communities.
Focus Group Venue Number of Participants
San Pascual San Pascual, Basud, Camarines Norte 12
Mercedes Colasi, Mercedes, Camarines Norte 8
Tible Tible, Sipocot, C amarines Sur 6

 

 

 

 

 

Comments on the interview questionnaire by F GD participants comprised the
final stage of its technical revision. Discussions also included issues on appropriateness
and structuring of questions so that they were not offensive or too technical for rural
households. Auxiliary activities such as obtaining price levels and standard units of
measures used in transactions within and outside the village were conducted toward the

end of the survey process.

Household Survey. The household survey or interviews followed from the F GD.
Considering the literacy level, a face-to-face interview was deemed more appropriate for
rural households over other forms of survey. Interviewers were recruited who were well

acquainted with the questionnaire and the rural community (or at least familiar with the

64

route of the survey). All interviewers were technical personnel of the Department of

Environment and Natural Resources based in C amarines Norte and C amarines Sur. Some

important considerations in household surveys are:

Orient and train interviewers on how to handle and present the questionnaire
so that it is not offensive to respondents, yet obtain the desired precision of
answers;

Focus the interview on residents and dependents of the household (family
members independent of the household are not covered) to avoid
underestimating or overestimating consumption and production information
for the household;

List of replacement (substitute) respondents must be handy for interviewers in
case of unavailability of chosen sample respondent;

A household respondent must be familiar with the consumption and
production information, and this may not necessarily be the household head;
Although an appointment time is not critical in rural households, advance
notice of interview schedule must be passed on so that intended respondents
are available; and

Permission and cooperation of local leaders must be obtained before

interviews can proceed.

65

The Survey Questionnaire

The synthesized outputs of focus group discussions were incorporated into the
final survey questionnaire. The questionnaire consisted of four sections: consumption and
household assets, production or livelihood activities, environmental awareness and
leisure time, and household demographics. A number of steps were undertaken in order

to develop the survey questionnaire:

0 After review by the dissertation guidance committee, the questionnaire was
presented to a group of technical personnel who had previous experience in
questionnaire-based surveys;

o The questionnaire was introduced during focus group discussions as a
screening process to determine the usefulness of each question;

0 Questions were subsequently revised to focus only on consumption and
livelihood or production activities;

0 To test the duration of the questionnaire, a resident of a forest community
inside the University of the Philippines Los Bar’ios Forest Reserve was
interviewed, and flaws in Filipino language were corrected in the process; and

o The questionnaire was pre-tested by five randomly selected members of each
of the five communities in the study area. All pre-test respondents were
excluded from the final household respondents. The final questionnaire

incorporated modifications suggested by interviewers after the pre-testing.

66

The next sections provide brief descriptions of each questionnaire section. The
final questionnaire (English Version) is in Appendix B. 1. The actual questionnaire in the
local language (Tagalog) consisted of 45 questions, a total of 25 pages and averages I to
1-1/2 hours of interview time. Some of the questions are "check/verification questions"
that aid respondents in recalling consumption and expenditures over the preceding one

year. These questions were useful in the process of data consolidation.

a. Household Consumption Questions

The basic needs (or consumption) component, was classified a priori into
food, clothing, and shelter, and focused on dissecting a household's daily subsistence
and other regular needs. This detailed approach obtained information on components
of consumption activities that draw directly or indirectly from natural (forest)
resources. The implicit proposition underlying this approach was that consumption by
rural households was predominantly composed of non-traded goods that were not
reflected in traditional national income accounts, thereby underestimating capital

consumption, or depreciation.

b. Household Assets Questions

These questions elicited information on produced or non-produced (natural)

household assets whether purchased from traditional markets or produced by

households without passing through market channels. This complemented the actual

67

physical inventory or resource assessment that was conducted by community
residents, and identified the destinations of outputs from various production activities.
There was also an emphasis on getting data on expenditures for these assets. for

purposes of determining total wealth.

0. Production Activities Questions

Livelihood or production activities consisted of two major types, agriculture
and forestry, and other minor, non-land-based activities. Questions for eliciting
information on these income-generating activities (agriculture, forestry, and other
minor income-generating activities) were asked separately. From the point of view of

the study, the intent was to describe the various patterns of production activities.

Questions on production activities included quantity of outputs, their prices,
costs and returns, destination, and whether or not these are forest resources. Ancillary
income generating activities (other than minor-income generating activities) which
were assumed to cover for insufficiency of other livelihood sources were treated as

the fourth "livelihood" activity.

d. Leisure and Environmental Awareness Questions
The questionnaire included three questions on health and sanitation to briefly
evaluate household awareness of global environmental concerns such as water

pollution and carbon dioxide emissions from forests.

68

Types of leisure and hours spent were included to determine number hours of

work by households.

e. DemographiC/Socio-economic Characteristics Questions

A table matrix summarized demographic and socio-economic questions for
the household (See Appendix Table 8.1 p 25). The table matrix included number of
household occupants, family head, spouse, dependent children and extended family
members and their age, sex, civil status, education, employment, and average monthly

income.

Determining the Sample Size

Communities adjoining the Bicol National Park have a total land area of 5,201
hectares (Figure 5). The study area covered a cluster of 5 out of 10 communities

surrounding the Bicol National Park. These five communities, all on the eastern side of

the Park are:
Province Municipality Communig Peoples' Organization
Camarines Norte Basud 1.San Pascual CPEU, Inc.
Mercedes 2. Pambuahn MUFFIN
3. Tarum
4. Colasi
Camarines Sur Sipocot 5. Tible TIBKOI

69

Located in Region 5, Bicol Region, of the Philippines, all five communities were
treated as an integrated community—based forest management project. Contracted to three
different People's Organizations (POs) by the C ommunity-based Forest Management
(C BFM) Program coordinators, the project is treated administratively as one
organization. Thus, in the context of the Bicol National Park all five were treated as a
"super-community." Likewise in this study, the five communities were treated as one;
hence, a single SAM was developed. Based on community Chieftain records in 1998, the
five communities consist of 1,493 households, and an estimated population of 9,430.
Table 2 summarized total households by community, total population and land area of the

five communities, including sample size for each community.

Households in these five communities shift activities from agriculture, forestry to
fisheries. Households in interior communities such as San Pascual and Tible are
predominantly coconut, rice and root crops farmers while coastal communities such as
Pambuhan, Tarum and Colasi also diversify to fishing. Most of these activities are
seasonal so that households resort to other livelihood activities such as carpentry,
masonry, retail trading, and other artisanal activities such as broom-making and basket
weaving using materials from non—timber products from the forest. The survey recorded

26 other livelihood activities (see Appendix C8) based on surveyed households.

70

:owwom 32m 05 E scam Econ“ Z 82m 05 mo 02m 5033 05 :o @882 Be 895888 beam 2E. .v ocswE

 

                        

.1.

0.
Av 5
.3 ¢
e53 5: E
. 3 see “55:: 2&5
‘ execs 0.:
25:2 cone sod
5.32 .51.: 2&5 . :60

 

O <m¢< Ema—U

 

 

153:; im

 

 

 

:emwom .85 - m not A

.. /.
. A .
..v{ .
rswr
,w

seas:

71

Table 2. Summary of households (HH) in the five communities covered by the
Community-based Forest Management Program at the Bicol National Park.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Barangay San Pambuhan Tarum Colasi Tible Total
Pascual
Purok l 33 84 30 74 71 292
Purok 2 52 57 75 50 24 258
Purok 3 40 144 70 53 23 330
Purok 4 24 101 44 36 27 232
Purok 5 48 71 29 83 l I 242
Purok 6 46 21 23 90
Purok 7 31 10 41
Purok 8 8 8
Total HH 274 457 248 317 197 1493
20% Sample 55 91 50 63 39 299
Land Area (Ha) 2875 3653 1954 8482
Total Pop_n 1,189 4,332 1,081 1,449 1,379 9,430

 

 

 

The sampling frame was based on the listing of households obtained from
community Chieftains. These lists constituted the official list of residents and did not
include groups of leftist rebels whose numbers and significance to the study remains to be

determined.

The sample size was originally computed based on the conventional formula on
sampling. However, the formula required specifying a variance that is unknown for the
population of interest. One alternative to prove the sufficiency of sample is to determine
the power of the test. However, this approach requires knowing population attributes such
as the mean and standard deviation, which is unknown for the population under study.
Therefore, a 10-15% sampling size from related socio-economic studies (Lopez-

Gonzaga, 1994) was used. However, considering measurement errors (e.g.. interviewer

72

bias, interpretation of questions etc.) the sample size was increased to 299 households,

which was 20% of total households instead of 220 (based on 15% of the total household).

The sample was obtained using stratified proportional sampling, and using total
households of the community for calculating proportions. This approach was deemed
appropriate because the geographic distribution of five target communities suggests some
differences in population characteristics and sizes. Income levels of residents of sub-
communities (puroks) at the center of the community (barangay) are comparatively
higher that those in outlying areas. On the other hand, most sub-communities in outlying
areas have consistently agriculture- or upland-forestry-based livelihood. This pattern was
common in all five communities. Thus, instead of doing simple random sampling for all

communities, proportional sampling was used.

Proportional sampling implies that groups of households in one sub-community
have a different probability of inclusion relative to groups of households of another sub-
community based on population, but each household within a sub-community has the
same probability of inclusion. Thus, groups of households included in the sample
represent a different number of households in the total population that comprise the five
communities. Table 3 summarizes the number (expansion factor) that each household in
the sample represents. The numbers in parenthesis are actual samples. In order to inflate
to the five communities, the values obtained from 20% sample households (e. g. income
from forest exploitation of sample of households in San Pascual) were multiplied by each

sub-community expansion factor.

73

Table 3. Expansion factor and number of households (11H) — in parenthesis — sampled by
community and purok.al

 

Barangay San Pascual Pambuhan Tarum Colasi Tible
Purok 1 6.60 (5) 4.42 (19’) 5.00 (6) 4.93 (15) 4.73 (15)
Purok 2 5.20 (10) 5.70 (10) 4.69 (16) 5.00 (10) 4.80 (5)
Purok 3 4.44 (9) 5.33 (27) 5.00 (14) 4.82 (11) 4.60 (5)
Purok 4 4.80 (5) 5.05 (20) 7.33 (6) 5.14 (7) 5.40 (5)
Purok 5 4.80 (10) 5.07 (14) 3.63 (8) 4.88 (17) 5.50 (2)

 

 

 

 

 

 

 

 

Purok 6 3.83 (12) 5.25 (4) 5.75 (4)
Purok 7 7.75 (4) 5,00 (2)
Purok 8 4.00

Total HH 455) (90) (50) (64) (40)

 

3 Barangay (a community) is the 2nd to the lowest in the hierarchical administrative classification of
communities in the Philippines. "Purok" refers to a section in the community; the number of sections
varies in each community.

Developing the Social Accounting Matrix (SAM) Structure

A SAM presents a community's balanced income and expenditures. Balancing
them requires considerable knowledge of overall community economic structure and
linkages as influenced or dictated by various institutions. Consequently, analysis of
natural resource exploitation cannot be done in isolation, because livelihoods of
households in rural areas are linked and in many cases complementary. Nonetheless, a
SAM model can be constructed to demonstrate and estimate the magnitude of
exploitation of natural resources relative to other production output. Hence, all
production activities, whether natural resource-based or not, should be included. An
appropriately structured SAM is useful for a number of economic assessments — this is

discussed in Chapter 5.

74

SAM Development

To construct a community SAM, the household surveys first must be consolidated
and aggregated. The data underwent encoding, cleaning, verification and consolidation
before analysis was conducted. Various steps are described below.

In this study, the focus of impact assessment is on natural resources within one
contiguous forest bounded by all five communities. A single SAM that covers all five
communities seemed more appropriate and provided a consolidated picture of impact.
Thus, consumption and production activities of 20% sample households (using stratified
proportional sampling) from all sub-communities in five communities were inflated to
create a single SAM. The values were inflated to the community level by multiplying this
SAM for the 20% sample by each purok expansion factor (see Table 3). Activities of
CBF M were not inflated, since these data were available from the three POs, covering
their jurisdictions.

Consolidation of data follows the structure of the SAM and the objective of
analysis. The SAM model, in summary, accounts for production activities, production
factors used, institutional expenditures on outputs of production, capital accumulation/
depreciation, and domestic or external trade of output. The core production activity sub-
matrix was categorized into agriculture farming, forest (natural resources) exploitation,
and other livelihood. Thus, encoded household data were categorized into production,
destination of output, inputs used, and consumption points. The resulting SAM model

covers forest (natural resources) exploitation along with all other household consumption

75

and production activities, and it segregates household-bound and marketed components
for all five communities. Other than providing a good picture of the community
economy, the inclusion of these other components allows estimation of the overall ratio
of natural resources in consumption and production, and estimation of SAM multipliers.
Building an aggregate community SAM, in effect, consolidates all income (receipts) and
expenditures over all households in each community.

Accounting for household- or market-bound commodities required an initial step
of computing the ratios and proportions of natural resource consumption by households.
This required careful structuring of the matrix so that household-bound commodities

were reflected. The next section discusses details of the SAM.

The SAM Structure and Components

The conceptual framework explained in Chapter 3, presented a mathematical
model of the SAM structure and institutional linkages. This chapter focuses on matching
empirical data with components of the SAM, hence deals with calculation of entries in

monetary values.

The SAM in this study (Figure 5) has similarities with the general structure of the
village model by Taylor and Adelman (1996), except for entries in sub-accounts. Sub-
accounts under production activities, one of the major accounts, include agriculture
farming, forest exploitation, fishery, and other non-land-based livelihood activities.

Factors of production include family labor, hired labor, purchased capital, and natural

76

capital. Institutions include small-landholder households, landless household, community
cooperative or peoples' organization, and government. Capital entries include natural
resource depreciation, appreciation, or accumulation and human capital. Rest of the world
is treated similarly. These account categories become account centers or units in the
SAM. The alphanumeric codes within the sub-matrix in the figure links to survey
questions (see Appendix 8.] for the survey questionnaire). Hence, the SAM is
distinguished from national and regional input-output models by its emphasis on rural
households as production centers involving various types of activities. The latter models
treat business sectors (i.e., manufacturing and services), government and households as
distinct production activities. This modification in the community/village SAM gives

emphasis to the socio-economic assessment needs.

Explicitly defining sub-accounts on natural resources emphasizes its value-added
to production activities, and the impact of exploitation on its stock and flow (modeled in
the next section) as represented by capital depreciation or accumulation accounts. In this
manner, the influence of consumption and production activities on the sustainability of
natural resources can be assessed. Hence, the matrix emphasizes natural capital
depreciation or natural resources consumption and production (i.e., forest exploitation in

tandem with agricultural production and other livelihood activities).

77

6:25:83. .323 ES. scans—com... ..o 82:8 98 2<m 05 mo 3:82.800 .m 2%....

 

.29... h

 

2.53 o... ..o .3». w

.2394 52:: I

:o:~.=E=uo<

cocfiuuan<

20:203an
.283 v

EuEEu>oU
92222300
3.3.22.3. 39:23..
3.2.9.23: .ov.o_...nEm
2053...»... n
.3352
338-52
.3230
San.— out:
canal. 3.8a“.
:ozuzvocm ..o 32am... N

 

sadgaaau

 

 

 

 

 

 

 

 

 

 

 

 

mmOfimOdmO Emmu

.30 .5233: 550

-Nmo.o.o.o.o :33.

.20 33.3...

...OXIO .eufionEM emu?

.00. 353:: :o:3.o...xw :30...

coco—:3...— wEEEH. ..cm<
mu.:>:u<:o..o w n. —

a: .22; 2.... 3.3 22.2.? 3.3.2.. “n.3,”...
EoCua 2.20:3. .. a a. .. u a. nos—«>zcauoaeioaaaocuut.
b o n v n u _
3.231.123 an.—

 

 

 

78

Measurement and Valuation of SAM Inputs

There are two fundamental issues to resolve in natural resource accounting
involving the village or household economy: (I) varying units of measure for
consumption commodities and production outputs, and (2) how to value non-traded or
non-marketed commodities. Natural resource goods and services beyond these
commodities are not addressed. This study describes approaches for the above issues that
are applicable to the five communities under study. Application to other areas or

communities was also envisioned in this approach.

In the community, units of measure of marketed commodities vary because of
different forms of transactions. In order to resolve these variations, the most logical
approach was to convert physical outputs into monetary units: using local currency, the
Philippine peso. Use of monetary value (Pesos) provided a common unit for aggregating
dissimilar products and activities, a fundamental requirement to be included in national

income (and/or natural resource) accounting.

lmputation of value (based on local currency) was an approach taken for non-
marketed commodities. Of particular importance are natural resources used as capital
inputs in production and use of family labor as substitute for hired labor. Chapter 3
identified two standard approaches: shadow pricing and market price of substitutes.
Peskin (1996) and Vincent (1998) recommended use of market value or opportunity cost

of labor (still market price) to impute value for natural resources. In some instances.

79

employing the suggested opportunity cost approach tends to overvalue the resource. For
instance, a household decision to produce own-fuelwood indicated that opportunity cost
of hired labor is higher than its (fuelwood) production value. On the other hand, James
(1996) recommended the use of market valuation for accounting purposes geared for
policy analysis as opposed to opportunity cost based on labor wages. This study valued

family labor as the residual value of production after deducting input costs.

For valuing timber, several studies supported the use of stumpage value (DENR,
1991; IRG et al., 1996). In the perspective of economic efficiency, stumpage valuation
overestimates asset value because it disregards future tree growth and most likely
included monopoly rents in a developing country setting (IRG et al., 1996). Calculation
of the value of fuelwood, which has both a traded and a non-traded role, can be based on
market value of delivered processed wood fuel less costs involved (equivalent to
"stumpage"). Imputing value based on family labor used in wood fuel production may be
used by conducting time and motion on fuelwood production. Thus, the SAM entries
(including natural resources exploitation) were in monetary terms using market prices
and imputing values of non-marketed commodities using market prices as a starting

point.

Resources Sustainability and Community Well-being Interactions

Accounting for exploitation of natural resources is one focus of this study.

Changes in household demographics, consumption, production, and external factors

80

affect the stock and flow of natural resources (timber) in the community and vice versa.
Different levels of exploitation lead to different patterns of natural stock and flow.
Exogenous controls may mitigate undesirable use levels or enhance desirable ones.
Subsequently, controlling exogenous factors creates changes in various endogenous
factors (i.e., production and consumption) and the well-being of households. All these
interactions and changes can be reflected in the SAM. Thus, the SAM, ceteris paribus,

becomes the information system at a point in time.

Assessing the linkage between resources sustainability and community well-being
over time involved a two-stage procedure. The first stage required simulating the stock
and flow of natural resources as affected by various options of exploitation, taking into
account the goal to sustain well-being. The second stage was to assess the impact on
well-being of controlling/changing exogenous variables, taking into account the goal of
sustaining natural resources (timber) stock and flow. This second stage measures the
impact of a unit change of exogenous variables on endogenous factors affecting
household well-being (here described as consumption and production patterns). These

processes or stages are described below.

Simulating Natural Resources Stock and F low

The simulation procedure was designed to assess the sustainability of various
options for harvesting timber resources, based on a sustainable harvest per year. The

simulation model was also designed to evaluate the rate of appreciation and/or

81

depreciation (physical and monetary) of timber resources affected by community
activities. This became the management tool for assessing the sustainability of forest

resources as affected by various activities in community forestry.

The procedure required information on the initial stock and flow of resources. The
survey of households and focus group discussions provided information on consumption
and production activities. An assessment and inventory of resource stock (using the stand
and stock table created by the POs as proxy) completed the other side of account
development — the resource base. The summarized list of products extracted and sold or
consumed became the master list of resources for inventory. Gathering this data required

almost the same amount of time as household surveys.

The first step in the process was to define natural resource processes, and how
human production activities affected these resources. These processes were translated
into a simulation model that forecasts trends of resources, as driven by human economic
activities. Ideally, the whole human-natural resource-system interaction should be
modeled, but the resulting complex network and data needs far exceeded resources
available for this study. Such a design will require enormous amount of data. Hence, the
focus was on forest resources. Specifically, the focus was on timber resources, because
no other inventory data were available for other forest resources. The source of stock and
flow information for devel0ping the timber resources simulation model were the stand
and stock tables (see Appendix Tables B. 1-3) from three POs developed for their 25-year

planning period.

82

The basic model for the simulation was the conceptual framework adapted by

Delos Angeles et al. (1995) for timber resources in the Philippines, similar to the
reconciliation account of Canada (Statistics Canada, 1997). Its major components were
opening stock, closing stock and net change in stock of various forest resources for every
period. Opening stock plus net change in stock within the year yields the closing stock.
The model incorporated resource characteristics such as growth rate, natural mortality,
damage, and harvest options of the community on the periodic flow of resources. Thus,
the measure of depreciation or appreciation could be negative or positive change in stock

-— an indicator of sustainability - for the 25-year project duration.

This approach was modeled using spreadsheet simulation in Microsoft Excel. The
simplification required assumptions that other components of the forest system are not
significantly affected by natural resources exploitation. An alternative graphical
simulation model, using software such as STELLA (HPS, 1996) may take into account
the complexity of the forest system by incorporating linkages with important natural
resources such as soils. However, this approach would require further steps in modeling

that are beyond the scope of this study.

Evaluating Exogenous Impacts on the SAM

The SAM is a snapshot or an account of receipts and expenditures at one point in

time. It cannot provide concrete answers to questions of sustainability of resources and

83

well-being over time because most changes brought about by external factors appear only
over a longer period, beyond the one-year data period of the SAM. A supplementary
process that makes use of SAM information is to simulate impacts from changes in the
SAM over the short term, by controlling exogenous variables. This makes use of the

linkages between exogenous factors and the SAM represented by multipliers.

The procedure involves identifying controllable exogenous variables in order to
satisfy sustainability objectives. Options include reducing consumption/production,
shifiing production, importing, changing prices, government regulation, or expanding the
forest (see Figure l). The desired goal is to sustain resources and maximize welfare. The
option to choose depends on which linkage in the SAM will create the most desired
impact. Thus, multiplier analysis involves evaluating which among the options will be
effective in attaining those goals. Results of such analysis are discussed in the next
chapter. This procedure makes use of the multiplier matrix of endogenous variables to

assess impact of exogenous variables.

SAM Multiplier Matrix

The multiplier matrix is developed in two stages. In the first stage. the SAM
elements are structured into endogenous and exogenous accounts. The latter, in this
study, include Government and Rest of the World. Segregating these endogenous and
exogenous accounts is critical in evaluating the impact of changes in the community

economy and on natural resources. These model proceeds with two assumptions:

84

0 Income and production changes as a result of exogenous introductions are
strictly proportional (linear); and
0 Mostly exogenous factors, such as government and market, trigger changes in

the village economy by influencing production and consumption.

Then the base SAM is converted to a proportion matrix, or average-expenditure
propensities (Taylor and Adelman, 1996), by dividing each value in the account matrix
by expenditure totals (each element divided by its corresponding column totals). The
exogenous share or average propensities for leakage (AL) is separated from endogenous
shares to produce a sub-matrix of endogenous share (A5 matrix). In effect, the SAM can
be expressed as the product of A-matrix and endogenous incomes/expenditures. This
implies that row and column sums must be equal — (or as Pyatt and Round, 1985 stated,

injections must equal leakages).

In the second stage, the average expenditure multiplier (A5) is converted to a
Leontief-type multiplier derived from the mathematical relationship between income and

expenditures as follows:
YE: A5 )7], + x
Where:

YE = vector of endogenous incomes or receipts;

A5 = vector of endogenous average expenditure propensities;

Y1. = vector ofexpenditure totals, referring to column totals in the account matrix;
and

x = exogenous income changes (introductions).

Since, in the SAM YE: y‘

If

Then,
YE = (I - AEr'x
Or
ME = (II ' AEl'l
Where:

ME = Leontief-type endogenous income multiplier

6 A5 S 1
Thus, accounting multiplier matrix, (ME), originates from the average (expenditure)
propensities (A5) that measure the direct effects of exogenous introductions on
endogenous accounts in the SAM. However, the multiplier impact is greater than the
original exogenous change. Stone (1985) and Pyatt and Round (1985) decomposed the
total effect to reveal three types of effects: direct, indirect and cross effects (or similarly
called induced effects), decomposition of which is also presented in Defoumy and
Thorbecke (1984). Thus, any innovation or policy change (i.e. transfer of management of
forest resources to the community) affects economic activity within the community, and
thus impacts on resources. Linkages between consumption, production, and exogenous
factors determine the impacts of these multipliers. Chapter 5 further elaborates on these

impacts.

86

Secondary Sources of Information and Place of Study

In addition to the FGD, face-to-face survey, and gathering of resource
information, auxiliary information was obtained from various sources. Reports of NRMP
Community Base Forest Management Annual Working Plan (AWP), Forest Land Use
Plan (FLUP), inventory and assessment of the community forestry. ENRAP Phase I and
[I provided regional and national estimates of resources. Various government institutions
that manage community forestry, non-govemment organizations that assist the
community in the 3-5 year build-up period, and the community organization itself were
contacted for accounting validation. Household surveys were done in the five
communities in Camarines Provinces namely Tible, San Pascual and Pambuhan, Tarum
and Colasi. All these sites border the Bicol National Park in Region V. Finally, basic
formulation of the accounting and simulation models were conducted at Michigan State

University.

In summary, this chapter outlined the procedures for applying the conceptual
framework for natural resources accounting at the community level. The data collection
procedures included community interaction, focus group discussions, survey instrument
design, and household survey. Construction of the SAM involved mostly aggregating
survey responses of 20% households in five communities, and the rest were secondary
data obtained from the three peoples' organizations (POs). Assessing sustainability of

natural resources required developing a simulation model for natural resources

87

specifically timber. Finally, this chapter outlined the procedure for assessing the impacts
of exogenous changes on the endogenous variables on the SAM by making use of the

SAM multiplier matrix. Results of these procedures are discussed in the next chapter.

88

CHAPTER 5

RESULTS AND DISCUSSION

This chapter discusses the results of the SAM development, the simulation of
natural resource exploitation (recorded in the SAM), and effects of exogenous
interventions/injections on the elements of the SAM through a multiplier analysis. The
first section describes the construction of the SAM that incorporated non-marketed
production outputs and natural resources exploitation. The matrix format captures the
economic structure and linkages of various actors in the community economic system.
The second section describes the simulation modeling results of forest resources (timber)
exploitation as affected by various levels of exploitation (harvest). The third section
focused on evaluating the impact of changing exogenous factors on the SAM.
Throughout the chapter, the discussion centers on aspects of account development and

usefulness of the SAM for sustainability analysis.

Developing the Social Accounting Matrix

The initial direction of this research was to develop a SAM for each of the five
communities that buffer a national park, and for possible replication in communities
outside of the study area. However, in the process it became apparent that developing a
separate SAM for each community would only increase the complexity of the analysis.

but would not significantly change overall results and interpretations. Thus. all

89

information obtained from five communities was consolidated into one account matrix.
The option to consolidate all five communities stems from two important justifications.
First, the assessment focuses on the impact of forest exploitation activities on the overall
second-growth forest that buffers the Bicol National Park rather than the jurisdiction of
each community. A single account conveniently accomplishes this assessment, instead of
evaluating several accounts derived for all five communities. Second, aggregating these
five communities introduces more variation of livelihood activities. In this situation, it
mirrors a number of production activities that are likely to occur in many other villages.
Therefore, consolidating five villages as a "super-village" provides an advantage of
evaluating impacts of various forms of production activities.

The social accounting matrix was developed by synthesizing community focus
group discussions and household surveys. The schematic structure, shown in Figure 6.
consisted of 26 component accounts grouped into five major accounts: production
activities. factors of production, institutions, capital, and rest of the world (ROW). The
resulting SAM consisted of 16 sub-matrices and six vectors. Each row or column label
represents one account. Analysts interpret rows as income or receipts and the columns as
expenditures of that particular account. The SAM is a square matrix following the
concept that income should equal expenditures.

Figures inside the matrix are in monetary values based on nominal peso values in
1998 (US $l=PhP 41.29, average from September to December 1998, the time of the
field study). If the study focused on comparison of income between periods, these values

would require conversion into real values using a base year.

90

0.30 300002 .005 05 $000.00.. 8.0008600 02.. .0.. 2<m 05 00 50%.“... 20002.5 .0 20w£

 

 

 

 

 

 
   
 
 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

000x «0 0.00 300200000; 009—02000. 3.0.2.0900; 00.300000
«20:0 w . 3.00.3 ...0H 000000.390» .0200”. 300:0...00. ..0 20.0... 0. 2008.500 .30...
2.0.9001 .300. 03:90 .30H 0 A 0 0 0
. .00. .00.» 0 .30H .300. 309:. a .300. .30H a
m0.000m 0.0....09 h
3
.0.
0.003 05.3 .31 o 3
a
u
o
0200:: .300. m
258000.903 m
N 22.000 00.00:
..9, ..., .... 00.: 0.0000
0.07:; A05 cacao-5...... _ .... niu . . <
“1.030000...—
_0:000 .30... 00 ...—«>00. ...... 00._s.00.00<
. 0030.03092
,...,...
0.03.0 ..
. t . ,... Mi . sum... ll... .. 09:00. 0000 H
30.00.: .100.» . .10.... .A-v. argog .WA’Q nutunaauugf. fifiw umwp U n
0.0000. 0.00: Bvaa’w 39G . 0 . A 3...“. .u o:- 0306—: no 03000000.. 30 .000. n.
£00032050 .0.‘0%..0— .0303. a at. an: ....‘w 20.— O: 0,11de
“fluid; 3. .... «EJ‘ 020000000 000.00....EA U
..0 .120... Signihfl ......mvwé. . .51.... .. .....ifi
0.0030230. n 3
u
.3032 P
ads—0.00.2 «m
00.00:. 22.009 n
o
.300. .30... .00.. . 00 :I n
D
. 0000.. 3200...
00.30.0000,; :03... N
s . . Um... ...... 0.9.93... 003000000 30.0003
_ i no .u 4.... .... < . T... .. . .
.. 3m... . .. .... ... 1%.... fix .. . .m. .
. . .. ...]. ,...... ”...... . . W1. .0.. Emmu
:5 800.00 Aflv not-.9058“; A40 33.3.3.0 ......ux
3:: 90.00:. any 90.300000 0 no: 300 03.20.0034 00 no.0...0090xhfl 00.30030 €3.20
000000000 .30... We 3.0.. ...—000mm ”0050..”000 ...—0:200:34 2.00.030 .0.... ..o .5310 . Eu 010.090.... am: 3
.. ,..Mw..,.......... . .. . .. .. 04...}...04501. 1w 0% fi—O£:».0:.wwi «amu30-:.m=~ :o__a:e_axm~ 30.00
2h... ......,n9.......1.9.. .... ,... .t ...... .... 1. I... . .
....«t...m........... ......__......w.m..k.%h ,...... 05...... .....s...~. .....-ithuim , 905:... ,...:
n»...»..u<00:000000 —
, 00. 00 00 no. ... u
.300 00.0.0.0 0.005 000—0000000 22.000 000.3230. .0 0 0 ...». <
tucua 00.0039”. .00 30.00... 002000000
a b o m w n N n nos—.3, 9..-.000: o...uo..uu<
.300. £00000<n=000u=ufl 3000004.:000u000u
.0.—0....000um

 

 

91

 

The sections that follow describe and interpret entries of the accounts created. The
first part describes each major account and underlying components and their linkages,
and describes unique extensions of SAM construction introduced in this study. The
second part discusses uses of the SAM. This includes evaluating how exogenous changes

affect the system.

Components of the Social Accounting Matrix

Interpreting the outcome of the constructed SAM requires an understanding of
each account component and how they all fit into certain categories. In traditional
construction, the SAM is divided into two main groups: endogenous (within the
community) and exogenous accounts (external factors affecting activities within the
community). Endogenous accounts include Activities (or Production Activities), Factors
of Production and Institutions (other than government). Normally, exogenous accounts
include Capital, Government and Rest of the World (ROW). However, this study
introduced a modification in this account: capital accounts included natural resource
depreciation and accumulation, and were treated as endogenous, while government as an
institution remained an exogenous account. Another unique extension introduced pertains
to households (classified into small-landholders and landless) as production centers and
institutional users of output. Distinctions were made between marketed production
outputs and direct consumption of own-production. The rest of the accounts are balancing
accounts, notably Deficit/Surplus and Total Receipts/Expenditures (lncome and

Expenditures Balance Sheet).

92

In the SAM structure, shown in Figure 6, endogenous accounts occupy the first
rows and columns of the SAM. These grouping of endogenous accounts can be
understood in terms of their interrelationships. The first focal point of the SAM is the
sub-matrix of production activities as the communities' input-output matrix. Second,
factor inputs define the technology used and sources of inputs (including labor, man-
made and natural capital) of production. Third, destinations and recipients of output and

factor income reveal demand and expenditures by various institutions.

Briefly, the SAM constructed from consolidated data derived mainly from
household surveys have the following highlights:

0 The total value of household/community production activities was P 71,651,622;

0 P 12,618,383 or 17% of total output in all production activities were consumed by
households, hence, not marketed;

o P 16,370,320 or 23% of total production was non-marketed.

o P 37,982,478 or 53% of total production output was locally used, and
P33,669,144 or 47% was exported;

o The community imports P 43,962,754 which is equivalent to 61% of total
production value; hence, the community has a commodity trade deficit of
P10,293,610; less external remittances, the absolute trade deficit is P 3,557,209;

and

93

o The total value of natural resources consumed was P 8,188,197 or 1 1.4% of total
production value, and equivalent to 3.8% current natural resources stock, which

then translate to 3.81% timber resources depreciation value.

Descriptions of each element in the SAM follow, where letters in parenthesis refer

to the sub-matrix label in Figure 6 and details are shown as tables.

Production Activities (Sub-matrices A-E). Based on consolidated survey results,
households in the five communities undertake two major income-generating activities
(agriculture and forestry), and a number of other smaller livelihood activities that include
wage employment, retail trading and fisheries (Table 4). These latter three were top
income-earners in the community besides agriculture and forestry. In traditional input-
output construction, wage employment is treated as factor of production. However, for
purposes of evaluating production activity shifts, these types of activities (examples
include carpentry, jeepney driver. church worker) were treated as significant income
sources to emphasize the magnitude of their contribution to community welfare. Wood-
based fuel production and community-based forest management (CBF M), a government-
sponsored program, were distinguished to emphasize the role of non-traded consumption
and impact of government programs, respectively, on natural resources. The total value
of all production activities was P 71,651,622 distributed as inputs for other production
activities, locally marketed, directly consumed by household, reinvested in other

activities, and exported.

94

An entry in the sub-matrix can be interpreted in two ways. First, from the receipts
side (row entry), the P512,000 (see Table 4) for example, is part of Forest Exploitation
(row account) output used as input in Wood fuel production (column account). That same
value from the expenditure side, can be treated as the purchase of (expenditures for)
outputs from Forest Exploitation as input for wood fuel production. For CBFM, a
sizeable amount of its output is used for a number of production activities. Blank cells
imply no transaction between those accounts (e. g. no forest exploitation output used for
agriculture farming).

Inclusion of production activities, or simply "Activities," does not require that all
outputs enter the market but may include any major activity that involves economic costs,
such as subsistence production and produces an output. Institutional recipients of outputs
that do not produce outputs are treated differently. Small-scale activities with smaller
impact, that would not significantly alter the SAM structure, were aggregated with
similar activities (in traditional accounting this refers to an aggregation of smaller
components and labeled, "not elsewhere classified" (n.e.c). If so desired, the number of
activities can be disaggregated into smaller activities depending on the purpose or design
for the SAM.

The "Activities" matrix is flexible enough to include activities relevant for policy
analysis and decision-making. For instance, two such activities that concern the
government are timber poaching or illegal logging and reforestation. The impact of these
activities on natural resource stock and flow contributes to the impact of the rest. Other
activities that concerns environmental protection may be added to the matrix (an

emerging concern for current policies).

95

 

 

 

 

 

 

 

 

 

 

 

 

moE>Co< :ocoscoi

 

u

 

 

9:35:3me

 

8%.. 25.2. 25.2 25.2 3:8
33 33383
32:8 550
3.5%.: m
wag: E3 _ m.
25:52qu own? M
83; 233 8.32%.”. .85
Sod: wig—am .tw<
mo£>:o< 5:03.55
3 3
m m x v
m m. m m. o. w. m u m. m m. m. m... am.
rd n p m U: «NW. D. m m B ...”. I. w m
W m. m: «w m W. cm. H w fl W. «sic. s M:
u P s m. m m 323» b.5282 oaauohuw<

 

 

.95me 26828 2: mo < 5:92-939 x55: cogs—55 2<m .v 0381

96

This Production or Activity sub-matrix is similar in form to conventional national
accounts, but the latter cover major businesses that were non-existent (or nearly so) in the
community surveyed. This is unique in a sense that in most accounting matrices,
particularly national accounts, output of other sectors may be used by another sector as
inputs thus, inter-industry input-output is very significant. Inter-activity input-output is
minimal if the SAM is constructed from a household-production-center perspective. Most
rural household production activities are primary producers, where backward linkages are
minimal or nonexistent. Use of commercial fertilizers in agriculture, for instance, can be
treated as inputs. However, these are not locally produced but imported; hence, fertilizer
was treated as imported inputs in SAM construction. Thus, Production Activities was
categorized based on production activities of households, and not on the type of distinct

business occurring in the community.

The majority of household production outputs go directly to final consumption
(Table 5 Sub-matrix B) or as export (Table 6, Sub-matrix D). Inter-household input-
output transactions are less significant, and the survey did not capture such inter-
household interactions. Focus group discussions and informal observations support the
notion that little inter-household trade occurs. Thus, the SAM capture only agriculture
and forestry-related outputs (mainly forestry livelihood and C BFM) used as inputs for

"other livelihood activities" and wood fuel production.

The rest of production outputs were distributed among Institutions (Sub-matrix

B), Capital (as investment - Sub-matrix C) and the Rest of the World accounts (Sub-

97

matrix E). Tables 5 and 6 summarize destinations of production outputs. The results of
the survey revealed a number of other institutional recipients of production output. Thus.
a final component called "Others" (in Sub-matrix B) aggregates all these various
recipients. On the "Receipts" side of production, this account becomes the catch-all
account for destinations other than market, government, people's organization and own-
household. Listing such "institutions" is less important for the objectives of this study.
Examples commonly observed in the survey include donations of output to relatives
outside of the community and to neighbors and barter trading. This additional
"institution" also captures formal and informal transactions by households and non-
govemment organizations that provide financial or other assistance to communities. In
the community surveyed, several groups provided aid to individual households or
communities. Certain organizations specialized in housing assistance, social welfare
programs, educational and infrastructure support, churches and civic organizations.
Categorizing them as one group does not modify the effect on natural resources, which

was the focus of analysis.

Factors of Production {Sub-matrix F). Factors of production, shown in Table 7,
involved in those various production activities vary for each household. The simplest
aggregation strategy was to classify these factors into labor and capital. They further
divided into two subdivisions useful for analysis. Brief analysis of factor utilization
showed that Agriculture farming had the largest usage of family labor with total value of
P 32,084,862, or 90% total value of agricultural production, suggesting that production

activities are predominantly family-type production activities.

98

 

 

 

 

 

 

 

 

 

 

 

 

 

 

- momfihofi - - - - Emma
- - 20$”ch - 53.399 6E 683-6003
- - 298— - wmonmmm - 38:8 350
- - _m~.~_ _ wwmdmm; ommfit _o~.v0m.m mocosmi m
- - - 24.2 - 838a was“; .53 _ m.
- - - madam; - 42.35. 255335 ow; m
Somme - 33m - 33mm - 5:85.qu neon
«3&8; - hm _ 62 - www.movd - mEEEm .cw<
mo.:_>.=u< 553605
2283605 86652 853668
62.28% cozmficmweo Eon—056:5 .6
8: $060 m 068; 6:23 ,6 33:25 6:33 83:85 8x32
. Eczemaom 8x32 66:33:
3526531» 6553sz £050 moatucomxm moSEanxm 3: b. u an
. . . 66:69.0: 806:3 66:33: SEE—6:5 3» 3282 8a 0.. <
36.53.55
m
3.53233—

 

 

.Aeaozbm 2362.8 2: 6 m 6.36-65 3:98 55:66:. 6 cog—Ewen .m 29;

99

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

@353.” 933 33? 34.4? Emu
36.63.: ooo.~ fl m 63 683-683
3393 £4.23 2 $2 32:8 550
633w 833 30.8 3:05: a
835m - - was“; :96: _ m.
26.58% - - EoeonEm own; .m
26.806 30.23. 8.3.2qu :88:
Sowmmwm ommfimfivm mEE6m .:w<
8.538,: 55:68:
O :o.
8933— mu m 6.63 m 6:an 6_:E:.oo< 5:668:60
.w B m 6:960 62532:
66% W W of 6 “mom w 5:52 6:30 6562
w 6562 8=6> bus—SE ouawouwwaa
£906.: mzocowoxm 6:9wu
a b e m w
8:56:0an

 

 

 

3588; 266623 2: 6 m a Q .U waEbamv 3:358 22662: 6 33:5 6 2265366 550 .6 2an

100

 

 

 

 

 

 

 

 

- - me _ ._ _ meN owed. - - mmvdo 6562
- - - mnmdmv - - mwoé Shem $68.52
338 m
*5ng - owed owo,m - _ _ _n_ _ _ mtdm 03.30 .264 :85 N n.
3.0.390 - 36.2 8; .2 3.3: 30.? 0mm, _ 2 owm.wm~._ 3:9: 0:850: 650 M
- - www.mwo; vwofimow 3.5m _ m.m ©8533» ooQQflm $635.2 6:3 356m
228355 6 $88
226255 882% mafia; EoEonEm :ocgoaxm map—6‘.
Elmo 63 :83 $50 8.5%; 68m own? 320,.— 82.3.:w<
825» E5282 ouawouwwt‘
m2:>.:o< 5:03.05
—
gazesm‘m

 

 

 

35825 26838 05 6 “— xcafibsmv 86:65 6 £28”— .h 26%

lOl

Labor was divided into hired and family labor. This separation proved useful in
valuation of traded and non-traded commodities in the community. The value of family
labor was not necessarily equal to the opportunity cost of wage labor, but was a residual
value of production afier deducting all input costs. This valuation approach uses the
assumption that households resort to own-production instead of employing hired labor
because the value of output is less than that of hired labor. Thus, there exists an inequality
in value of family labor and hired labor. Market imperfections characterized the

community thus, shadow prices such as family labor diverged from market wage rates.

Capital inputs were divided into man-made and natural capital. The natural capital
component differs from the sub-account of natural capital in the account sub-matrix
labeled "Capital" (K). This difference is explained later. Here it suffices to mention that
natural capital inputs are explicitly market-transacted and produced natural capital used

as factor inputs.

Other than labor and capital inputs, the household interview revealed a variety of
other inputs in small amounts, thus they were lumped into an account labeled "Other
domestic inputs" to differentiate inputs that were purchased from outside of the

community. The Rest of the World account reflected values of the latter.

Component inputs or factors of production define the structure of production. It

also typifies a technology employed by households. Obviously, production activities are

not similar in component inputs. Some only have natural resources as input while others

102

have both man-made capital and natural capital inputs. In most cases, because production
activities are by households, only family labor is involved. The sub-matrix that intersects
Factors of Production by itself is a null matrix, because, logically, expenditures by factors

of production for itself do not occur.

Institutions (Sub-matrices G-J). Table 8 presents the components of the Institution
matrix, and its receipts or income for employing its factors of production (Sub-matrix G).
In the process of data consolidation, a number of options for classifying institutions
emerged. The disaggregation of institutions into components depends on the use of the
SAM. The SAM could be used to assess the effect of landlessness, poverty, or lack of
basic opportunities on natural resources sustainability. It is also flexible enough to
consider environmental concerns. Hence, the purpose dictates the structure as well as

content of survey questionnaires to acquire inputs for the matrix.

Table 8. Distribution of income from employing factors of production (Sub-matrix G of
the schematic structure).

 

Expenditures
2

Factors of Production

 

 

 

Aggregate Monetary Values

 

Other Man-made Natural

Family Labor Domestic Hired Labor . .
Cap1tal C ap1tal

Inputs
Institutions

'2, Smallholder household 42,168,103 650,361 1,090,270 352,334 110,060
'5 3 Landless households 7,434,597 867,605 17,612 140,751 13,261

g People's Organization - 6,094,678 391,994 - -

 

 

 

 

 

Others not specified

 

103

In this study. recipients of income from payments to factors of production are
households, government and other relevant institutions within or outside a community.
Thus, the Institutions account divides into households, people's organization, and
government (this part labeled as sub-matrix I is discussed later). Households that
compose the major consumption and production actors of communities further sub-
divides into holders of small parcels of land (small-holders) and the landless. This
classification explores the hypothesis that landholdings directly influence the decision for
wage employment (e. g. carpentry or road construction) outside of the community or
livelihood activities (e.g. white clay mining) other than agriculture and forestry. A
comparison of the magnitude of incomes and expenditures partially supports this
hypothesis.

A different component appears on the expenditure side for households. A
distinction between market-purchased and direct-household consumption expenditures
reflects subsistence- or own-production that do not enter conventional accounts. In this
study, for instance, direct household consumption of own-production was P 12,618,383
(distributed among small-holder and landless households) or 17% of total production
value. These additional components are not covered by traditional accounting

approaches. The importance of this disaggregation is emphasized in a later section.

People's organization (PO) is not a typical entry in a SAM. It was included for
two purposes. First, the government's community-forestry program recognizes the
important role of non-govemment or people's organizations on natural resource

conservation and economic development. Thus, the SAM includes these people's

104

organizations to evaluate their impact on natural resources and economic performance.
Second, the PO appears in order to represent the institutional set-up of the community-
based forest management concept. These POs serve as the rule-making institution for
common property management. as a conduit for external support of forest management
activities such as loans or financial assistance, and as the marketing arm for community
outputs. This serves to emphasize that it is very important to develop accounts at the
community level rather than simply aggregating all household production. Decisions do
not originate solely from the household, but also from the community. This is particularly
true when common pool resources exist that in most cases are strong points of political
contention. Chapter 6 briefly expounds on this aspect.

Not all income or receipts of institutions derive from employing factors of
production in community production activities. Households acquire income from wage
employment outside of the community; thus, the SAM (Sub-matrix H and J) records
these as remittances from external sources. In addition, government welfare programs
include subsidies or transfers to a number of residents (Sub-matrix I). Table 9 (Sub-

matrices H, I, J) presents various non-factor incomes from outside of the community.

Likewise, policy implications for production and consumption require inclusion
of Government accounts under institutions to cover taxes. transfers and subsidies that
goes into the production (recorded in sub-matrix N), and other institutions (recorded in
sub-matrix H). In the SAM, analysts treat government as an exogenous factor that
influences endogenous activities. Hence, for purposes of SAM analysis this was grouped

together with Rest of the World accounts.

105

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

wufiwoofi 82mm wmm midwfim 3.28% 8: 32.5
m _ @0me owm.moo.m 00%: me. _ o_ cosaficmwho @0385 8
3:de $22: - msofimaofiascfl a m
howfiovdv New. _ 3: wood: 8.23:0: 520::aEm M.
225:3:—
ua 0 d .d d s d
i G H N N S O I. l. H I n J H w n
o 9 m V B G e .I d ... an .d 0 Q. 0 e 1 0 0. 0 W. 1
m m. o m m mmamw mu. ma Wm”... mmm my; mwm
a n u. m u wwmwmwm mm wwwgmnmww 61w”.
m S w. u 3 .n1 3 m 3 m P w m s w I s o 1 o l W 1
a m M w a w a m a m u p ... u p ,.... mu..
1 d 1 1. 1 1.
.W ml. W m. m. m m. w m. 1 3:95:35 maiztconxm 83920qu 83.; b.3282 o.¢uo..uu<
P £060 £22.33: 303:3 mac—0:330; cov_o£_mEm
£90m”. gocomoxm 23:30 28:2sz
a _ h _ ... _ m w m
3535:9an

 

.5. ._ .I x. £81239 £55355 Amsocowowcov 2 3:593 25 Emacs: .moocfizssm d 2an

106

Capital (Sub-matrix K,L,M). This major account divides into four important
components: Savings/Investment, Natural Capital Depreciation, Natural Capital
Accumulation, and Human Capital (Table 10). Conventional accounts normally ignore
natural and human capitals. The Saving/Investment account may include household
savings invested in production activities. Part of production activity outputs (sums up to P
1,298,379 in this study) goes to savings of households (sub-matrix M) and institutional
demand for output (sub-matrix C, discussed earlier). These savings constitute the main
investment capital for further production activities or for human capital enhancement

(M).

The natural capital depreciation and accumulation reflect subtractions
(harvest/exploitation and damages) and additions (growth and forest expansion),
respectively, that result from resource use. Neither natural capital depreciation nor
accumulation is a feature of standard national accounts or the SAM. In conventional
SAMs, only a portion of natural resources appear as priced inputs (as priced factors of
production) or outputs of production, and its depletion (P 8,188,197 in this study) does
not appear as a capital consumption component. The conventional approach of
accounting does not provide ways of knowing the sustainability of natural resources
(timber) stock and flow. Thus, "Natural Resource Depreciation" and "Natural Resource
Accumulation" were added to reflect natural capital consumption and outputs of
reforestation activities or other resource replenishing activities. This is a way of
internalizing natural resources value in the production costs of households and the

community.

107

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8... 52 802 .956 58::
:oum.=E=ou< 3.95 .8.sz 8
5.8.8500 .SEQU .9332 v m.
. 1 . . d
8.. a 5. 8 25 m; amassusémgs a
.536
mu .0 H M d H m M
m wm am 1 mm mm mmm mmm mmm mmm
w 3m .muam U NJ...” WLMul memsxommu mm”.
m mm 12 m Wu ”.5... w.0..01 3mm WPm. 9mm
3 n «la. m. M W m m u D. o u D. m m.
m m... .m m. .w m 1.
W m m... w W. ... 85.33%. megaucoaxm. 8.2.32.5 mo=.a> b.8252 8am€um<
3:25.55 32.5 8.2.8.5.. $2.53 mgozomso: 520....aEm
.9260 82.35:.
00
v n W
3.3:...»an—
Eaau 58::
w 5.va 8.3.258... .338 3:52 a
02.03.. Rodam 83.8..“ 8.3858 3583532 m.
me>mmbco§mo>£ M
.936
concave“. meadow 3:0 2 we. L . o .558.qu 5.3.8.9.“... 35..
21.—mo .03.. @003 .550 . : .... .5 .1 ..S m own? .85“. 23.39:}.
82333.. 8.63.8.5 85.5» b.3232 93953..
_
8......caonnm

 

 

 

 

 

a). .1. .v. 5.38-95. .858 582. 28 £23823“ Ea 5.5.853 .958 .832 ..coE.mo>:.\mw=.>am .o. 0...;

Natural capital accumulation reports community efforts to replenish natural
resource extraction by reforestation or other related activities, and accumulation of stock
from natural growth. Information obtained from resources inventories may be treated as
supplemental (or satellite) account linked to this account. In the current SAM, this
account element records only the reforestation investment by the CBF M project
(P422,018). However, based on the stand and stock table for timber resources compiled
by three people's organizations, a partial stock assessment is reported in Appendix 32
(Tables 1-3)

The inclusion of these components provides help in evaluating the impact of
community/household production activities on the stock and flow of natural resources.
The section on assessing sustainability ofnatural resources further expounds on this
impact evaluation.

Human capital is another feature newly explored in SAM development. In
conventional SAMs, human capital is treated as an independent vector of account.
However, no substantial change occurs if human capital becomes subsumed under
Capital as a major account. This records household investment in human capital
enhancement. At the community level, this information is vital in assessing expenditures
on human capital enhancement. Part of the survey results included records of
expenditures of household on education of children (P 1,391,860). In a like manner, the
accounts record expenditures by PCs on training and seminars conducted to improve
people's organization management capabilities (P 17,500). Table 10 (Sub-matrix L and
M) records savings of households and People's Organization as well as investments in

human capital.

109

Government (Sub-matrix N3). The sub-matrix N, the intersection of

 

Government and Production Activities (Table 1 l) is a null matrix in the current SAM.
Normally, the government receives taxes from production activities (sub-matrix N);
however no such data were captured in the household survey, and the C BF M information
do not contain explicit payment of taxes to the government. However, the POs record
payments to the government in the form of license fees and forest charges from forest

exploitation totaling P 1,047,985, recorded in sub-matrix 0.

Rest of the World {Sub-matrices P,Qand R). Table II (sub-matrix P) records
imports of inputs for production activities and Table 12 (sub-matrix Q) record imports of
consumption commodities by households. The five communities are not closed
economies, and they are not self-sufficient. A substantial amount of imports and exports
to urban centers occur. However, communities are not fully integrated to the market so
that not all outputs of production enter the market; a portion is directly consumed.
Exports of production outputs and purchase of inputs and consumption goods from
outside of the community appear in this account. Any infusion of loans or capital
investment other than government from external institutions also appears in this account.

The difference between the two accounts appear as Deficit/Surplus. At the current
state, imports exceed exports [trade deficit of P 3,557,209. recorded in sub-matrix R] for
all five communities. This condition suggests that most consumption commodities are
normally purchased from the markets outside the five villages; other than those directly
obtained from production output and consumed by household as substitute for

traditionally purchased output.

110

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

«adeqm Swan... 0mm.o.o.m wm..m~o.o 3.9.3.: bonsai: m0:3.0:&xm..80... w 8
ma. muscon h m
03.3... 03.5..mm 010305.050”. e .m.
$0.20.. - EoEEBoorm a
s d
s 0 m d m H I M m H w m
«...... .3 mmm mmm mm... wmm
Wm mwl wmm. Wm” wmm. me.
WHO. w..s. “PP $5... “PW mysw
19 U U 0. N U D. «u... Wu...
3:36:0an. 3:26:35". 8:26:35”. 0.05.5» b.5252 0:30:34:
.::0.:E.:m:. 2050 $62030: $0.05. 0.0.9.039. :00.0—...:Em
20:25:.
n
00:5..Eomum.
60:36:09.0 ..0 £80. 0:: A0 .0 m00.:.:E-n:m. 20:35:.
3 32:95:00 :0..QE:m:00 ..0 $595 ABOM: 2:03 0:. ..o .m0~. ..:0EEO>oO .N. 0.2:...
80.08.: .8033: .8033 .Em.;w.m .moo.§o.m .3323 .o:.moo.c ..oo.§.mm 3.3630538. 0 ..u
m:_m::m.:._0...0n. h w
02.2% 29.3 mwmd 30.3 .mnwvo 020305.050”. o ..w
E0EE0>0O m. a.
w: m: :0E>.0 a: A...“
.22.... ...... ,_. . ...: a as“... a 2...”...
...m ..3 : m .. ..< .333»
m0...>:0< 5:03.005 350:0: 0.:w0..wa<
.
mun-ZZZEQXM—

 

 

 

.E 0:: Z 30:38-05. 3:608:50 5:083:00 0:: 30:. :0 3:005. :0 .30”: 2:03 0:: ..0 .00”. .::0::::0>0O ... 03:...

111

Deficit/Surplus (Vector 7 ). The survey-based social accounting matrix does not
easily balance for a number of reasons. In most cases, expenditures recorded do not
match with sources of income; exports and imports rarely balance. Thus, a deficit/surplus
account was created. For instance, the community received subsidies in various forms:
the initiation of the CBFM receives subsidy from the government (P 1,047,985); some
households receive welfare financing (P 175,008). On the other hand, the community
treats forest rent [calculated as natural depreciation in accounting sense, amounting to
P88,188,l97, recorded in (Sub-matrix 7,4)] from natural resource exploitation as part of
net income. Thus, natural resource rent less government subsidy is treated as surplus.
From the sustainability standpoint, the rent from natural resource exploitation should be
treated as depreciation so that government subsidy and depreciation should add up as
community deficit. The amount of natural resources depreciation should provide a signal
on the amount of natural resource capital accumulation requirement for that particular
accounting period. Without natural resources accumulation, the total amount of deficit is
equal to government subsidy plus natural capital depreciation. The next chapter discusses

the issue of sustainability of natural resources.

To aid in impact analysis, SAM entries are classified into endogenous and
exogenous accounts. The latter include government and Rest of the World. Changes
introduced by exogenous factors shape various endogenous accounts, as discussed in the

next section.

112

Uses of the SAM

The SAM has two main uses or functions. First, it is used for evaluating the level
of economic performance of the community -— or economic profiling. This involves
examining each activity's inputs, outputs and income distribution to members or
institutions within the community. In rural settings, one outcome of this type of

evaluation is a picture of the poverty situation and associated income distribution.

Second, the SAM helps in evaluating impacts of exogenous factors such as
government and market forces on community economic activities, income distribution,
and for this study, natural resources — economic impact assessment. As described in
Chapter 3, the SAM provides a snapshot of linkages of various exogenous and
endogenous factors affecting consumption and production activities of households. One
or two accounts or elements in the matrix, in this case government and rest-of-the-world
(ROW) accounts, represent these external factors affecting consumption and production.
Any introduced changes of these factors affect natural resources stocks and flows. Hence,
natural capital depreciation and accumulation accounts were included as new features of

the SAM. Discussion of these SAM functions for the study area follows.

Economic Profiling Function of the SAM

The SAM serves to characterize and evaluate economic transactions of actors in

the community. Evaluation takes on a number of forms. For purposes of this study,

113

evaluation focuses on the impact of consumption and production on natural resources.
Four types of evaluation that relate to natural resources are considered: self-sufficiency in
production, income distribution, level of integration with the market, and use of factors of

production. Results of these evaluation approaches are discussed in turn.

First, one evaluates the level of dependence of households or institutions as
economic actors on certain production activities. The evaluation outcome reports the
degree of dependence of economic actors on a particular production activity or activities.
Analysts can use either the base matrix or the average propensity matrix. For example,
Table 13 presents measures of average production propensities or percent contribution of
production activities to total production in five communities. Agricultural farming
represents the largest activity, at 49%, followed by forest-related activities (i.e., CBF M,
Forest exploitation, and wood-based fiJCI production). A narrative example of these

evaluation types is presented in Appendix C .3.

Table [3. Proportion of various production activities to total production.

 

 

 

Production Activity Values (Pesos) Proportion
Agricultural Farming 35,375,061 49%
Forest Exploitation 6,905,719 10%
Wage Employment 5,077,387 7%
Retail Trading 3,072,002 4%
Fisheries 5,884,294 8%
Other sources 2,833,365 4%
Wood-based fuel 3,582,927 5%
CBFM 8,920,866 12%
Total 71,651,622 100%

 

 

 

 

 

114

A second economic profiling examines income distribution among different
household groups (i.e. small-holders, landless, income groups, occupation groups, etc.)
and how this impacts natural resources. In this study, the SAM structure aggregated
households into small-holder and landless. Table 14 summarizes households sampled and
percent of household with lands to cultivate or own agricultural land (small-holder
households). Small-holders comprise 72% of total households. The proportion of
household with landholdings is one determinant of natural resources exploitation. An
example of evaluation is detailed in Appendix C .3.

The third evaluation approach identifies major sources of consumption: whether
own-production, local-market-purchased, or if the community is a net importer of
consumption goods. This type of evaluation determines whether the community is
subsistence-type, partially or fully integrated into the market. Simply described, a fully
integrated community suggests that consumption goods and production output are
marketed; all commodities are transacted in the market, and hence possess market price.
Furthermore, trade of production outputs, whether within or outside the community
occurs with less significant transaction costs involved. This implies that a considerable
portion of natural resource exploitation goes to the market, as shown in Table 15. One
notable exception in the SAM for this study showed that 17.6% of total production is
household bound, not reflected in the market, hence, not covered by national accounts.
This further implies that the five communities are not fully integrated into the market. It
is notable also that 21.3% of total production is unmarketed. This figure is close to the
estimate made by James (1996), who claimed that direct household consumption is 1/3 of

GNP.

 

 

 

 

 

 

 

 

N _ v 52 mai $0.5m mm 9%.? m _ N EN 38%
o Nb— 3. c\oo.o o o\co.oo_ ov ow Bah
@— _ mo. Sm $03 «N c\om.mo cw we aflou
3 v2 wvm £66m 2 foods mm ow 83.8%
mi N _ m 53 Raw. _ m mm gmdc cc 3 52:589.
mm o2 EN KERN m _ o\on.mn ow mm 338m cam
$35283
$75823 83:33: 32:55.68 3 mEosomzo: mac—2:3 Eozomsom SEOEEEm Bob 8:538:50
$29.3 cocoa—35m $3595: .881 £58550 n 20:88: mo own—8m o\co~ . .

 

 

 

 

 

.moEczEEoo o>c 05 .8 89:33 98 29:3 $3 2: E 958.36 2:3 .3 29¢

116

Table 15. Average propensities for expenditures on consumption for five communities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ex nditum
Smallholder households Lan ess households Ofi'riers Institutional
AWN“ Expenditure Expendflres Expenditures Expenditures
Propensities Market Household Market Household Peo le's Others not
Purchases of bound Purchases of bound Or pizatin eci fi ed
smallholders production landless roduction gan sp
Agn. Farming 38.4% 6.3% 73.7%
Forest Exploitation l .6% 1 8% 26.3%
g Wage Employment 81% 13.4%
§ Retail Trading 66% 0.1%
'3 Fisheries 7.1% 0.8% 12.4% 5.6%
I-
‘- Other sources 11% 5.1%
Wood-based fuel 58.1% 81.3%
CBFM 80.8%
3 Smallholder households
‘3 Landless households
2 People's Organization 2.2%
Others not specified 5.1% 0.0%
g Investment/Savings 1.7% 0.6% 4.8%
a
U Human Capital 0.2%
22 Government 12.0%
0
3 Rest of the world 714% 73.5%
Total Expenditures 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

 

 

The fourth approach that directly links with natural resources is to evaluate

component inputs or factors of production. This focuses on the combination of labor and

capital, and whether it is domestic, imported, man-made or natural capital. Labor

utilization in rural settings mixes family and hired labor for production activities.

Evaluation revolves around how much family labor or hired labor goes into each

production activity. Naturally, in rural agriculture, family labor is commonplace; hence,

agriculture exhibited the greatest value of family labor. For forestry exploitation, the

value of family labor would include of natural resources rent because use of natural

capital is not treated as a cost; hence the residual value of production in terms of

117

 

percentage, including natural capital utilization would sum to 96% (48.85% + 47.18%
from Forest Exploitation column in Table 16). In many cases forest production activities
are mostly complementary production, employing mostly family labor, to augment
income from agriculture. Hired labor is employed mostly in seasonal agricultural
cropping. This has policy implications related to providing alternative livelihood

activities.

Capital utilization, the focus is on how much natural capital goes into production;
whether traded or non-traded. Of the total production value, 27% came from natural
resources (see Table 13). The intensity of capital utilization reveals the kinds of inputs
and factors commonly available or accessible to households in the community. Thus, the

outcome provides policy directions related to providing access to natural capital.

Other options for evaluation related to factors of production revolve around the
objective for constructing the SAM and constituent accounts involved. For instance to
evaluate land as factor of production and its depreciation, the analyst should impute value
on the land applying valuation techniques such as hedonic pricing, or other non-market

valuation techniques.

All these types of evaluation help refine SAM construction where data
inadequacies can be identified. An evaluation of economic performance of the
community over time requires a different approach. The next section discusses these

approaches as they relate to decision-making uses of the SAM.

118

 

 

 

 

 

 

 

 

 

 

 

 

 

 

moE>co< 5.32605

 

—

 

 

nonaguoam

 

$_ ~._ $3.3 $56 $5.2 $m_.o $vm.o $$.~ 283 05.3 30mg
EoEEo>00 m
13.96 5:3:
can: 8.53532 336 3332
$5.2 $33 as: .5. 822858 .338 3:32 a u
mmagumbcogmgfi m
£82 $86 $26 .53 3&8 3532 am.
ea: $8.“. $88 .258 8.85.5:
$om.v $36 $36 $a_ .m $wm.o $mh.~ conni— cBE ~
$mm.wo $3.0 $o~.o $36 $3.— $mm.~ $3.». 3:9: 0:888 .050
$9.3 $3.3 $3.3 $3.3 $3.? $2.60 .883 3.58,.—
couosuoa mooBom mafia; Evie—92m 5:86.qu macaw
21.50 3:..— voo? 550 mutogmi ...Som own? 620» ohfi:o.i&<
8:3:—
Efiuseeum he 23.—om E anathema...—

 

 

.=o:o=coa :33 8 55:88 no 882a ho coanoE .2 2an

119

Policy and Management Decision-making Uses of the SAM.

The SAM constructed for the five communities, like other SAMs, presents
production decisions made by households based on the opportunity set offered for
one period — one year. It is a static matrix. This snapshot account does not readily
reflect effects of external interventions, which could extend past the l-year
period. However, a series of SAM over time can exhibit the long-term trend of
structural changes in the rural economy brought about by these interventions.

Constructing a SAM multiplier matrix facilitates comparing between periods.

Prior to constructing the multiplier matrix, the SAM was divided into
endogenous and exogenous accounts (Taylor and Adelman, 1996; Pyatt and
Round, 1985). In generalized format:

Y= Ag 1; + x (1)
Where:

Y = vector of total income or receipts

A

Y = vector of total expenditures (representing column totals in the SAM)
A5 = square matrix of endogenous average expenditure propensities for

each account

x = vector of exogenous injections (i.e. government, ROW, etc)

120

The AE it represents the endogenous component of the matrix. Since,

Receipts equal Expenditures, therefore, Y = 1;
Hence, simplifying Y yields:

Y = (I - Aer'x (2)
So that,

M: = (I - Ag)" (3)
Where:

ME = is matrix of Leontief-type multiplier for endogenous accounts

1 = is an identity matrix

Based on the generalized form, a schematic presentation of the SAM
constructed for the five communities is shown in Appendix C .1 Table 22. Using
this schematic framework, the Ag, (1 - A5), and M; were computed. The A5 was
computed by dividing each account element by its corresponding expenditures
(column) total, and M; is obtained by matrix inversion. Appendix C.1 Table 23
shows the AE and Appendix C .1 Table 24 presents the ME and exogenous
multipliers (GE). Table 17 provides a summary of endogenous, ME, and
exogenous multipliers, GE. The next section provides interpretations of these

multipliers.

121

o: o
m3 o

3:69: EEEEMEO

do: 3050

@038; 9:53

oo 33:03A—

omno ammo onmo in... who o 25>) 2: ..o and m
woo o So 3 ~ooo mooo Nooo 3055950

933 he menu—.95...— .235
=2:an

33.5 b.3232 u.auu._uu<

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ooo _ ooo _ ooo _ ooo _ ooo _ ooo ~ ooo _ ooo _ Eoobam
Kw o wmo o oo. o omo o £0 0 nmo o co». o ".mo o 3359:2er
owm o :o o oom o to o 3.3 o woo o wow o 36 o 253 05.6 $3. m m
2.. o _oo o woo o moo o Moo 0 ooo o ooo o o .o o EoEEoSO mud
Egon... mnocowoxm m.
omwo Zoo o2 o mvoo :oo Eoo a_mo onoo Eafiu .. fl
woo o 21o moo_ wmm. _ of _ mm”, _ o: 3 wow _ . n qua
3o. mo_ o 30 _ 31m _ _N_ _ mom _ 0:. o .mm _ 5.532; .3 :23... N w.
in m w: _ 03. o o: _ mmm _ MN... _ 31m _ .3. _ musizu< zososnoi _
:ozosnoa EoEonEm cosflafizm WEEE
2%: Ed 309.5 mouaom 550 .3555 main; :5“; was? $20... 83.3:3...
mo_:>:o< “522605 335.) b.5252 oiueuuw<
w u
.1 k

 

 

 

£23238 .mO .msocomoxo 98 £2 .msocomocco no bee—cam .2 03.;

122

 

 

 

 

 

 

 

 

 

 

[23

 

 

 

 

 

 

 

 

 

 

 

- - ooo._ ooo. _ ooo. _ ooo. _ 39.3w
2 to ES 83 32 293235 a
$2. cameo - need 283 250.8% m m
memo mid - wvoo 8055300 . m
388... maocowoxm m.
03.5 03.. 89. woo; REED w v.
- - - mimm moo; - Sad 823.5:— n w...
- - - m2... v3.— - Ewo 55305.8 328“— ~ m.
- - - mom..— nhNN - owe; 8353‘. 85255 —
H mg a
mu m M m A 3:95 ozszano< 5.360300
.m ..u. m o m . . .5.an 255635
m. w. m J m 5:5: .556 .
s n m m .8382 3532
1 r u an
398m maoaoxm 3:30 mos—.5 523—: 8a 9.. <
n v
«Ragga ...—Sagan
8:53:03”.—

 

 

 

uoscccoo. . £2322: .mO .mzocowoxo can £2 .msocowonco no 3885 .2 03.;

Interpretation of the Matrix Multipliers, M E

Exogenous accounts in the SAM link the community to various external factors
(see Figure 1) that change over time. Market prices of exports or imports affect
household production; savings/investment and government actions in the form of policy
change, institutional arrangements or regulation affect opportunity set for consumption
and/or production; external remittances or donations increase incomes of households.
Thus, any income effect changes household expenditure/consumption decisions, and

subsequently production decisions.

Conceptually, various linkages can explain the effects. Exogenous impacts are
transmitted to production activities, factors of production, whether natural or man-made.
then to receipts by institutions from value added in production. Part of the income by
institutions is spent on consumption goods or expenditures by institutions such as small-
holder or landless households that are either imported or domestically purchased; thus,

part of the production impacts leaks to outside of the community.

A change introduced by exogenous factors can be positive or negative (Pyatt and
Round, 1985). For each one unit (peso) of exogenous introductions into any account, say
the upper leftmost row and column (Table 15), means that the ultimate amount for
agriculture production will be increased (decreased) by P 1.441, an increase (decrease) of
P 0.441 of such production. The total value of agriculture production including the values

of inputs is:

124

l*M= 1,441+ 1.351 + 1.408 +0.076=4.28

In a similar way. restriction on forest exploitation (row 1. column 2) can be

expressed as:

-1*M = -1.243 - 0.719 - 0.749 - 0.519 = -3.23

A l-unit value reduction in forest exploitation will ultimately reduce overall forestry
production activity by P -3.23 including reduction in the employment of factors of
production previously used for such purposes. An application of this type of analysis
related to external intervention relative to sustaining natural resources is discussed in a

later section.

It is important at this point to place qualifying interpretations of the multipliers.
First, the increases/decreases of values initiated by the original introduction occur
because of direct, indirect, and induced effects as the reactions go around the linkages of
various accounts; they are not instantaneous impacts. Decomposition of such effects were

discussed by a number of studies but not covered by this study.

Second, it is important to note that these multipliers assume that prices are fixed.
and income elasticity is unity, even with the introduction of exogenous changes. It is

likely that prices may change as a result of exogenous changes. Changes in prices may

motivate households to shifi production activities. Therefore, prices determine the
opportunity set workable for households. Any exogenous policy intervention should look
at where the multiplier effects start and how they affect endogenous accounts. For
instance, the CBF M seem to be isolated from other sectors of the community because of
its limited linkage. This has implications on income distribution pattern of the CBFM
program on the community. This type of analysis is possible by decomposing the ME so

that indirect and induced effects are determined.

Alternative approaches emerged from examining the SAM. One approach looks at
the value of family labor for each production activity. The higher absolute value of
family labor would suggest greater emphasis on that particular production activity in the
next period. In Table 16, wage employment provided the highest value of family labor
followed by agriculture. Besides agriculture production, the next best supplemental
activity for households will be forest exploitation, other than wage employment. It must
be noted that family labor in forestry, in reality, includes rent value of natural resources
used in production. Households do not calculate rent of natural resources because they

treat it as free factor of production.

Another alternative approach is to regress family labor with total production,
hired labor, domestic and imported inputs, and capital inputs. This can be done for
relevant production activities such as agriculture, forestry, retail trading, fisheries and
others. The parameter to assess will be the size of coefficient of 'total production'

variable. The 'total production' with the highest coefficient will be the most likely

126

production activity that farmers would shift to or concentrate in addition to other
production activities. Obviously, forest production activity will be part of that
opportunity set that households undertake. Thus, natural resource depreciation is always

an account to look closely in any rural production accounts.

In summary, components of the SAM can be tailored to the need of actors for
such information. The types of evaluation will depend on the focus of decision making.
Thus, analysts develop the SAM based on situational needs. Entries in the SAM, are

consolidated and measured in monetary terms. Values are based on actual transactions.

Sustainability of Natural Resources Recorded in the SAM

The third component of framework development (objective #2 of this study)
involved establishing a link between natural resources recorded in the SAM and the stock
and flow of timber resources; this provides a picture of sustainability of timber resources
used in economic activities. lnfonnation from the SAM is used to simulate changes in
timber resources stock and flow over time — a basis for examining resource

depletion/accumulation.

Ideally, the SAM pictures a general equilibrium in the village that equates supply
and demand or production sustains consumption. If this equality holds over time, the
community is self-sufficient in production. A corollary would be that the combination of

man-made and natural capital sustains the consumption by households. Natural resources

127

accumulation constantly equals or exceeds depreciation; hence, the community is
maintaining its natural resource productivity. Consequently, its consumption pattern for
natural resources is sustainable. However, communities are not closed economies because
certain consumption needs are not available within, and households export to markets
outside the community. The combination of exogenous and endogenous factors influence

exploitation of natural resources, beyond the minimum needed within the community.

Proof of sustainability of natural resources lies on the stock and flow patterns as
affected by changes of various exogenous and endogenous factors. The next section
presents results of modeling natural resources stock and flow helpful for impact

assessment.

Modeling Natural Resource Exploitation

Identifying indicators of sustainability requires modeling interactions of human
exploitation (recorded in the SAM) and the natural resources system. Two aspects
important in the development of a model of natural resources exploitation are the
magnitude of demand (and its rate of increase) and the stock and flow of resources over
time. The SAM indicates current levels of consumption (treated as demand). Modeling
based on a resource assessment or inventory provides information on the stock of

resources.

128

The forest resources are part of renewable, dynamic system with its varied uses
and products exploited by the community. Forests are depletable beyond a certain
threshold of exploitation (and impacts are seen only over a longer period). Those who
exploit resources and decision-makers at the community level do not know this threshold.
Thus, a rational decision considering incomplete information is to simulate natural

resource conditions over time as it is affected by human exploitation.

The objective of modeling was to simulate the impact of resource exploitation by
the community, specifically for timber resources. A variety of tools could be used to
create and run the simulation. A simple approach briefly presented in Chapter 3 was
spreadsheet simulation using Microsoft Excel. The approach confines simulation to
timber resources using the framework applied by delos Angeles et al. (1995) for the
Philippine second growth forests. Harvesting, natural damages and random fire
occurrences reduce the beginning stock, measured in cubic-meters, of timber over a 25-

year period.

The simulation evaluated three harvesting (exploitation) scenarios based on
current demand by the community. The first harvest scenario considered a harvest of 74
hectares per year proposed by the CBF M . The second harvest scenario harvested based
on current growth per year. The third harvest scenario, otherwise called the local
minimum wood requirement (reflected in the SAM), harvested 2,652 cubic meters per
year (16 hectares harvested per year). Figure 7 shows the stock trend based on these

harvest scenarios. This Figure 7 scenarios assume a single fire occurrence over 25 years,

129

(at the let year) that causes a 5.2% loss (damage) to the existing stand (based on

national average reported by AIFM for the Philippines - AIFM, 1996).

 

Opening Stock of Timber

 

‘ —-a"II““

 

 

 

 

 

 

+ Harvest = Growth
—I— Proposed Harvest ___ . ____
L +Min Wood Req.

 

 

Volume of Timber, cu m
. 1 l 1 i 1 i

 

 

r V r T‘]

'- (V) In I‘- O '- (‘O In h- 0'0 '- ("a
v- v- v- v- v- 0] N

In
0.]
Years

 

 

 

Figure 7. Simulation of the effect of three harvest scenarios on natural resources stock.

Appendix C.5 Table 31 summarizes series of simulation with varying number of
fire occurrences. Appendix C .5 Table 32 summarizes a series of simulations to
determine the level of harvest that will make the ending stock of timber to be not
significantly different from the beginning stock — a procedure to evaluate maintaining the
productive stand. The sustainable harvest at varying fire occurrences was 12 hectares per
year, with an average of 165 cu m harvest per hectare (average of harvest per hectare by
three POs) producing 1968 cubic meters. It is worth noting that the minimum wood
requirement required a harvest of 16 hectares per year. The policy implications means
that harvest must be regulated or wood consumption must be reduced. The impact of this

change on the community can be analyzed using SAM multipliers (discussed later). This

130

further implies that households may choose to recover lost income by switching to other

livelihood sources.

In the analysis of the five communities’ proposed harvest, timber will be
declining at a rapid rate, exceeding the growth rate of existing stands and new growths.
Pending more detailed analysis this indicates that timber resources will be declining
continuously unless (I) the communities decide to reduce harvest to the level of the in-
growth, or (2) the government regulates natural resources exploitation through policy
actions such as regulation or changing land tenure agreements, or (3) the communities
institute arrangements through group contracting to control timber exploitation (Figure 1
provides alternatives for external interventions on community economic activities).

Impacts of these approaches on the SAM are discussed in the next section.

Evaluating SAM Changes Using Multipliers

The section on interpreting multipliers demonstrated the usefulness of SAM
multipliers in evaluating impacts of exogenous intervention on the community economic
system. Two types of exogenous interventions are examined: regulating timber
exploitation activities so that it is sustainable and promoting shifis to other production

activities.

131

SA M, Simulation of Natural Resources and Multiplier Analysis

The SAM records the value of exploitation of timber resources (as proxy for
natural resources). This value was transformed to a volume measure for use in natural
resources simulation. Different demand scenarios were simulated. If the outcome of the
simulation for a demand scenario proves unsustainable, as the case of the CBF M
proposed harvest, a recommended policy option is to reduce harvest by government
regulation and promote shifts to other activities. Returning to the SAM multiplier
analysis, an analyst can evaluate the impact of such reduction on levels of production and
income distribution. An illustrative example. below, suffices to demonstrate the use of
multiplier matrix.

The wood requirement of the community was 2.535 cubic meters of timber
equivalent to 16 (2 15.34) hectares harvested of the second growth forest. Previous
analysis showed that such a harvest level causes the stock to decline by 0.07% average
annually over a 25-year period. A rational decision would be government regulation or
self-regulation by monitoring and controlling community exploitation, or to encourage
use of other non-timber products for consumption. Nonetheless, harvest of timber should
be reduced to 2,209 cubic meters, equivalent to 12 hectares of second growth forest. The
total value of timber harvest reduction is P2,349,446. This value, if intervention would be
introduced, corresponds to a reducing total production of the community. Using
multiplier analysis, the actual value reduction considering direct, indirect and induced

effects amounts to P 10,675,060.

132

Since the underlying objective is to sustain the well-being of households/
community, the reduction in income from one production activity must be translated to
increase in other activities. Thus, the subsequent SAM analysis can illustrate increases in
production in other sectors of the household/community economy to offset declines in
forest exploitation. Table 18 shows a possible scenario resulting from shifts in production
activities. This shows proportionate increases in all other activities with the decline in

forest production (assuming minimal constraint in production shifts).

Table 18. Change in production distribution resulting from external intervention.

 

 

 

 

 

 

 

 

Projected
Production Activity Values (Pesos) Production Difference Inc/ Dec % Chage
(PesosL
Agricultural Farming 35,375,061 41,568,111 6,193,050 Increase 18%
Forest Exploitation 6,905,719 3,651,683 (3,254,036) Decrease 47%
Wage Employment 5,077,387 5,966,276 888,889 Increase 18%
Retail Trading 3,072,002 3,609,812 537,810 Increase 18%
Fisheries 5,884,294 6,914,447 1,030,153 Increase 18%
Other sources 2,833,365 3,329,397 496,032 Increase 18%
Wood-based fuel 3,582,927 1,894,620 (1,688,307) Decrease 47%
CBFM 8,920,866 4,717,275 (4,203,590) Decrease 47%
Total 71,651,622 71,651,622

 

 

 

This process completes the linkage of SAM, simulation of natural resources, and
multiplier analysis. This completes a framework of natural resource accounts at the
community level. Alternative policy options to reduce harvest of timber resources
include:

Institutional arrangements may include:

- Active management and control spearheaded by the PO;

- Community reforestation to expand or accumulate natural capital; and

- Self-regulation or institute internal protection measures.

133

Govemment-supported measures or intervention:

Regulate harvest by reducing the annual allowable cut;

Provide incentives for reforestation or forest expansion;

Provide security of tenure for common-property management; and

Provide incentive for shifting to other livelihood activities.
Market measures include:

- Reduce price of timber/wood substitutes for construction, energy, and other uses;
and

- Increased prices of agricultural or non-timber forest products to promote shifts to

non-timber based livelihood.

These measures can be evaluated by quantifying and monetizing their effects in
order to be comparable with other measures. A cost-benefit analysis framework would fit

into this evaluation process.

In summary, this chapter presented results of the development of the SAM.
multipliers and simulation of natural resources. Development of the SAM framework
useful for decision- and policy-making involved three aspects. The first aspect concerns
determining the most appropriate structure of accounts that captures economic activities
in the community. Identifying and structuring of account elements are dependent on the
goals of SAM development, economic conditions, and available data. It is important to

transform data into monetary units so that account elements are comparable, and for

134

potentially linking to national accounts. The resulting SAM provides various options for

socio-economic assessment and natural resources accounting.

The second aspect concerns linking SAM to natural resources exploitation such as
timber resources. The SAM records the order of magnitude of timber resources
exploitation for one period — it is a static framework. Comparing this exploitation with
the stock and flow of timber presents a dynamic picture of the sustainability of the latter.
Dynamic information is rarely available; thus. analysts resort to modeling natural
resources. Hence, a simulation model can be developed to capture the link between
community production activities natural resource stock and flow. In this study, a
spreadsheet simulation was used to model harvest demand and natural stock and flow. At
current/proposed harvest rates, timber stocks will be declining and will not be

sustainable.

The third aspect concerns evaluating the impact of external intervention in order
to sustain natural resource stock and flow. This required conducting a SAM multiplier
analysis. The process involved segregating endogenous and exogenous accounts in the
SAM and deriving the average expenditure propensities. From these averages a Leontief-
type multiplier was developed. A multiplier measures the impact of a l-unit increase in

exogenous intervention on the endogenous accounts of the SAM.

The SAM, simulation and multiplier analysis all compose the overall framework

of natural resource accounting at the community level that is helpful not only for

135

economic profiling but decision-making as well. A number of other concerns were
observed in the process of developing the accounting framework at the community level.
These concerns are further discussed in the next chapter. Further, the next chapter
summarizes this whole study and provides further avenues for improving accounting

framework development.

136

CHAPTER 6

SUMMARY, CONCLUSION AND POLICY IMPLICATIONS

This study consisted of three parts. The first part, Chapters 1 and 2, outlined the
research problem and objectives and reviewed literature on natural resource accounting.
The second part, Chapters 3 and 4, described the conceptual basis and empirical methods
for developing a framework for community-based natural resource accounting focusing
primarily on household activities. This included developing a method of data collection.
The third part included Chapter 5, which presented data analysis and results, and Chapter

6 which summarizes results and provides policy recommendations.

Summary

The objectives of this study are to develop natural resources accounting
framework applicable at the community or village level and to link this accounting
system to sustainability of stock and flow of natural resources. The first objective focused
on incorporating natural resources exploitation into an accounts system in rural
communities, with the intent to link to a broader system of national accounts. The
underlying reason was to correct measures of economic growth that ignores the
contribution of natural resources. The second objective focused on decision-makers at the
local level and policy makers at the broader scale — how to deal with information on

impacts of production and consumption on natural resources.

137

The focus on rural households and communities emphasized the fact that this
sector of the economy subsists or depends on natural resources other than their
agriculture production. This study developed an account framework at the local level
(village or community) that captures both marketed and non-market-transacted
consumption and production output of households, particularly those related to natural

I'CSOUI'CCS.

Account framework development began with a review of a number of accounting
systems developed for industrialized and developing countries, with the end in view of
defining an account system useful at the community level. Most of the frameworks
reviewed were macro in scale involving aggregates at the national level, and they were
not linked to local accounts. Several frameworks incorporated both environmental and
natural resource accounts, but sparsely covered household transactions or activities.
Typically, household transactions include both market and non-market goods. However,
this study focused only on natural resource commodities, and did not include non-market

goods. Measurement and valuation of these goods remains a target for future work.

The conceptual framework, discussed in Chapter 3, introduced the Social
Accounting Matrix in order to capture household consumption and production activities
in rural communities. The SAM records income and expenditures from production
activities. Factors of production involve mostly family labor and indigenous capital such
as non-produced natural resources capital. However, internal and external factors

influence these economic activities. These internal factors include household

138

characteristics (mostly household demographics, labor composition, and assets),
consumption patterns, and production capacities. External factors include government
and market forces that influence household consumption and production activities. For
instance, government policies and regulations on use of natural resources can reduce or
expand production activities, while market forces such as price levels and costs of
commodity transactions affect household decisions to trade or directly consume output.
Hence, these influencing factors determine the magnitude of resources transacted in the
market and thus, recorded in conventional accounts. The SAM provides a snapshot of
these transactions that can aid policy and decision makers in introducing interventions
necessary to improve well-being in the community. A temporally extended analysis that
determines the impact of consumption and production patterns resulting from activity

linkages provides a picture of natural resource sustainability.

Developing the SAM required collecting income, consumption and production
data at the household level in the community (Chapter 4). The study covered a cluster of
5 out of 10 communities surrounding the Bicol National Park. All consolidated, the five
communities comprised 1,493 households. A sample of 20% of households was obtained
using stratified-proportional sampling. All information from the 20% sample from each
sub-community within a community was expanded and consolidated to one SAM

covering all communities sampled.

The survey method consisted of three stages: community entry and initial

interactions, focus group discussion, and finally the household survey using a

139

questionnaire designed for face-to-face interviews. The first two stages served to
conceptually diagram the economic structure of the community and refine the structure of
the survey questionnaire. The third stage was the main source of income, consumption

and production data recorded in the SAM.

Obtaining auxiliary information such as stock of natural resources in second-
growth forest required other methods of collection. Information on the stock and flow of
natural resources required resource inventory and growth-and-yield modeling that
required the same amount of effort as the survey. Hence, the stand and stock tables
developed by three POs of the community-based management program of the DENR
were used as proxies for modeling natural resources sustainability. Future studies related
to SAM development could expand to incorporate a resources inventory including non-

timber resources. Thus far, the timber resource model suffices for this study.

Chapter 5 summarized results of the SAM development. Questionnaire responses
required careful encoding, structured storage, cleaning, and consolidation. The
consolidated survey recorded fifty-one different livelihood activities. Eight were
agriculture related, twelve were forestry activities and the rest of the 31 non-land-based
activities were categorized into fisheries, retail trading and wage employment. The SAM
model aggregated these 51 livelihood activities into six major production activities
namely: agriculture, forestry, wage employment, retail trading, fisheries, wood fuel and
community-based forest management (CBF M). The Production Activities sub-matrix

disaggregated forest activities such as fuelwood production and CBFM activities for

140

purposes of evaluating the impact of these activities on natural resources. The SAM also
classified households into landholders and landless in order to determine income

distribution issues as well as its significance in evaluating natural resource exploitation.

The constructed SAM in this study resembled a conventional SAM except that the
former explicitly identifies natural capital accounts and household-bound production
outputs, and mainly based on household information. Natural capital depreciation and
accumulation accounts appeared as components of the Capital accounts, while
household-bound output accounts went into, but were distinguished from, household
expenditures on production outputs. The inclusion of natural resource
depreciation/accumulation and household-bound production outputs embodies two
purposes. One purpose was the need to determine the proportion of natural resource
exploitation that remains unrecorded in conventional accounts. The other purpose was to
evaluate the impact of household-bound production and consumption on sustainability of

natural resources.

The addition of natural resources, not traditionally marketed, into the SAM must
conform to measurement standards and valuation. Hence, all natural resources added to

the SAM were converted into monetary terms using market values (Chapter 4).

The SAM structure, with its components identified, its elements measured and

valued uniformly, allows a number of evaluation fimctions. Broadly, these functions are

economic profiling and impact evaluation. Economic profiling focused on such issues as

141

production-activity dependence, income distribution among types of households (i.e.,
among small-holders and landless — the latter comprise 25% of total population in 5
communities) and for dominant sources of consumption goods (i.e. import dependence,
market-purchased, man-made or natural). In addition, profiling can be used to evaluate if
the community is subsistence-type or integrated into the market, and types of capital
inputs used; whether it is man-made or natural capital. The snapshot model of the SAM is
well suited to these evaluation needs. The structure of the SAM largely determines the

form of evaluation.

The impact evaluation makes use of the direct and indirect linkages between
consumption, production activities and capital resources (man-made or natural), to
predict the outcomes of the latter over a longer planning horizon. These linkages transmit
changes to all account elements. These changes are determined through a multiplier
analysis by converting the SAM into multiplier matrix. Any introduction or changes in
exogenous (external) factors are assessed for their economic impacts on communities

through these multipliers.

Undertaking impact evaluation required simulating timber stock and flow. The
focus for this study was on timber resources in order to demonstrate the usefulness of the
SAM framework for these types of impact evaluation. Evaluation for other resources is
constrained by unavailability of stock and flow information that can be obtained only

through growth and yield modeling. inventory or sampling.

142

The timber stock and flow model adopted from the delos Angeles et a1 (1991)
framework evaluates yearly opening and closing stocks of timber as they are affected by
natural and man-made harvests and reductions. The net change in stock, closing, and
opening stocks at every period provides a picture of the sustainability of timber resources

over the long-term planning horizon.

Results of the simulation, considering random (hence stochastic) fire and natural
mortality, showed that the proposed harvest volume every year by the POs rapidly
depletes timber resources over the 25-year planning model. On the other hand, the
sustainable harvest suggests harvesting equivalent to the average annual growth of the
existing stand, resulting to positive net growth. Therefore, policy intervention requires
regulating harvest per hectare or reducing area harvested per year. The report of the
simulation results provides local-level decision-makers some potential impact

information on current exploitation of natural resources.

In the long-run, the impact of exploitation by the community on natural resources
depends on its rate of harvest and natural resource regeneration capacity. Three harvest
options were evaluated: (1) harvest based on total wood requirement, (2) harvest based on
preferred (proposed) harvest of 74 hectares per year, and (3) harvest based on current
annual growth. If harvest (option 2) exceeds current annual growth, the rate of
depreciation of natural resources is 4.21% in each period. If the harvest equals current
annual growth, the rate of depreciation is 0.32%. If harvest depends on current wood

requirement, the stock of timber resources still shows annual depreciation of 0.07%. The

143

resulting depreciation despite harvest at or below annual growth can be attributed to fire
damage (5.2% damage to existing timber stock) that occurred at the let year, natural
mortality and harvest damages introduced in the simulation. Therefore, critical indicators
of sustainability of natural resources include harvest levels, non-harvest reduction factors
such as natural mortality, forest fire, and current annual growth or growth and yield of
existing stock. Thus, other than the level of harvest, forest fire is a dominant factor in the

depreciation of timber stock.

Results from analysis of SAM showed that 21.3% of community output was non-
market transacted and natural resource depreciation at current wood production/
consumption was 0.07% annual average over 25 years. However, a proposed harvest of
74 hectares annually would cause a 4.21% annual average depreciation over the same
period. Production activities in five communities consisted of 27.09% natural resources

while non-marketed consumption consisted of 5.79% forest (natural) resources.

In the simple spreadsheet simulation, only the timber component of natural
resources was modeled, making an assumption that all other system resources remains
constant. In real world situation, this is not the case. Thus, a simulation model that takes

other forest system resources and linkages is proposed.

Conclusion

In conclusion, the Social Accounting Matrix framework captured economic

transactions (consumption and production activities) in rural communities including both

144

man-made (produced) and natural (non-produced) capital. Incorporating account
elements for natural resource depreciation/accumulation and non-marketed outputs
distinctly shows, and allows evaluation of, impacts of economic activities on the stock
and flow of natural resources. In addition, the use of simulation and multiplier analysis
provides a way of linking natural resources accounts with socio-economic evaluation.

Thus, the accounting framework is useful for decision-making at the community level.

The SAM brought out three important issues. First, it showed that at least 21.3%
of consumption and production are non-market-transacted; either directly consumed by
household otherwise absorbed in destinations other than markets. Second, the current
level of exploitation of natural resources reduces existing stock of natural resources.
Increasing current level of exploitation will progressively increase the rate of
depreciation. Third, because of the nature of access to resources (land tenure), rural
households shift from one production activity to another, thus, exploitation of natural

resources is dynamically linked with other livelihood activities.

The constructed SAM is a flexible framework. It can accommodate other
activities that may occur in the future or those not captured by the survey. The number of
activities can be expanded, disaggregated, or further fine-tuned in order to suit decision-
making and policy needs. The matrix can be revised to include activities relevant for
policy analysis. For example, future activities such as community reforestation can be
added to the list of activities. Another activity that concerns government is timber

poaching or illegal logging activities. Other activities related to environmental concerns,

145

such as establishment of eco-tourism sites, within the Bicol National Park may be
incorporated into the SAM with minor modifications. It may entail adding another row or
column, or even a major account on environmental concerns. The simulation model can
incorporate linkage accounts that pertain to potential soil erosion and off-site

sedimentation.

What the SAM accomplished that other account systems did not, was the option
to internalize the value of natural resources into the production technology of the
household. The value of exploitation of natural resources was added as a cost via
depreciation value. This approach effectively incorporates values of natural capital into
the account system. Hence, the issue of treating the natural resource accounts as a
satellite account at the community level is no longer necessary. The next step in the
process is to link community accounts into regional or national accounts. This may
require additional work of developing an aggregate linkage accounts with regional and

national level.

This initial attempt at developing a SAM at the village level certainly has room
for expansion. At this early stage, it is already evident that the matrix has a number of

evaluative uses for natural resources and for demographic and social questions.

Policy Implications
At the outset, natural resource accounts attempt to resolve deficiencies of

commonly used measures of growth such as GDP and National Income by including

146

natural resources into conventional accounts. Such efforts are not straightforward
additions because the issue of commonality of measures and valuation. Conventional
accounts include only market-transacted economic outputs, whereas a large part of
natural resources exploitation does not enter traditional markets. Natural resource
exploitation in rural communities remains unrecorded despite the growing dependence of
a considerable portion of developing country population on such resources. Following
that reasoning, equally large household production outputs are directly consumed that
does not enter mainstream economic transactions. Aggregate natural resource accounting
systems do not capture these rural economic transactions. Thus, a framework of natural

accounting at the community level is recommended.

This study arrived at a simple framework that relates or links household-bound
production outputs with mainstream economic accounts. The framework emanated from
a concept of household well-being that maximizes consumption of outputs from various
production activities and market transactions. Market-transactions of household partially
represent total consumption because household-bound goods are not reflected. In many
cases, household market transactions depended upon money income from various
production activities, taking into account that part of own-production are consumed at the
household level. Accordingly, natural resource exploitation reflected in conventional

accounts is incomplete, as this study showed.

The accounting framework makes use of the SAM structure in order to reflect

natural resources as factors of production employed by rural households or the

147

community. The SAM proved useful for a number of evaluation needs relating to natural
resource exploitation, whether static or dynamic. The level of dependence, income-effect,
level of market integration, and intensity of factor use can all be assessed from the SAM.
Understanding all the capabilities makes the SAM a flexible tool for accommodating

policy analysis needs. Thus, the SAM structure has important policy considerations.

Policy considerations emanating from the SAM can be divided into three classes:
monitoring and evaluation, resource sustainability, and formulating policy or market

interventions.

The SAM analysis showed that conventional accounts potentially record only
78% of actual production that uses natural resources. What are the implications of these?
The simplest interpretation means that rural communities, as expected, are not fully
integrated into the market system. As such, subsistence production is considerable, and
communities rely substantially on natural resources to substitute for commodities that
they are unable to purchase in the market because of income constraints. The SAM
becomes a useful alternative account system that provides clues and early warning of

effects on natural resources exploitation.

Policy interventions become crucial if overexploitation is evident. Alternative
courses of action revolve around sustaining the resource base in the face of continued
exploitation. A number of policy-related questions that can guide courses of action

follow:

I48

o If viewed as useful, who will develop the SAM?

If the SAM would be useful at the community level, decision-makers at the
community must devise a plan for data collection and construction of the
SAM. The frequency of collection, steps involved, type of data, number and
type of sampling to employ will depend on the analysis required by the
community. Implementing these activities depends on the motivation for
doing so. Unless members of the community see the importance of natural

resource accounting, the SAM remains simply a theoretical construct.

The framework provides a mechanism for communities to know the status
of their resources. A yearly accounting will provide information on the trend
of various indicators such as harvest, consumption, household-bound goods,
and those that integrate into the market. If the community stakeholders are
convinced about the issue of sustainability, critical indicators will be
important to them. The SAM can be structured in a way that community
decision-makers can readily extract information about the indicators of

resource sustainability.

o Is the SAM helpful in identifying market and policy failures at the

community level?

149

The SAM provides a static picture of the economic situation in the
community. In order to evaluate trends of economic performance, such a
matrix must be renewed at pre—determined intervals. The interval may be
dictated by implementation of certain projects or programs, so the SAM
could be constructed at the start and end of program implementation. Ideally,
yearly data collection provides adequate decision-making information to

monitoring progress of community programs.

Disaggregating account elements in the SAM (i.e., factors of production and
their sources - natural, man-made, or imports - capital accounts, and
institutional recipients and such as households or income groups) would
provide clues on the policy or market failures. In the factors of production
accounts, propensity to use family labor or natural capital from open-access
resources demonstrate inequality of market wage rates and rents for use of
natural capital, respectively. In capital accounts, high propensity to use
natural capital versus man-made capital exhibits propensity to capture natural
resources rent. A high degree of dependence by landless households on
natural resources would suggest the same. These situations can be shown in

the SAM depending on how it is structured.

Will households shift to market commodities if it increased their income or if

prices of market commodities were subsidized?

The answer to this question depends upon how the community would
respond to the market, the opportunity costs that households face, and the
price trend of natural resource over time. An increasing demand price for
natural resources will increase exploitation, possibly beyond recovery as

prices rise.

It was shown in the SAM that higher income households have relatively
higher proportion of market purchases. If this is statistically significant

remains to be analyzed.

0 Does land tenure or ownership have an impact on the exploitation of natural

resources?

This question arises because of the transfer of management of second-
growth forest to community organizations. The SAM reported that landless
households, relative to small-holder households, have higher natural
resource consumption not transacted in the market. This suggests a lack of
opportunities for landless households, giving them more incentive to access
public lands for “free resources.” Transfer of management as common pool

resource potentially encourages self-regulation of these "free access."

0 How can non-marketed natural resource exploitation be incorporated into

broader accounts such as the regional or national accounts? If it is possible to

151

incorporate, should the conventional accounts be revised upward as a result

of inclusion of household-bound production outputs?

Rural communities' exploitation of natural resources is systematically
ignored in regional and national accounts. These accounts reflect mostly
transactions by business establishments such as logging companies, mills and
integrators, and government forestry activities. SAMs developed for rural
communities could be incorporated in a number of ways. One approach
would create a separate rural community sector in the listing of
establishments. Another approach is to disaggregate forestry accounts and
include rural household natural resources exploitation activities or household

production activities.

These policy-related questions could be subject of subsequent studies related to
SAM development at the community level. They could not be covered by this study due

to some limitations listed in the next section.

Limitations
The survey conducted only partially contributed to the development of a full SAM
because it was confined to households. SAM construction often includes transactions by
other institutions (e.g., NGOs, churches etc.) government employment and linkages
between communities. According to Taylor and Adelman (1996), these data need

required extension of data collection to a minimum of one year.

152

In natural resources modeling or simulation, efforts were focused on timber
resources. As explained in Chapter 4, assessment of non-timber forest resources requires
considerable amount of time — more than possible with the survey conducted. Further.
lacking empirical data on fire damages, natural mortality, growth and yield functions, a
method referred to as "data transfer" was employed. It simply means that research results
from areas other than the study sites were used as parameters in the simulation. These
parameters may not reflect real conditions of the research site so caution must be
exercised in viewing the depletion results. But the overexploitation concern has been

raised.

The SAM, like other input-output models, has several inherent limitations. First,
relationships among production, factors and income distribution are linear —
proportionate relationships. This construction does not take into consideration dynamic
changes in price and income elasticities. Second, the SAM is a static framework. All
exogenous injections cycle through the rounds of impact based on the original base
matrix, assuming no changes over time. Third, the resulting matrix of multipliers is what
developers called "accounting multipliers" as opposed to fixed price multipliers. The
difference between the two lies in the assumption for the former that income elasticity is
constant — the multiplier was derived from average propensities for expenditure rather

than the marginal propensities for expenditures.

Finally, the household survey instrument, despite its length, could not cover time

and motion studies in order to calculate household time and labor used for their

153

production activities. The bulk of the household survey focused on consumption,

production and demographic characteristics. Thus, continuance of similar types of studies

needs to re-evaluate the structure of the questionnaire. Hence, this study recommends a

number of revisions for future studies.

Recommendations for Future Studies

Based on the experiences of conducting this study, the following suggestions

target improvement of future studies:

1.

Expand SAM construction by incorporating activities of institutions other than
household production and consumption. This will include government institutions,
details of small- and medium- scale industries, and more details on external
transactions of the community;

Continue the study in the same area by including a resources assessment or inventory;
Focus more on linkages between communities, i.e., inter-community trade;

Examine the need to disaggregate a number of livelihood or production activities;
Consider extending the multiplier analysis based on marginal propensities for
expenditures;

Transform the SAM analysis into a dynamic model by conducting a computable
general equilibrium analysis.

Enhance resource modeling by including other non-timber resources exploited by the

community; and

8. Consider some refinements in the simulation by incorporating precise data on fire

damage and natural mortality.

155

LITERATURE CITED

Abaza, H. (editor). 1992. The present state of environmental and resource accounting
and its potential application in developing countries. UN Environmental
Economics Series No. 1, United Nations, New York, USA.

Acharya, M. 1982. Time use data and the living standards measurement study. Living
standards measurement study Working Paper No. LSM [8 World Bank.

Alocilja, E. C. 1990. Process Network Theory. In Proceedings of the I 990 IEEE
International Conference on Systems, Man, and Cybernetics, 4-7 November 1990,
Los Angeles, CA, pp. 66-71.

Appendini, K., M. Nuijten, and V. Rawal. I999. Rural household income strategies and
interactions with the local institutional environment: a methodological
framework. Sustainability Dimensions
http://www.fao.org/waicent/faoinfo/sustdev/ROdirect/ROan0021 .htm
(downloaded 5-31-2000)

Atkinson, G., W. R. Dubourg, K. Hamilton, M. Munasinghe, D. W. Pearce, C. Young.
1997. Measuring Sustainable Development: Macroeconomy and Environment.
Edward Elgar Publishing Cheltenham, UK.

Ayers, R.U. and AN. Kneese. "Production, Consumption, and Extemalities," American
Economic Review, (59:3), June 1969. pp. 282-297.

Bann, C. 1998. The economic valuation of tropical forest land use options: a manual for
researchers. Economy and Environment Program for Southeast Asia (EEPSEA),
Tanglin, Singapore.

Barbier, E. B. 1994. Valuing environmental functions: tropical wetlands. Land
Economics, 70: 155-173.

Barbier, E. B. and R. Lopez. 1998. Debt, poverty and resource management in a rural
smallholder economy. Paper prepared for the World Congress of Environmental
and Resource Economists, Venice, 25-27 June 1998.

Bartelmus, P. 1993. Environmental statistics and accounting. Chapter II in A.
Markandya and C. Costanza ,editors, Environmental Accounting: A Review Of
The Current Debate, United Nations Environment Programme (UNEP)
Environment And Economics Unit (EEU) Environmental Economics Series Paper
No. 8. Harvard Institute for lntemational Development, USA.

Bartelmus, P., C. Stahmer, and J. van Tongeren. 1993. Integrated environmental and
economic accounting: a framework for an sna satellite system. In: Lutz, E. (ed.)

156

Toward Improved Accounting for the Environment. A UNSTAT - World Bank
Symposium. World Bank. Washintong DC, pp.45- 65.

Bartelmus, P., E. Lutz, and S. Schweinfest. 1992. Integrated environmental and
economic accounting: a case study for Papua New Guinea. Environment
Working Paper No. 54. The World Bank, Washington, DC, USA.

Becker, GS, 1965. A theory of the allocation of time. The Economic Journal,
75(299):493-517.

Beckerman, W. 1994. "Sustainable development': is it a useful concept?" Environmental
Values. 3: 191-209.

Bratkovich, S (undated). Green certification. USDA Forest Service Northeastern Area
State & Private Forestry. http://willow.ncfes.umn.edu/Steve/gmcert.htm
(downloaded 10-10-2000).

BREDCI, I991. Plano Para Sa Pagpauswag Asin Pagmanehar Kan Mga Rekursus Sa
K omunidad Kan C F P Sa Presentacion (A development and management plan for
community resources in the C FP, Presentacion). A copy of the document
submitted to the Department of Environment and Natural Resources, Diliman,
Quezon City, Philippines.

Bureau of Economic Analysis, 1994. Accounting for mineral resources: Issues and BEA’s
initial estimates. Survey of Current Businesses, April 1994.

Bureau of Economic Analysis, 1994. Integrated economic and environmental satellite
accounts. Survey of Current Business, April 1994.

Bureau of Economic Analysis, 2000. Accounting for renewable and environmental
resources. Survey of Current Businesses, March 2000.

Bureau of Economic Analysis, 2000. Accounting for subsoil mineral resources. Survey of
Current Businesses, February 2000.

Cervigni, R. 1998 (Unpublished). Subsistence needs, non-farm employment and tenure
conflicts: predicting land use change in Mexico using dynamic stock- flow
modelling techniques. Draft of paper for presentation to the World Congress of
Environmental and Resource Economists. Venezia, Italy, June 25-27, 1998

Commission of the European Communities, lntemational Monetary Fund, Organization
for Economic Cooperation and Development, United Nations, and World Bank,
1993. System of National Accounts I 993. Brussels/Luxembourg, New York, Paris,
Washington, DC.

Costanza, R. and H. E. Daly. 1987. Toward an ecological economics. Ecological
Modelling 38: l-7.

Costanza, R., I. Cumberland, H. Daly, R. Goodland, and R. Norgaard. 1997. An
Introduction To Ecological Economics. St. Lucie Press, Boca Raton, Florida,
USA.

Darmstadter, J., 2000. Greening the GDP: Is it desirable? Is it feasible? In: Resource
Spring 2000 Issue I 39. Resources for the Future pp.l l-15.

de Guzman, G. G. 1991. Natural resource accounting and system of national accounts. A
technical paper presented at the Natural Resource Accounting Project Final
Workshop, National Institute of Geological Sciences, UP Diliman, Quezon City,
October 15, I991. 29 p.

Defoumy, J. and E. Thorbecke. 1984. "Structural path analysis and multiplier
decomposition within a social accounting matrix framework." The Economic
Journal 94: l 1 l-l36.

Delos Angeles, M. S. 1995. Integrating socio-economic and environmental policies: a
cursory review. Paper presented at the IEMSD Workshop, August I, 1995, DENR
Quezon City Philippines.

Department of Environment and Natural Resources, United Nations Development
Program and National Economic Development Authority. 1996. A Case Study on
the Compilation of Natural Resource Accounts in the Philippines. Quezon City
Philippines.

Department of Environment and Natural Resources. 1991. The Philippine Natural
Resources Accounting Project (ENRAP-Phase 1) Executive Summary
(Photocopied)

Ehui, S. K. and D. S.C. Spencer, 1993. Measuring the sustainability and economic
viability of tropical farming systems: a model for sub-saharan africa. Ag. Econ
9:279-296.

El Serafy, S. and E. Lutz. 1989. Environmental and resource accounting: an overview.
Pages l-7 in Y. J. Ahmad, S. El Serafy, and E. Lutz, editors, Environmental
Accounting For Sustainable Development. The World Bank, Washington, DC,
USA.

ENRAP 4 (Author unspecified) Detailed work plan: Environmental and Natural
Resources Accounting Project Phase IV. (printed copy of electronically acquired
material).

Francisco, H. A. 1991. Application of the proposed valuation framework to watershed
resources. Natural Resources Accounting Project Final Workshop Tech Rep. 9.
National Institute of Geological Sciences, U.P. Diliman, Quezon City, Philippines
Oct. 15,1991.

158

Friend, A. M. and D. J. Rapport. I990. The evolution of information systems for
sustainable development. Occasional Paper No. I . Institute for Research on
Environment and Economy, Ottawa, Canada.

Friend, AM. 1993. Feasibility of environmental and resource accounting in developing
countries. Chapter IV In: A. Markandya and C. Costanza ,editors, Environmental
Accounting: A Review Of The Current Debate, United Nations Environment
Programme (UNEP) Environment And Economics Unit (EEU) Environmental
Economics Series Paper No. 8. Harvard Institute for lntemational Development,
USA.

Friend, Anthony M. and David J. Rapport. 1991. "evolution of macro-information
systems for sustainable development," Ecological Economics 3:59-76.

Gale, R. P. and S. M. Cordray, 1991. "What should forests sustain? Eight answers." J.
For. May 1991.

Grambsch, A. E., R. G. Michaels, and H. M. Peskin. 1993. Taking stock of nature:
environmental accounting for Chesapeake Bay. Pages 184-197 in E. Lutz, editor,

Toward Improved A ccounting for the Environment. A UN Stat-World Bank
Symposium, IBRD-World Bank, New York, USA.

Grootaert, C. 1982. The conceptual basis of measurement of household welfare and their
implied surveys data requirements. Living Standards Measurement Stuay'
Working Paper No. LSM I 9 World Bank.

Grosh, M. E. and P. Glewwe, 1995. A guide to living standard measurement surveys and
their data sets. LSMS Working Paper No. I 20. The World Bank. Washington DC.

Hartwick, J.M., 1990. "Natural resources, national accounting and economic
depreciation ", Journal of Public Economics, 43:291-304.

Hawrylyshyn, O., 1976. "the value of household services: a survey of empirical results,"
Review of Income and Wealth, (1976): 101-132.

Hecht J. E. and H. M. Peskin, 1993. Natural resource accounting in the developing world:
a neoclassical approach: a summary. Summary of a paper by the same title
presented at the Committee of International Development Institutions on the
Environment (C IDIE) Workshop on Environmental and Natural Resources

accounting, United Nations Environment Programme, Nairobi, Kenya, February
24-26, 1992.

High Performance Systems, 1996. STELLA 3.0.7 Student Authoring Version. Mac2Win
Porting Technology, Altura Software Inc.

Hoffren, J. 1997. Finnish forest resource accounting and ecological sustainability.
Tutkimuksia F orskningsrapporter Research Report 224, Helsinki, Finland.

159

Hueting, R., P. Bosch, and B. de Boer, 1992: Methodology for the calculation of
sustainable national income. Chapter V. In A. Markandya and C. Costanza (eds),
Environmental accounting: a review of the current debate, United Nations
Environment Programme (UNEP) Environment And Economics Unit (EEU)
Environmental Economics Series Paper No. 8. Harvard Institute for lntemational
Development, USA

Hufschmidt, M., D. James, A. Meister., B. Bower and J. Dixon. 1983. Environment,
natural Systems, and Development: an Economic Valuation Guide, Baltimore:
Johns Hopkins University Press.

lntemational Resource Group, Edgevale Associates, and Resources, Environment and
Economics Center for Studies, 1996. The Philippine Environmental and Natural
Resources Accounting Project. Main Report Phase 11]. Resource, Environment
and Economics Center for Studies. Quezon City, Philippines

lntemational Union for Forestry Research Organizations (IUFRO), 1997 "Recent
developments in accounting and managerial economics for an environmentally-
friendly forestry" presented in the final session of the International IUFRO -
INRA Symposium by Prof. Maurizio Merlo. Nancy, France, 21-23 April 1997 p 5.

lRG/Edgevale/REECS. I996. ENRAP (Environmental and Natural Resources
Accounting Project) I 11 main report. Report prepared for the Department of
Environment and Natural Resources and the United States Agency for
lntemational Development, lntemational Resources Group, Ltd., Washington,
DC; Edgevale Associates, Virginia. USA; and Resources, Environment and
Economics Center for Studies, Inc., Quezon City, Philippines.

James, H. S, Jr., 1996. "The valuation of household production: How different are the
opportunity cost and market price valuation methods?" working paper #ewp-
mic/9612001, Economic Working Paper Archive,. University of Hartford.

JObstl, H., J. Hogg. 1998. On the state of forest accounting in some European countries.
In: Recent Developments In Accounting And Managerial Economics For An
Environmentally-Friendly Forestry. lntemational IU FRO - [NRA Symposium,
Nancy. 21 - 23 April 1997.

Keuning, S. and Ruijter, W. -l988 Guidelines to the construction of a social accounting
matrix. Review of Income and Wealth, 34(1):7l-101.

Kiekens, J. P., 1999. Forest certification, Part II: Impacts on forestry, trade and consumer
information. Engineered Wood Journal - Spring 2000 Edition.
http://sfcw.org/forest_certification_part2.htm (downloaded 10-10-2000).

King, Dennis M.. Curtis C. Bohlcn and Pierre R. Crosson, 1995. "Natural resource
accounting and sustainable watershed management: With illustration for the upper
mississippi river watershed," A Report for the President's Council on Sustainable
Development, UMD Ref. No. UMCEES CBL-95-037, February 1995

160

Leefers, LA. and GB. Castillo. I998. Bridging the gap between economics and ecology.
Conservation Ecology [online] 2(2): 19.
http://www. consecol.org/J oumal/v012/ issZ/art 1 9/

Lopez-Gonzaga, V. B., 1994. People initiated environmental education, rehabilitation and
conservation: a case study of Cauayan, Negros Island, Philippines SEAMEO—
Jasper Fellowship Monograph, 1994 Series 2
In:http://www.seameo.org/vl/library/dlwelcome/publications/ebook/jasper/mono9
4.htm downloaded January 05, 2001.

Lutz, E. 1993. Toward improved accounting for environment: an overview. Pages 1-14
in E. Lutz, editor, Toward Improved A ccounting for the Environment. A UN Stat-
World Bank Symposium, IBRD-World Bank, New York, USA.

Lutz, E. and S. El Serafy, 1988. Environmental and resource accounting :an overview.
Policy Planning and Research Staff World Bank Environment Department
Working Paper No. 6. Washington, DC.

Maler, KG. 1992. "Production function approach in developing countries." In: Vincent,
J.R., Crawford, E.W. and Hoehn, J.P. (eds.) Valuing Environmental Benefits in
Developing Countries. Special Report 29. Michigan State University.

Maler, KG. 1991. National accounts and environmental resources. Environmental and
Resource Economics, 1 : 1-15.

Markandya , A. and C. Perrings. 1993. Accounting for an ecologically sustainable
development: a summary. Chapter I in A. Markandya and C. Costanza ,editors,
Environmental Accounting: A Review Of The Current Debate, United Nations
Environment Programme (UNEP) Environment And Economics Unit (EEU)
Environmental Economics Series Paper No. 8. Harvard Institute for lntemational
Development, USA.

Miller, RE. and PD. Blair, 1985. Input-Output Analysis: Foundations and Extensions.
Prentice-Hall, Inc. Englewood Cliffs, New Jersey.

Munasinghe, M.and E. Lutz. 1991. Environmental-economic evaluation of projects and
policies for sustainable development. The World Bank Sector Policy And
Research Staff Environmental Working Paper No. 42. (See also Peskin and
Peskin 1978).

Nordhaus, W. and J. Tobin. 1972. Is growth obsolete? In: Economic Growth, National
Bureau of Economic Research General Series #96E. Columbia University Press,
New York, New York, USA.

Organization for Economic Cooperation and Development, 1995. Environmental
Accounting for Decision-making. OECD Working Papers n0. 65. Paris 1995.

161

Perman, R., Y. Ma, and J. McGilvray. Natural Resource & Environmental Economics,lst
Ed. London: Addison Wesley Longman Ltd, 1998.

Peskin H M. 1998. Alternative resource and environmental accounting approaches and
their contribution to policy. In: Environmental Accounting in Theory and
Practice, pp. 375-394, edited by K Uno and P Bartelmus Dordrecht: Kluwer
Academic Publishers. 459 pp.

Peskin H., W. Floor, and D. Barnes. 1992. Accounting for traditional fuel production: the
household energy sector and its implications for the development process.
Industry and Energy Department, Operations Division, The World Bank. October
1992.

Peskin, H. 1989. Environmental and non-market accounting in developing countries.
Pages 59-64 in Y. J. Ahmad, S. El Serafy, and E. Lutz, editors, Environmental
Accounting For Sustainable Development. The World Bank, Washington, DC,
USA.

Peskin, H. 1989. Environmental and non-market accounting in developing countries. In
Ahmad, Y. J ., S. E. Serafy, E. Lutz. 1989. Environmental Accounting For
Sustainable Development: Selected Papers from Joing UNEP World Bank
Workshops. p 59-64.

Peskin, H. M. 1993. Sustainable resource accounting. Paper prepared for the
International Expert Meeting on Strategies for Sustainable Resource Management

and Resource Use, Noordwijk, The Netherlands, June 3-4, 1993.

Peskin, H. M. 1996. Alternative resource and environmental accounting approaches and
their contribution to policy, paper prepared for the F ondazione Eni Enrico Mattei
and presented in Beijing, China and Tokyo, Japan. Published as Nota di Lavoro
77.96 (November).

Peskin, H. M., and E. Lutz. 1990. A survey of resource and environmental accounting in
industrialized countries. Environment Working Paper Number 3 7. The World
Bank, Washington, DC, USA.

Peskin, Henry. 1991. "Accounting for Natural Resources Degradation in Developing
Countries." In: Vincent, J.R., Crawford, E.W. and Hoehn, J .P. (eds) Valuing
Environmental Benefits in Developing Countries. Special Report 29. Michigan
State University.

Pezzey, John CV. (1992): "Sustainable Development Concepts: An Economic Analysis",
World Bank Environment Paper No. 2. Washington, DC: World Bank, November.

Prudham, W. S. and S. Lonergan. 1993. Natural resource accounting (1): a review of
existing frameworks. Can. J. of Regional Science 16(3):363-386.

I62

Prudham, W. S. and S. Lonergan. 1999. Natural Resource Accounting (11): Toward the
development of a Regional Model. Can. J. of Regional Science. l6(3):387-412.

Prugh, T. 1995. Natural capital and human survival. lntemational Society of Ecological
Economics Press, Solomons, New York, USA.

Pyatt, G. and J. 1. Round, eds. (1985). Social Accounting Matrices: A Basis for Planning.
Washington, DC: The World Bank.

Pyatt, G. and J.I. Round. 1985. Accounting and fixed-price multipliers in a social
accounting matrix framework. Chapter 9 In Pyatt, G. and J. I. Round, eds. (1985).
Social Accounting Matrices: A Basis for Planning. Washington, DC: The World
Bank.

Rapport, D. and A. Friend 1979. Towards a comprehensive framework for environmental
statistics: a stress response approach. Statistics Canada, Ottawa

Repetto, R., W. Magrath, M. Well, C. Beer, and F. Rossini. 1989. Wasting assets: natural
resources in the national income accounts. World Resources Institute,
Washington, DC, USA.

Ruddle, K. and D. A. Rondinelli. 1983. Transforming natural resources for human
development: a resource systems framework for development policy. Resource
systems theory and methodology Series, no. 1 The United Nations
University,http://www.unu.edu/unupress/unubooks/80469e/80469E00.htm#Conte
nts (downloaded 3-29-99)

Rylander, J. C. 1996. Accounting for nature: a look at attempts to fashion a "green
GDP". Renewable Resources Journal 14 (2):8-13.

Saama, P. M., M. A. Schipull, and E. Alocilja. I990. Utilization of the process network
theory in the analysis of a beef feedlot system. Am. Soc. Agric. Engineers. St.
Joseph, MI: The Society. Winter 1990. Paper No. 90-7575.

Saxena, R., and R. Agrawal. 1997. Socio-eco-environmental accounting: a proposed
framework for tree growers’ co-operatives with a cast study. Institute of Rural
Management Anand Working Paper no. 110.

Schweitzer, J. 1991. "Economics, conservation, and development: A perspective from
USAID." In J. R. Vincent, E. W. Crawford, and J. P. Hoehn, eds., Valuing
Environmental Benefits In Developing Countries. Special Report 29, Michigan
State University, Agricultural Experiment Station, East Lansing, Michigan.

Shaw, W.D. 1992. Searching for the opportunity cost of an individual's time. Land
Economics 68: 107-15.

163

Shields, M.D., B. P. Thoman-Slayter, and Clark University, 1993. Gender, class,
ecological decline, and livelihood strategies: A case study of Siquijor Island, the
Philippines. Ecogen Case Study Series. Clark University, Worcester , MA.

Solorzano, R.; de Camino, R.; Woodward, R.; Tosi, J.; Watson, V.; Vasquez, A.;
Villalobos, C.; Jimenez, J .; Repetto, R.; Cruz, W. 1991. Accounts overdue:
natural resource depreciation in Costa Rica. Tropical Science Centre, San Jose,
Costa Rica, and World Resources Institute, Washington, DC, USA.

Statistics Canada, 1997. Econnections: Linking the Environment and the Economy;
Concepts, Sources and Methods of the Canadian System of Environmental and
Resource Accounts. Catalogue no. l6-505-GPE., Ontario.

Statistics Canada. 1990. A framework for environmental statistics. (Draft). Environment
and Natural Resource Section, Statistics Canada, Ottawa, ON, Canada.

Stone, R. 1985. "The disaggregation of the household sector in the national accounts."
Chapter 8 In Pyatt, G. and J. 1. Round, eds. (1985). Social Accounting Matrices: A
Basis for Planning. Washington, DC: The World Bank.

Taylor, J. E. and l. Adelman, 1996. Village Economies. New York, Cambridge University
Press.

Theys, J. 1989. Environmental accounting in development policy. In Y. J. Ahmad, S. El
Serafy, and E. Lutz, editors, Environmental accounting for sustainable
development. The World Bank, Washington, DC, USA.

Theys, J. 1989. Environmental accounting in development policy: the French experience.
In Ahmad, Y. J. S. El Serafy, and E. Lutz, eds. 1989. Environmental Accounting
for Sustainable Development. UN Environmental Program. World Bank.
Washington DC. Pp 40-53

UN Commission on Sustainable Development, 1996. Measuring and capturing forest
values: issues policies and challenges. Program Element [1].] (b), Scientific
Research. Forest Assessment and Development of Criteria and Indicators for
Sustainable Forest Management. Ad Hoc lntergovemmental Panel on Forests
Third Session, September 9-20, 1996

United Nations, 1993. Integrated Environmental and Economic Accounting. Handbook of
National Accounting. United Nations New York, Series F, No. 61 p. 25 .

United Nations. 1993. Integrated environmental and economic accounting: interim
version. Studies in Methods. Handbook of National Accounting, Series F, No. 61.
United Nations Publication, New York, New York, USA.

United Nations. 1984 Framework for the development of environment statistics. Statistics
Paper, Series M, No. 78 New York: United Nations. 28pp.

164

United Nations. 1991. Concepts and methods of environment statistics: statistics of the
natural environment. Studies in methods, Series F, No. 57 New York: United
Nations. 159 p.

Van Kooten, G. Comelis, 1993. Land Resource Economics and Sustainable
Development. Vancouver: UBC Press

Vincent, J. F. and J. H. Hartwick. 1997 (unpublished report). "Accounting for the benefits
of forest resources: concepts and experience. A report for the FAO Forestry
Department. Harvard Institute of International Development," revised draft July
1997

Vincent, J. R. 1998. "Theoretical aspects of forest accounting." Development Discussion
Paper No 625 Harvard Institute of lntemational Development 24 p.

Watershed-Based Needs Accounting. http://www.epa.gov/owm/wtr.htm

William D. Nordhaus and Edward C. Kokkelenberg, (eds). 1999. Nature's numbers:
Expanding the national economic accounts to include the environment. Executive
Summary. Panel on Integrated Environmental and Economic Accounting,
Committee on National Statistics Commission on Behavioral and Social Sciences
and Education National Research Council. National Academy Press, Washington,
DC. 1999

Xu, Zhi, Bradley D.P., Jakes, P.J., 1995. Measuring forest ecosystem sustainability: a
resource accounting approach. Environmental Management 19(5): 685-692.

Young, M. 1993. Natural resource accounting: some Australian experience and
observations. Pages 177-183 in E. Lutz, editor, Toward Improved Accounting for
the Environment. A UN Stat- World Bank Symposium, IBRD-World Bank, New

York, USA.

G LOSSARY

Accumulation Accounts - this are flow accounts that record the acquisition and disposal
of financial and non-financial assets and liabilities by institutional units
through transactions and as a result of other events. Include capital
accounts, financial accounts and changes in volume of assets accounts and
revaluation accounts (UN, 1993).

Balance Sheets - show the value of stocks of assets and liabilities held by institutional
units or sectors at the beginning and end of the accounting period (un,
1993)

Current Accounts - this account record the production of goods and services, the
generation of incomes by production, the subsequent distribution and
redistribution of incomes among institutional units, and the use of incomes
for purposes of consumption or saving (UN, 1993).

Current cost accounting - best approximation of opportunity cost accounting. Assets and
goods used in production are valued in their actual or estimated current
market prices at the time the production takes place. Also described as
replacement cost accounting (UN, 1993).

Distribution and Use of Income Accounts - (see SNA, 1993) - consist of articulated set of
accounts showing how incomes are: Generated by production; Distributed
to institutional units with claims on the value added created by production
Redistributed among institutional units, mainly by government units
through social security contributions and benefits and taxes; Eventually
used by households, government units or non-profit institutions serving
households (N PISHs) for purposes of final consumption and saving.

Economy - is a general equilibrium system in which interdependent economic activities
involving countless transactions between different institutional units are
carried out simultaneously. Feedbacks are continually taking place from
one type of economic activity to another. (SNA, 1993).

Full cost accounting - is life-cycle costing. Life-cycle costing is a method in which both
private and social costs are identified with the product, process or activity
throughout its commercial life, from raw material acquisition to disposal
(Adopted from: Martin Spitze, Robert Pojasek, Francis Robertaccio,
Judith Nelson. Accounting and Capital Budgeting for Pollution
Prevention, 1993.) Ref: United Nations Conference on Trade and
Development, 1994. Accounting for Sustainable Forestry Management: A
Case Study. United Nations Publication. UN Geneva pp 7.

166

Gross domestic product (GDP) is the value of final goods and services produced in the
economy (Note: defensive expenditures for environmental degradation or
pollution are not reflected in the GDP).

Gross value added - the value of output less the value of intermediate consumption and is
a measure of the contribution to GDP made by an individual producer,
industry or sector. GVA is carried forward into the Distribution of Income
Accounts.

Historic cost accounting - requires goods or assets used in production to be valued by the
expenditures actually incurred to acquire those goods or assets, however
far back in the past those expenditures took place.

Imputed value or cost - when goods or services are retained for own use, no transactions
with other units takes place. In order to record the goods or services in the
accounts, internal transactions have to be imputed whereby producers
allocate the goods or services for their own consumption or capital
formation and valued have to be estimated for them. The purpose of
imputation is to capture in the accounts major flows of goods and services
actually taking place in the economy that would otherwise be omitted.

Opportunity cost, that is, the cost of using, or using up, some existing asset or good in
the particular process of production is measured by the amount of benefits
that could have been secured by using the asset or good in alternative
ways. It is calculated with reference to the opportunities foregone at the
time that asset or resource is used, as distinct from the costs incurred as
tome time in the past to acquire the asset.

Production Accounts - this account records the activity of producing goods and services
as defined within the system. Its balancing items is gross value added.

System of National Accounts - consist of a coherent, consistent and integrated set of
macroeconomic accounts, balance sheets and tables based on a set of
internationally agreed concepts, definitions, classifications and accounting
rules. It provides an accounting framework within which economic data
can be compiled and presented in a format that is designed for purposes of
economic analysis. decision-making and policy-making. The SNA records
flows and stocks (SNA, I993)

167

APPENDIX A

Appendix to Chapter 3

168

Appendix A: Appendix to Chapter 3

A. I. The Household Market Expenditures (Purchase) Function

This section elaborates on the market expenditures equation (Equation 2)
described in the first section of Chapter 3 where:

2PM.MC. = EPA,(A,) + ZPF,(F,) +21, - (wL + PKK + c)
Total agriculture (A) and forest (F) production can be represented as follows:

A=AC+AS+AK

F=Fc+ Fs+ FK
Therefore,

A,=A- Ac-AK

F5: F- Fc-FK

Hence, market expenditures equation above can be expanded as follows:

ZPMiMcr = 2PA1(Ai‘Ac‘AK) + ZPFi(Fi'Fc'FK) +21: ‘ IW(LA+LF+LI) + PKK + C]
Where:

PM, = price of market good i consumed by household

Me. = market good i purchased

PA. = price of agricultural product i produced

PF, = price of forest product i extracted/produced/harvested

PK = price of capital goods purchased for production activities

169

Agriculture or forest production and consumption consist of various commodities

so that Ac, Fc, AK, and F K actually composed of several commodities i. In which case,

A, and Fc = ACl and Fe, = Agricultural good i and Forest good i consumed,
respectively

AK and FK = AK, and FK, = Agricultural good i and Forest good i used as capital,
respectively

A and F = A. and F, = total output of agricultural commodity i and forest good i

extracted/produced/harvested, respectively.

Likewise, labor and capital consist of various categories so that:

L = L A, LF_ L1 = LH~ hired labor used for agriculture, forest and other livelihood
activities

K = AK, PK, and MK = capital goods produced/purchased used in production from
agriculture, forest, or market purchased, respectively

w = wage rate for labor

I = other livelihood or sources of income

i = represents specific commodity

c = other costs of production activities, or purchased inputs of production, and

may include savings needs
This expansion of Equation (2) in chapter 3 provides the basis of valuation of

various uses of outputs in of production.

170

A.2. Measurement of Natural Resources, and Non-Marketed Consumption

This section discusses simple procedures to measure production outputs and their

various destinations.

Measurement of Natural Resources Directly Consumed by Households

Equation (6) in Chapter 3 presented output of each production activity. The
proportion of natural resource consumption compared with rate of resources extraction
partly addresses the rate of depreciation of resources. To assist in this, a three-step
procedure segregates production activities. market and non-market transacted outputs,

and isolates natural resources used.

1. Ratio of Production Activitv to Togl Production. The ratio of monetary values
of each production activity to total production value reveals the intensity (y) of

each production activity:

i P... (n. >

.Yn==‘__——_—’—

RH h
where:
i= 1,...a, commodity
n = agriculture (A), forestry (F) , or other livelihood activities (I)
h = hth household

SothatyA+yF+yl=l

171

These ratios are useful coefficients for determining intensity of agricultural,
forestry or other livelihood activities. Any changes introduced by external factors

potentially shifts intensity of production activity.

2. Production outputs retained by household for consumption and invested in
own-production or other production activities compose the non-marketed
component of production. These values (using market price) divided by the
value of total production estimates the ratio of non-marketed outputs to

production:

(2
Z Pm. (nu. + n + n, )
i=1

 

r,, - ratio of non-market-transacted production
RH h
output to total household production.
where:

i= 1,...a, commodity
n = agriculture (A), forestry (F) , or other livelihood activities (I)
h = hth household

RH, = total value of production of household h

However, ra+ r, + r,< l, where r represents ratio of non-marketed production
output to total production, and the subscript a. f and I represent agriculture
forestry and other livelihood outputs, respectively. Thus, 1- (r,,+ r/ + r,)

represents the ratio of marketed component of production.

172

3. Ratios of natural resources sold and directly consumed completes the

accounting of natural resource exploitation.

The ratio of natural resources consumed or used for other production activities
(calculated using this three-step process) to total consumption and intensity of production

activity partially explains the state of natural resources and its sustainability over time.

A.3. Mathematical Model of Household Decision to Shifl Production Activities

Predicting the pattern of production activity shifts between three production
options - agriculture, forestry, and non-land based production — provide altematjve
approaches to estimation of natural resource use over time. The income-expenditure
identity equation, that represents the decision function for the household to shift
production, provides the framework in this approach. Under a condition of inequality of

the expenditure-receipts function (Equation 3 of Chapter 3):

sziMcr + (WL + PKK + C) = ZPAkAs) + ZPFI(F5) +21.

From the Receipt side:

The value of marginal product (MVP) of inputs of production alternatives

provides logical basis for making production choices. VMP is simply translated as

the value of a marginal unit of the output by employing a particular input. The

173

value of marginal product (MVP) from Agriculture, Forestry or other production
activities:

VMPn : Pm(."r)
where n refers to agricultural (A), forestry (F) or other production activities (I).
The right-hand-side refers to per unit value of output by employing a particular

input in a production activity.

Three different conditions mays arise so that household decisions under
three different conditions are:
0 VMPA and VMP, < VMPF, household will shift resources to forest exploitation
o VMPA and VMP}: < VMPI, household will shift resources to other livelihood
activities

0 VMPI and VMPI. < VMPA, household will shift resources to agricultural production.

The three conditions show that differences in marginal value product
determine the choice and intensity of a production activity. However, the
household conducts production activities so that the identity equation holds, thus,
they may have primary and secondary production activities to meet minimum
basic needs. Hence, a minimum combination of production activity exists, i.e.
agriculture and forest, forest and other livelihood or agriculture and other
hvehhood.

Under perfect market conditions VMP = P.. Therefore, if PA < PF, households

will shift to forest production.

174

From the Expenditure side:

Households decision options may be:

Substitute for hired labor with family labor,

Substitute for purchased market goods with own production (i.e.,
pharmacological products with medicinal plants),

Substitute for purchased capital goods with substitute capital from production
activities (i.e., housing materials such as metal roofs with indigenous
materials harvested from forest), and

Substitute for other purchased cost by exploiting "free goods" (i.e., use river

water for laundry instead of purchasing piped water).

175

APPENDIX B

Appendix to Chapter 4

I76

APPENDIX B. APPENDIX TO CHAPTER 4

B. I Survey Questionnaire ( Translated from Tagalog)

NATURAL RESOURCE ACCOUNTING FRAMEWORK FOR THE
COMMUNITY-BASED FOREST RESOURCE MANAGEMENT (CBF M)
SYSTEM OF THE PHILIPPINES

S UR VE Y QUESTIONNAIRE

Dear .

I am Gem Castillo, a student of Michigan State University in the United States.
You were chosen by the researcher to answer thisquestionaire. I am presently conducting
a study on natural resource accounting. Your community had been choosen as one of the
places of study.

This interview is estimated to last for more or less one to two hours. If needed, we
will add another 30 minute at other times if more answers are needed.

Questions are related to your livelihood activities in the farm, forest within or
adjacent to your community. You may not participate in the interview if in your opinion,
will cause harm to you by giving out information. Your answers will not be reported.
Only the group of researchers will the contents of the interview.

Your name will not be written in the questionnaire. The completed questionnaire
will be handed and handled by Gem Castillo. You may ask for the summary report of
interviews if you request. If you have some questions or doubts on the interview please,
send us a letter through this addresseszz

 

Mr. Gem B. Castillo, Dr. Larry Leefers,
l4-A Bellamaja Townhomes Department of Forestry,
411 Aglipay St., Mandaluyong, 126 Natural Resources Building,
Metro Manila, 1550 Michigan State University,
Telephone no. (63-2) 532-1557 East Lansing, MI 48824,

Tel 517-355-0097

 

 

 

 

177

Respondent no. Time Started:

 

 

 

 

 

 

Barangay: Time Finished:
Sitio/Purok: Interviewer:
Place: (House 0 a place) Date:

 

 

Read the introductory letter and if the respondent agrees to the interview check this box

[I
Questionnaire (Translated)
For the interviewer: Please answer the following questions honestly:

iMINIMUM BASIC NEEDS

A What are the basic needs of your household? (A “household ” used in this interview
include only actual residents and excludes members of the family living in another
household. Included in the "household ” are members of the family not physically
living in the house but are dependent on the income generated by the household such
as children in school outside of the community).

1. What kind of food do you need on a daily basisz? (Please make sure to indicate the

 

 

quantity)
Food1 How much What is How Where do o.
is needed in your unit of much you get/buy '3 E 0
one day/ measure?3 does one these? (Use E *5 ‘8
week/ unit the codes ’5 E 0
month?2 cost? below)4 2 E
Code

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

I Rice. vegetables, meat. salt, sugar, coffee. milk, spices, water, etc.

2 It is likely that respondents will provide answers to certain items used not on a daily
basis, in which case indicate in the “Other information column " the frequency
metioned.

3 Units of measure: kilograms. bdft. meters, (Refer to conversion table)

4 SA =from own agricultural land (A &D land): SG =homemade: C SC =from C erti. 0f
Stewardship C ontrac land (forest land); G=from natural forest; B=bought from
market or grocery; BL=bought from within village; D=donation; BR=barter.

178

2. What are your daily clothingneeds?

 

 

Clothin What do How much do What is the How Where do
Needs" you use? you use in one unit of much is you get
day/week/mont measure?2 the cost or buy? 8
h/year? of one Use 8
unit? codes
below3‘
Code

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TLaundry soap, materials used for ironing e. g. charcoal or electric, materials used for
laundry and how much is used per day, etc.

2 Units of measure: kilograms, bdft, meters, (Refer to conversion table for
calculations)

3 SA =from own agricultural land (A &D land) ,' SG =homemade; CSC=fiom C erti. 0f
Stewardship C ontrac land «orest land); G=from natural forest; B=boughtfiom
market or grocery: BL =bought from within village; D=donation,' BR=barter (Two
or more answers is likely)

4 Note: The purchase of clothing is not considered a daily requirement. although
many allot for needs such as school uniforms. With this in mind, ask how many
school uniform are bouth each year. If otherwise , (no school uniform) ignore the
item and indicate only expenses for clothing.

179

3. What are your daily health needs? [:I

 

 

Whatare g. _5

O.) .

yourhealth 3 x- O r: o 30 “m

3, ...= 1: O 'c o“, .x
needs? 0% g 3 >,; E _go- >23 3 a a)
S I “:30 >~° go.) 0': oo-o E 'O
eeexampes .. m m E o a) :3 o 1: EB a, o
belowL3 .2 3 :E E m Q3)“ E °‘ 3 ”'D : U

NH ;=\S am 050.) U

3 .::-- :>. :3 4:...1: .:

: com” 0o oo ...

3:: Ix-cb I» 3600 0

Code

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 Examples: headache medicine: medicine for other ailment; bath soap; shampoo:
toothpaste. atbp.

2 Exmples: tablet, tube (toothpaste), bar soap. Do not use brand name here

3 Note: Include free medicine from Health Center and indicate in appropriate boxes.
For addition answers not appropriate for the boxes include ”Other remarks" (Last

column).

4 SA =from own agricultural land (A&D land) ,' SG =homemade; CSC=from Certi. 0f
Stewardship C ontrac land forest land) ; G =from natural forest; B=bought from
market or grocery; BL =bought from within village: D=d0nation; BR=barter

4. Do you have education expenses? Yes D No D

 

 

 

 

 

 

 

 

 

Level of education? What types and how much
Tuition Transportion Meals Others?
Pre-School:
Elementary:
High School:
College:

 

 

 

 

180

5. What argyour household assets/properties?

 

Household

c~- H
. Q) 000 .
assets/propertiesI .51.! :3)- g 5 are“? S),
o 51: -= a- :52 9‘
>» m 0 o o {a
... 8 A *- 8. >01: 0
‘7’ 3%; 3- : 030 E P
E :3. a— 0 13:13 ‘— o
:3 500v 0 g) 028 B U
0 g8 ‘95 a; gel» 5
..D (It
0 2 3‘5: 0

 

Code

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

I A ppliances, dressers, kitchenwares, dining wares, sala set, tables etc. NOTE: This
should not include farm implements and machinery used in livelihood/production
activities)

2 SA =from own agricultural land (A &D land) : SG =homemade; C SC =from C erti. Of
Stewardship C ontrac land (forest land); G=jrom natural forest; B=bought from
market or grocery; BL=boughtfiom within village: D=donation; BR =barter (Two
or more answers is likely)

181

 

6. Description of the house
Floor area of the house?
How old is the house? (year)

Types of materials used in the house? (Write answer inside cell or box)

 

 

House m 0 a E

" a e- '-.: =9; "-
component 5;; 3 s. a, q, q, a ... e a a, - E

'c-rfi cm-g *- um =0 0 G
am «53°». augme- EU 60 o
«2: 335°: Efg§° 32 2:36
9“ .= no '5 gr: 0.. 4:“
has ‘0ng, “GE = ¢u > “a
t-EB.2=.:>.:: m£a3=:.2 <8'OS

Code

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

I Measurement and quantity of house panelings/walls, roofing, flooring, and if these
was made of wood, concrete. or native materials etc.

2 SA =from own agricultural land (A&D land); so =homemade; CSC =from Certi. 0f
Stewardship C ontrac land (forest land) ; G =from natural forest; B=bought from
market or grocery; BL=bought from within village; D=donation; BR=barter
(Two or more answers is likely)

182

7. If your daily needs can be bought, what is the total amount you would have to
spend? (How much is needed to supply your daily needs? This is considered the
budget of the household)

a. P50-99 E] b. moo-149 E]
c. P 150-199 E] d. 9200-249 [3
e. P250-299 E] f. P300-349 [I
g. P350-399 [:1 h. P400-over E]

8. What do you substitute for those needs you are unable to buy or those
bought in the market, store, grocery, drug store or hardware? Explain: It is
possible this is due to lack financial resources or other reasons. (Note: The
respondent may not be needy or lack financial resource but substitutes items
anyway. Explain clearly so that their intention for substitution is understood)

 

 

Regularly What is What are your sources for substittues?3
purchased your 2
. l . :3 C‘- q)
rtems substitute? :9 3 5 o o
2 ° 3 5 E {-5 § 2‘?» <3 8
E {I}: 3 e 3 9: (U I: o. S b' O
.2: m 3 “g a 3 “g E 3 “EH: >~ a ‘5
= *5 O O *5 O O O O a O {-3 O
D a... :1: o c... I 0 ct— I o 0.0 Q o m

 

Code

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

I Vegetables. meat, salt. sugar, coflee, milk, water, etc?, For health?, For clothing?
(You may refer to previous question)

I These could be of dlflerent type such as sweet potatio as substitute for rice.

3 Example: All = I 00%; Half = 50%; quarter = 25 %; Otherwise record the quantity.

183

9. Where do you get your fuel or energy source?

 

Type of F uell Where was How many What is
it getd or do you need your unit of
purchased? per day?3 measure?
Use codes
below2

How much is
one unit?

Do you
have
other
commen

 

 

 

 

 

 

 

 

 

 

 

 

 

I Example: Gas (LPG), Kerosene. charcoal (separate those produced from wood and

coconut shell), wood, electric... etc

2 Of Stewardship C ontrac land (forest land) ,' G =from natural forest; B=boughtfiom
market or grocery; BL =bought from within village; D=donation; BR=barter (Two
or more answers is likely)SA =from own agricultural land (A &D land) ;

SG=homemade; CSC=from C erti.

3 It is likely that the respondent do not measure daily use. Record the quantity in this

column. Record other comments in the

10. What is the price of fuel within the

last column.

community?

 

Type of fuel What is the unit of
measure?

What is the price
per unit?

What conversion
factor do you use?

 

 

 

 

sol-sew:-

 

 

 

 

 

 

 

184

 

B. SOURCE OF INCOME OR LIVELIHOOD
What are your sources of income or livelihood? Check the appropriate box.

11. Do you have a farm? Yes 1:] None [I
Livelihood in the farm What is How oftenly do you work? (Check

 

 

you the appropriate category)
total 2
. 0
income? D g Z _< 9. 5,3" I a
t s 3 :2 ;. a. ‘
(D

 

Code

 

 

9’99

 

 

 

 

 

 

e
f.
g.
h

 

 

 

 

 

 

 

 

 

 

DDDDDDDD
DDDDDDDD
DDDDDDDD
DDDDDDDD
DDDCIEIEIEICI

 

I Example: Planting vegetables; Planting, care, and harvesting coconut; Planting and
harvesting rice; Planting and harvesting corn; C opra production; Planting and
harvesting fruit trees

2 Example: 2t = twice a year. 3t = three times a year, etc. ; 2w = twice a week. etc;
2b = twice per month. etc;

185

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12. If you have a farm, please answer the followin c uestions?
Type of farm 2’, 3 c: 33 ..
a >- \ . . 5 .§ g g
a; a a E a = ”a.
'- o O 1: 0 o-
? $33 a E ““3 €52 g
o _‘ cm 0
E ‘3 E5 33 g 3 § ‘5' e
g 3 'g o g “r 8 $3. >‘ 5
3" 8 a? '99 § '5 g a? 2 g g o
a a a .E 3 L8 a: c: 3 a: o z
r Rice paday, cornfield. peanut farm, C SC . fruit orchard et.
2 Specijj) the river or stream where the irrigation water flows.
13. What are your farm ex enses?
What are c~- :: ,...; N
your cost g g g o. .fg’ "$2 5 "3:” 5
items?1 E ‘3 .22 k 2 a 8 o. 3'5 3}, E
3.8 2:§ Séae gés 8
:1: 8. a 3 5 E 3 «2: «t u l— m u 0
Example: 3 bags 3 P420 3 780 50kg/ bag
Fertilizer
Labor 14 Daily 2 125 3500 8/hrs/d

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

‘ Example: F ertilizer. insecticide, herbicide, gas, labor, food. kahoy, vine. water, etc.
2 Explain the conversion to kilogram. meters. cubic meters, liters
3 Need not compute the total.

186

14. What tools and equipment do you use in farming?

 

Farming Where do How How ofien How much Other
implement or you get or many? do you per unit? comments?3
tooll buy? Use replace?

code below2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TExmple: Water buffalo, cart, thresher, plow, dryer etc.

2 0f Stewardship C ontrac land (forest land); G =from natural forest; B=boughtfiom
market or grocery; BL =bought from within village; D=donation; BR=barter (Two
or more answers is likely) SA =fiom own agricultural land (A &D land);

SG =homemade; CSC =from C ertificate of Stewardship contract lands
Example: Price not known

15 . What are your output from the farm?

 

Type of Output 1, 3'5
5 a s '6 B 2 13 2 w
J: o “U :— m m C m C‘ -- 8
Q— E d) a) H 3 .fl 3 '6 _g
2‘ Q5 3 0) 8 G g G g_ (:0, T)
.... ,_ a.) s... ..C: s— o -
g t: g‘ a. a) o o
:3 D G- O- l—
G)
O’ f-L

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

r State average or normal production output insteaqd of current output that were
aflected by typhoon or other natural calamity.
2 Note: If you use quantity in one cell do the same fiom in all the rest.

187

16. Do you have livelihood activities in the forest?

 

Yes None Occasionally D
Forest Livelihood Activityl How a N
much 3; a r a a *5 8
(10 cc 8 § 2 0 g. 0
you Q 3 >.. .5 3: 3:, L)
earn? 2

 

Code

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DIDICJIEJIDDIDI Mommy

Dmpmmpu
almlmhjlalmlw
DIDIDIDID'DID
DIDIDlEIIEJIDID

I

 

Wood harvesting for charcoal production; Harvesting and marketing lumber; White
clay mining; Trapping wildlife; Wood cutting for firewood; Collecting vines; Other
Livelihood . Mentiond if this is C SC or Natural forest

2 Example: 2/t = twice a year, 3/t = 3 times a year, etc. ; 2/w = twice a week. etc. ;
2/b = twice per month. etc. ,' ht = not definite/regular

 

 

 

 

17. What are expenses in forest activities?

What are «‘3‘ U N:

your 3.; 5 CE) g C C‘- a... C‘- “a

expensle g ‘g g: .3 h .5 E -; g g a) g E 0

items? '8 E 2 I; 3 3 0 a) 5 .t: 3 5 =
553 35%; :EES 82-; [3% 8 E

Example: 3 Bags 3 P420 3780 5 0kg/

Fertilizer bag

Labor 14 Daily 2 125 3500 8-hrs/d

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

I Sample answer: Fertilizer (sa CSC holders), insecticide, herbicide, gasoline, labor,
food, wood, vines, water, etc.
2 Explain how the units are converted to standard unit of measures such as kilogram.
meters, cubic meters, liters etc.

188

18. What forestry tools and implements do you own?

 

Forestry tools Where do you How Frequency if Cost per Other

and implement1 get or buy? many? replacement? unit? comment
Use codes 5?
belowz

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7 Example: Water bufallo cart, thresher, plow. coconut dryer.

2 SA =from own agricultural land (A &D land); SG=homemade; CSC=frorn C erti. 0f
Stewardship Contract land (forest land) ,' G=fiom natural forest; B=boughtfrom
market or grocery; BL=bought from within village; D=donation; BR =barter (T wo
or more answers is likely)

19. What do you harvest from the forest? (With or without permanent livelihood in
the forest)

Products harvestedI

 

Unit of measure

used
Percent used for

Price per unit
Percent sold
household
Percent use for
farming?
Percent used for
other livelihood

Quantity
harvested

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

rExample: timber, vines, wildlife, white clay, bamboo, rattan, herbs or medicinal
plants etc.

189

20. What forest products do you use for other livelihood?

 

 

 

 

Products Use Quantity or percent used

from the Used for Forestry Sold in the Other Used in
forest? farming? market livelihood household
Example: 100% Na Na Na Na

Wood

Medicinal Na Na 50% Na 50%
plants

 

 

 

 

 

 

 

 

 

 

 

 

 

 

21. Do you an experience in harvesting timber from the forest? Yes 1:] No 1:]

22. What species of timber have you harvested?

 

Timber species

Volume in cu m?

Destination?

Price per cu m?

 

 

 

 

 

 

 

 

 

 

 

 

 

23. What is the frequency of timber harvesting in a year?

190

 

 

 

24. Based on your experience, and having the right condition, how much timber
can you harvest?

 

Materials

How much can one person accomplish in one da

1

 

Quantity
harvested

Unnof

measure?

of

Number
hours

Q—

02m
330333

efiez's
m oil-0
:80> 8

Z.:E.E U

harvesting

Other
comments2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

I (Factors aflecting this include demand, quantity of available resources, activities
within the community such as house construction, and need or requirement. More
importantly, this all depends on the capacity of one person.)

2 Include expense items.

25. How far is the forest from your house? (Note: This refers to the boundary of the

forest)

Hours walked? (= 0 if household resides within the forest)
Distance in kilometers? (= 0 if household resides within the forest)

26. What are your other activities other than your regular livelihood activities in

the forest?

 

What are your
activities?l

Frequency of
visits?

Duration?

How much do
you spend?

Other
comments?

 

 

 

 

 

 

 

 

 

 

1 Include hobbies such as wildlife trapping, willplants collection, going with others on
timber harvesting activities etc.

191

 

 

27. What are substitutes for natural resources that you harvest? (Are there
substitutes when natural resources are exhausted?)

 

Forest Resources’

Substitute

Where do you get or buy the
substitute? Use code below2

 

 

 

 

 

 

 

 

 

1 Example: Metal sheets substitute for anahao leaves used for roofing; medicine tablets

substitute for medicinal plants, bricks substitute for timber,.. etc.

2 SA =fiom own agricultural land (A &D land); SG =homemade; CSC=from C erti. Of
Stewardship C ontrac land aorest land); G=fi0m natural forest; B=b0ught from
market or grocery; BL=bought from within village; D=donation; BR=barter (Two or
more answers is likely)

28. In your opinion. how much fores resources remains at present? (Optional -
Ask the respondent if he/she has knowledge of this.)

 

Forest resources

What is the unit of
measure?

Quantity?

What conversion
factor do you use?

 

 

 

 

 

 

 

 

 

 

 

192

 

 

29. Do you have other livelihood activities besides farming and forestry?

Yes [:1 No C]

Other LivelihoodI

 

income?
Yearly
Not
definite/
regular
How

How much
is your
Daily

frequent2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DIDFDIDID 1:1
1:1 1311311211121 [II Weekly
D'DID'D'EI'D Monthly
:1 EJCIIEJD [:1
01:11am“: 13'

TCoconut lumber production; carpentry; blacksmith; dress making; retail store

(groceries); basket-making, home décor; tiger grass broom-making; jeepney driver;
other forest activities: coconut production helper. Wage employment is not included
here. but covered by the next question.

2 Example: 2/t = twice a year, 3/t = 3 times a year, etc. ; 2/w = twice a week. etc:
2/b = twice a month. etc; ht = no definite/regular

 

 

 

 

 

 

 

 

 

 

30. What are your expenditures for these activities?
What are

 

 

 

CM :1 N
your g cg: {‘5’ ~— 2 E 5 § __ 6;"; .5 o
expenditure E 33 "3 ”13,: g E 2‘ g 8 g g '8
items?‘ 3 “3 g g o 3 3 a) [3 a g u
:3 9 a E :E E 9 «’5 °
9- ': a. 0
Example: 3 s bags 3 P420 3 780 5 0kg/
Fertilizer bag
Labor 14 Daily 2 125 3500 8-hrs/d

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

r Sample answer: Fertilizer. insecticide, herbicide, gasoline. labor, food, wood, vine,
water. etc.

2 Explain how the units are convereted to standard unit of measures such as kilogram.
meters, cubic meters. liters etc.

193

31. What tools/equipment do you use for these livelihood activities?

 

What tools/ Where do you How How What is Other
equipment?l get or buy? Use many? frequent do the price comments?
code below2 you replace? per unit?

 

 

 

 

 

 

 

 

 

 

 

 

 

I Example: Water buflalo, cart, thresher, plow, coconut dryer.

2 SA =from own agricultural land (A&D land) ; SG =homemade; CSC=fiom Certi. Of
Stewardship C ontrac [and (forest land); G =from natural forest; B=bought from
market or grocery; BL=bought from within village; D=donation; BR=barter (Two
or more answers is likely)

32. What are your products (off-farm production)?

 

Name of product1

Quantity

produced
Unit of

measure

Price per unit
Percent sold

Percent for

'o 5
—- c...
O ...
-= t:
3}, o
a
.4: O...

farm?

Percent used

for other
livelihood

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

I Example: wood. vines, wildlife, white clay, bamboo. rattan. etc.

194

 

 

33. Is there a member of the household who works for wages or employee in the
community or outside the community in the current year?
Yes [:1 None I] Occassionally [:1

34. What kind of work?

 

 

 

 

 

 

 

 

 

 

Kind of workI How much is the salary? Choose appropriate answer)
2: I? g 39 SD 3": 3 82-3
5 8 E 5 2 E g “3’.
Q 3 2 >‘ *5 % e
Z ‘14—:
a. Example: Carpenter (2”I 125 na na na na 5/w, ht
child)
b.
c.
d.
e.
f.
g.
h.

 

i.

 

 

 

 

 

 

 

 

1 Example: Write the type of work of the respondent and other members: carpenter,
farm labor. wage labor. community oficer ..etc.

2 Example: 2/t = twice a year. 3/t = 3 times a year, etc. ; 2/w = twice a week. etc;
2/b = twice a month. etc; ht = not definite/regular

195

 

35. Record on a montly basis all activities mentioned above (All: farm, forest and
off-farm). (What are your monthly activities each month?)

 

 

 

Livelihood
. .d a h; E? c.‘ _ oh a. .5 >' 0
.§ a :2 .3 2 £3 -2 2 a; £5 :5 5
Example: _ _ _
Planting _ _ _
Harvest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

How much is your income per month? (Indicate the livelihood activity)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL

How much do ou s end each month? (Write expense items and value)
Example: 35 35 35
Fertilizer 00 00 00
TOTAL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

196

36. Where do you spend your livelihood income?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Livelihoodl Calculate the proportion or percent for each column
SNA
5 76' = “O =
a.) g -c a? 3 if) 3 E, 8 “:3” 3 3i) 3
E '5 0 -= <6 = 3 a 5 = a .E v
o Q 0 ‘5 8 .2 o o T, 8. 2 > 5
8 9, u. a “U m 5 III .2 x 8 (2 O
The enumerator/interviewer should list all livelihood activities.
2 Indicate total income from production.
K. OTHER SOURCES OF MONEY INCOME
37. Do you have other sources if your livelihood income is not enough?
What is your How How often do Respondent's lnterviewer's

source?l much? you receive it? explanation Comments

 

 

 

 

 

 

 

 

 

 

 

 

I Example: Money remitted by other members of the family working in other places;

house/land rent, inheritance. donation. etc

197

D. Leisure and Recreation

38. What are your recreation activities?

 

Recreation activity” How frequent and how many hours?

 

Not
definite
How
equent?
How
many
hours?

DDDDDDfi

 

 

 

 

 

 

"3.09-9.69

I

 

 

 

 

 

 

 

 

 

DDDDDD WW
DDDDDDWWY
DDDDDDMWW
DDDDDDYWy

DDDDDD

 

Card games, watching TV, basketball, social drinking, story-telling, wildlife hunting,
cockfighting..etc. Sample question for interviewer: "A fter farming, forestry, fishing,
what are your other activities other than sleeping? "

2 Ask if this is LA = outside the community; G = inside the forestt; [L = river; 0 =
other places (may speczfiz exact place)

E. HEALTH AND ENVIRONMENTAL SANITATION

39. Did anybody in your household got ill this past 3 years? What is it? What
was the cause?

Who got ill? Do not Type of illness? What was the suspected cause?
mention name.I

 

 

 

 

 

 

 

 

 

 

’ Write only the relationship with the respondent, not the name.

198

40. Do you have a toilet? (Check appropriate column)

 

Yes I] No
Inside or Water Sealed Open Privy DroppedI OverhangI
outside the and Sanitary Pitl
house? Pitl

 

 

 

 

 

 

 

 

 

 

 

I The Interview should describe what each choices mean.

41. Where do you dispose your waste? Check propriate column.

 

Typeof
9' 13

waste. 0 _O =

1,33 8 3 o
..t: m i- "m

3.5 3 8. B? 9373'? a"?
Egg 5. E ‘52 33% =
Dent) on U m: Lang 5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bwastes from the kitchen, plastic, metals, etc..

42. Did you have opportunities to plant trees ? Yes [I o No C]
43. Where did you plant those trees? Encircle apprpriate answer
Own-farm

Within the CSC

Inside the "protection forest"

Surrounding household

Other places

99.09:.»

 

44. What kind of trees did you plant?
45. How many did you plant?

46. Do you have other comments?

199

“uoBoanGH
“6 325.3 m 0&6 Q

“no 952 aims W

Go 9:32 «50.50 9..—om

FEEZ—dPFafi
A4ZOHF4ODB {Fm
FWNmOHTH

mm a
mm m
mm m
mm L

SEEHlO
308W OBWIXS'M
HEXUOM BU H331

woo“
szumnmzmmnm
mm? 73 EFEW szsnmoaawZAVv/u BECK 8w<m->PHZEEOO mmh. mom
Eogmsém OZHFZDOOOA.‘ mom—dog AéDP<Z 021V A<FZNEZON=§ZW

NOIlVWHOle OISVH

 

“Johann
“howdoam
and? $6332
”Dugounm

200

THANK YOU FOR YOUR PATIENCE IN ANSWER QUESTIONS. In case we
have additional question we may request for another intervie time not to exceed 30
minutes. lf you you some comments or questions, you may write to:

 

Mr. Gem B. Castillo, Dr. Larry Leefers,
14-A Bellamaja Townhomes Department of Forestry,
411 Aglipay St., Mandaluyong City 126 Natural Resources Building,
Metro Manila, 1550 Michigan State University,
Telephone no. (63-2) 5321557 East Lansing, MI 48824,

Tel 517-355-0097

 

 

Dr. Marian S. delos Angeles

Project Director

Environmental and Natural Resources Accounting Project
Unit 3N YGB Building

219 Katipunan Ave. Blue Ridge, QC 1109

 

 

 

201

 

B. 2. Stand and Stock Tables for the three Peoples ' Organization in the study site.

Table 19. Stand and stock table for CPEU, lnc.a

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DBH CLASS
D/N Species Class 20 3O 40 50 60
T V T V T V T V T V

D Apitong 2.94 0.28 2.57 0.97 0.74 0.35 1.10 2.17 1.47 4.81
D Phil Mahoganme 156.99 20.42 81.25 28.95 24.63 19.17 13.60 20.12 12.50 26.92
D Yakal 2.94 0.42 3.68 1.03 2.94 1.95 1.10 1.34
N CFW 29.04 3.59 21.32 6.84 7.72 4.99 4.78 5.32 1.10 2.47
N Lessur Used Species 119.12 12.16 46.32 14.36 12.13 9.38 4.41 4.76 2.21 3.77
N Nato 5.15 0.78 1.84 0.64 1.10 1.04 0.37 0.46
N PMS 0.37 0.12
N Premium Species l. 10 0.12
N Softwood 0.37 0.08

Total 317.65 37.85 157.35 52.91 49.26 36.88 25.36 34.17 17.28 37.97

 

 

 

 

 

 

 

 

 

 

 

 

c:
2

D
D
D
N
N
N
N
N
N

Species Class

Phil
Yakal
FW
Lessur Used
Nato
PMS
Premium
Softwood
otal

DBH CLASS
70 80 90 Total

T V T V T V T V T V
8.82 8.58
37.37 308.47 207.63
10. 4.74
65.83 25.09
184.56 45.
8. 2.92
0.37 0.12
1.1 0.12
0.37 0.08
5.72 5.56 37.37 588.64 294.37

772 21.76 6.62 27.57 1.1 5.35 4.

0,37 1.51 0,37 1.

0.37 0.66

 

8.09 22.42 6. 29.08 1.1

3D = Dipterocarps or species of the family Dipterocarpaceae; N = non-dipterocarps species
T= number of trees per hectare
= volume. in cubic meters per hectare

202

Harvestable

2.405
105.51

3.115
2.545

0
11358

Table 20. Stand and stock table for MUFFIN, lnc.a

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DBH CLASS
D/N Species Class 20 3O 40 50 60
T V T V T V T V T V
D Philippine Mahogany Group 8.05 0.77 19.00 5.63 14.70 8.37 8.62 8.54 9.77 14.90
D Yakal 0.86 0.10 1.15 0.32 0.86 0.82 0.29 0.18
D CFW 2.87 0.28 2.59 0.63 3.16 1.70 0.29 0.26 0.86 1.02
N Lessur Used Species 2.01 0.22 4.31 1.03 2.87 2.25 2.01 2.05 1.44 3.82
N Premium Species 0.57 0.12 0.57 0.27 0.29 0.29 0.29 0.48
Total 14.36 1.49 27.62 7.88 21.88 13.43 11.21 11.03 12.36 20.22
0
DBH CLASS 3;
D/N Species Class 70 80 90 Total 2;
T V T V T V T V 33
D Philippine Mahogany Group 3.16 8.12 3.74 12.50 1.44 5.69 68.48 64.52 33.76
D Yakal 3.16 1.42 O
D CFW 0.29 0.48 10.06 4.37 0.99
N Lessur Used Species 0.29 0.44 0.29 1.01 13.22 10.82 3.36
N Premium Species 1.72 1.16 0.24
Total 3.45 8.56 4.32 13.99 1.44 5.69 96.64 82.29 38.35

 

“D = Dipterocarps or species of the family Dipterocarpaceae: N = non—dipterocarps species

T= number of trees per hectare

V= volume, in cubic meters per hectare

203

 

 

Table 21. Stand and stock table for TIBKOI, Inc."ll

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DBH CLASS
D/N Species Class 20 30 40 50 60
T V T V T V T V T V

D Phil Mahogany Group 113.24 12.59 58.09 15.86 25.37 15.32 6.25 5.99 5.51 8.79
D Yakal 1.10 0.10 0.74 0.38 0.37 0.12 0.37 0.68
D CFW 30.88 3.12 3.12 5.43 6.62 3.37 1.84 2.00 1.47 1.75
N Lessur Used Species 5.88 0.61 0.61 1.81 5.15 2.48 2.94 2.49 0.74 1.03
N Nato 3.31 0.33 0.33 0.56 0.74 0.48
N PMS 0.37 0.01 1.00 0.26
N Premium Species 11.76 1.18 1.18 1.61 2.94 1.21 0.37 0.19 0.37 0.30

Total 166.54 17.94 65.07 25.91 40.45 22.50 12.14 11.15 8.46 12.55

 

 

 

U
2

Species Class

Phil

Yakal

C FW

Lessur Used
Nato

PMS
Premium
Total

D
D
D
N
N
N
N

DBH CLASS
80 90 >90

T V T V T V T
1.84 4,52 0.74 3.22 0.37 623 21582
2.58
0.37 3.04 4467
15.32
4.38
1.37
16.62
4.5 0.74 3,22 074 9.27 300.7 1

70

T V
441 8.

037 0.

4 8. 1.

Total

V
80.72
128
19.3
8.42
1.37
0.27
4.
15.

‘ID = Dipterocarps or species of the family Dipterocarpaceae; N = non-dipterocarps species
T= number of trees per hectare
= volume, in cubic meters per hectare

204

H awestable

 

APPENDIX C

Appendix to Chapter 5

205

APPENDIX C: Appendices to Chapter 5

C .1 Schematic Model of the SAM.

Table 22 shows the schematic model of endogenous and exogenous accounts of
the SAM in equation form. The symbols, and numeric symbols sparingly used in
subsequent discussions on multipliers, are shown and defined in the table. Table 23 show
average propensities for expenditures, A5 and GE (average propensity for leakage)
derived from the SAM. These figures measure the contribution or proportion of each
account element to total expenditures. If it is assumed that accounts are not related or
connected, any exogenous injections into the system will change SAM accounts by a
fixed proportion (Ag). In reality, accounts are interconnected so that the resulting change
(multiplied by a factor M5) is greater than the value of the injection (multiplied by AE),
because there are direct and indirect impacts created by account interconnections. The
actual change created is calclated by transforming the average propensities (A5) to a
Leontief-type multiplier (ME) through a process that involved matrix inversion. The
result, shown in Tables 24, is a matrix of endogenous multipliers (ME) for each
endogenous account. These multipliers transmit impacts of exogenous changes around

the SAM.

206

 

3888 258898
8888833888: .89 mo 88> 888 u m n m 88898 88 88888 mo 38m 3:: .8 882, u mo
3:3 5:28 mm H 3888 888:8 mo 3:3. 26: n x2 3:.o8 3.8888 2:. 888.8 88898 (:0 88:: n mx

3888 88808 8838: 88888:: go 8.8:: n P 8:88 :8 8:38:88 .838 :88.» n a:
:8. 8 82888: 8:88 no 88:: u “.5 85888:: 838898 88888 8:88 .8 88:: n m<

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

388 2:: 888.8: 88808 .8 38m 3:: mo :o:8> n mx 3388: 88888 88 Bo: .8 :o:8> n m?
8855
m H N— F +mX H mm % 88:8:8xm 30,—. .38.!
33380:»: a
x
o
3
P + mi N v:Z H a: 5 n mx 253 23o :8: m
3:88.880 m
8
898 m.
a m
80338:. M.
o
m m I m m m H m 8
X4. > I D X «a < > 888898 398”— m
m
82>8< 88:85
8.33m 2:03 8085080 8:80 808:85 8888.: 88>8<
3989: _mSH 22.80 8:0 :8”— mo £98m 8880::—
, 35.83:
832$ use—:owoum .....Suah 258 28”.—
”Pigtaoaum

 

 

 

 

«37% 8: go 3:388 88888 88 88888 :8 88:38 8888 .mm 2:3.

207

8:38:88 8.. 8.38088 8.88 88888 8 883. .mm 0.8...

 

0000..

0000..

0000,.

0000..

0000..

0000..

0000..

0000..

83:808.”. .30...

mm

 

8.93880:

cm

 

.N.0.0

N3. .0

8m00

.920

200.0

.8000

530.0

283 22° :8:

mm

 

8035080

.8

 

380.0
¢w0N0

.580

32:0

.880 583:

:o8.3338< .880 .2382
88:00:80 .8qu .8382
858888388.

('3
N

N
N

 

00.8808 8: 3050
838.890 90.80:.
838 280803 3«0.88..
8.8088 86:08..

838 0.8083. 0.2...mEm
8.8088 :8.8..§:m

IS"— 8151

w
_

l

l‘
g

l

\O
_n

m
.—

 

09:00
N800

8000

50000
$500
9500

m0000
0:00
8000
0N000
083.0

mm000

3.00.0
8.00

0.N0.0
8.0.0
£88 0

0000.0
880.0
mm~00
wwwv0

800.0
0000.0
2800
09.00
9.080

.880 .8382
.880 083-82
88‘. .02.:

338. 03838 850
88.. 338...

I: 3]
sydgaaou

N
u—

I

~
~

 

0m000

.830

00.0.0

omc. ‘0
0000.0

300.0

m0000

Emmu

.03.. 883-803
80:38 :85
88:3...

8.8:. :93:
8088.98. 883
8:38.08. :88".
8:38... ..:w<

~l~l”|*l“l~°l*|°° @ISI

 

 

 

h

0

m

w

m

N

.

 

Emma

8889:.
.03 803

 

 

80:38
:85

 

88:3 “.

 

8.8:...
.83.

8038.qu
883

 

:o8:o.axm
:88".

 

388..
03:30:84:

 

 

8.3.>8< 8888:.

 

 

8:3..083nm

 

8.38038.— 0:3::::0:.xm 83:93.

 

 

208

lou 5191410

uuezyuefijo
spldoad

uouanpmd

punoq
ploqasnoH

ssalpuel

uouanpmd

ploqssnoH

 

=0:2:E:8< .239

5:28:50 1295

cozmflcumSO
9509 205820:
2:020ng
952. 305301
36:83;

_ue

mo UHSOm

wig;
EuEonEm
conmzoixm

wEEBm

n.:=ouu< b.5252 euawouww<

[nudeg [unleN
Joqn p911“
ousawoq 19mg

.280. . $236530 .8 8522.05 awash“ msocuwoucu we 5522 .mm 29;

209

 

 

 

 

 

 

 

 

 

 

 

 

 

 

210

 

 

 

 

 

 

 

 

 

 

 

 

88._ 88._ 88._ 88.. 88._ 88._ 88.. 33885 Bee 2
88._ 333285 8
@Nomd 3.53 05.3 and mm
:6— .o EoEEo>oO vm
88.8 3&8 5:5: MN
:oc-:E=8< 13:30 .8532 mm
5.588500 13850 .9382“
mwiéméuogmgfi d”
@050on 8: £210 a.
88.8 3:; 883.35 $8884
258 29.3.8: 3285; q a
88.8 fiofisofifiufiqufl m
88.8 825 288.5: anaemm m.
88.8 88.. 8.83.8; 520533 3
$0.53 ozv N;
ommod oooo._ ocmmd 2mmU w
M82 .28 333-803 n
88.8 M: No 82:8 saodl
wvmod vvood mar—0:2“— m
985 _on v
52.5038”; own? m
mmm _ d conga—ax”; $20li
88.8 weigh. ..S..<.._l
0N mm VN mm NN 3.. ON
m:_&=m EBB 82:80.50 3:95 =o_§=:_=oo< 22380300 mw5>am
Bowen 2: go 3.9m 58:: 1295 .8382 3:93 .8332 bcogmgfi 3588< b.3282 o.auo..uu<
322$ mzocomoxm 3:an
mean—Evans

 

 

 

 

.38. . 82:86:35 5% $222882 owmb>a msocowowco mo x522 .mm 2an

 

coo. p

ooo. _.

ooo.

08.0

ooo. w

ooo. w

ooo. _.

08. F

.326...

w

 

 

 

 

 

 

 

 

 

 

 

 

:00 0~00 00.0 0~00 0.0.0 0~00 00.0 ..000 020.000.0000 0~ m.
000.0 :00 0000 R00 0.00 .000 000.0 0000 0:02. 2:330 0~ m
0....0 .000 ..000 000.0 0000 000.0 000.0 0.00 20550.60 0~ s
0~00 .000 00.0 0.00 ...00 .000 0.00 0~00 3.2.000
~20 .000 08.0 000.0 000.0 000.0 000.0 0.00 300000050: 0~
000.0 000.0 ~80 .000 .80 ~80 ~80 000.0 2.0320830800002m -
.20 0~00 00.0 0~00 0.00 .80 000.0 ..000 co...0_oe%o_2aaoazm .~
0000 ~80 0.00 .80 0.0.0 0~00 0.0.0 0~00 0003000005325: 0~
000. 00.0 ~00. 0~0. 00.. 0~0. 0.4.0 000. 3.2.8.0
0.0.0 ..000 08.0 0000 0.0.0 300 0~00 000.0 00.0.8038 emsom 0.
00.. .000 .80 .80 -00 ~80 0.00 000.0 02.00.0005 0.200an 0.
00.0 0.00 .0..0 .0~.0 .0..0 080 00.0 00.0 00.2809. 000.003 m. 0.
000.0 .000 0000 ~00. ~000 0.... 000.0 0.0. 00.8000050205asmw ...
000.. 00.0 0.0.. .4.~. .~... ~00. 0:0 .00.. 32.80
000.0 000.0 ..000 .000 0000 000.0 000.0 0000 5.08.2202 0. m
0000 .000 000.0 000.0 .000 000.0 000.0 000.0 _0._08000&-002H~. .m
0000 .000 .000 000.0 ..000 0~00 000.0 000.0 .83 02.1.0. .. m
0~... 000.0 000.0 0~00 0~00 000.0 .000 0000 03880005800500 0. s
.0..0 000.0 ..000 00... 000.. 08.. 000.0 00~. 303 0.60... 0
R- 00.. 0.0. 000.. 000.. -0. 0..~. .3. 3.2000
000.~ .80 ~80 0~00 0~00 $00 08.0 0000 .2000 0
000.0 ~00. 0.0.0 0000 000.0 0.00 ~.00 0.0.0 32033082, 0
0.00 0000 v8. 080 000.0 08.0 000.0 000.0 085020500 0
000.0 08.0 0.00 .0... 000.0 00.0 000.0 8.0 megawm 0
0~00 000.0 000.0 000.0 ~00. 20.0 .000 :00 0508:5500... v
080 000.0 000.0 ~..0 0000 .... 000.0 ~..0 .00§0.050000>>w 0
..00 3.0 ....0 0.0.0 ...00 :00 0.0. :00 082.205.0200 ~
~.0_0 08.0 ~80 0.00 000.0 0.00 -00 .00. 8.5.000? .
0 ~ 0 0 0 0 ~ .
Sumo coaoauoa 08.:om 00:020.“. 9.69.0 .coE>o_aEw cozmzoaxm 0E5.

.00. 082. .050 .200 0002. .003“. 82.809. 30:83..

 

 

 

 

 

 

 

 

00_._>_.o< 02.2690.

 

 

unocououcm

 

 

 

0.5.0000 0:0:0wox0 5,. 0020:0020 0w0.0>0 0:0 0.55000 0:0:0woucu .o 0.2 .0 x502 .VN 0300.

211

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

08.. 08.. 08.. 08.. 08.. .8280 3
.8 0 0.0.0 0~.0 000.0 0~00 3.0500008 0~ 0 am
080 08.0 0.00 000.0 030 0.53 0.0.0 .000 0~ w
~8 0 ~80 000.0 00.0 ~80 2.065200 0~ 0
:00 000.0 00~.0 000.0 0.00 .5280
08.0 08.0 0000 ~0~0 08.0 .5500 00:5: 0~
.8 0 .80 0~00 000.0 .8 0 800.558... .0800 .32 m. - 0
.80 0.0.0 0~.0 000.0 0~00 80052000 3.00032 m. .~
-00 0~00 0.00 000.0 -00 0003000500002. I 8
...... .0.... 000.. 00~.~ 00.; .3280
000.0 .000 ~000 0.00 0000 000.800.820.00 m 0.
:00 0.0.0 0.0.0 .00.. :00 803.000.000.080 m. 0. 0
00.0 000.0 ~80 .0~,0 ~0~0 m.09....009. 000.003 m. 0.
E... 08.0 08.. 000 0 .0... 00.0.0002. 30.9...050 w 0.
000.. 000.. 0~0. .0~.~ 000.. .5280
08 . 000.0 08 0 08 0 08.0 .0008 .2202 0. m
08.0 08.. 080 08,0 08.0 .0008 0008-002 .... ~. ~ cm
08.0 080 .00 . .000 08.0 .000. 00.... m. .. w
0~00 0.0.0 000 0 000.. 0.0.0 0.2.0. 0000.80 .200 0 0. m
0.00 :00 00~0 00. 0 0.0.. .003 .0500 0
0000 ~000 000.0 000.. 000.0 0.2.80
-0 0 .~00 .0..0 0.0.. -00 3:00 0
08 0 08.0 0~00 ~00 0 08 0 .00. 0003-083 0
0.8 0 .000 0 .0 0 0 .0 0 08 0 08:50 .200 d 0
00. 0 3.0 000 0 ~00 0 8. 0 8:000". W 0 .
:0 0 0000 000 0 0~00 080 0500.0 .500 m 0
0. .0 0~. 0 000 0 ~00 0 0. .0 2080.060 0003 w 0
0.0.0 0.00 0.00 0.00 :0 0 8036.000 .0200 ~
0.0 0 000 0 000 0 0 .00 000 0 00:50,. :0< .
0. ~. .. 0. 0
.8500 .8500 .003 .00.... 0.2.... .003 3.60“.
.9202 0.008-003. . 0500800 .050 . 0253000
00:02.90. .0 0.0.00”.
naoaoeam

 

 

 

..:00. . 0.5.0000 0:0:0w0x0 .0.. 000.0500... 0w0.0>0 000 0.5.0000 000003.000 .0 m..>. .0 .0..0—2 .vm 030...

212

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

80.. 80.. 000.. 000.. 000.. 80.. 32.000 3
00. 0 0:0 000 0 08 0 000.0 0000 020.000.0000. 00 m
000.0 0.00 000.0 000.0 000.0 000 0 2.03 20.0 .03. 00 m
000 0 0.0 0 08.0 .000 000.0 000 0 20550.60 ..0 s
00. .0 .000 000.0 0.000 000.0 000.0 0.2.000

0.0.0 000 0 0000 08 0 :00 080 .3500 5:5: 00
000 0 000.0 .80 .00 0 0000 .00 0 800.0833. .506 002 .m 00
00. 0 0:00 000.0 0000 000 0 000.0 02.0.0230. .3500 .02 m .0
.00 0 .0. 0 080 0.0.0 0.0 0 .000 m0...0000020002._ 00
000.0 000.0 02.0 000.. 0.... 0. .... 39.000

0.0.. ...0 0 0000 0.0.0 0.0 0 000.0 000.02.. .2. 0.200 .u: 0.
000 0 000 0 .000 0.0 0 000 0 0.00 80025.05 0.208.. m. 0.
00. .0 00. .0 .000 000.. 00. .0 0000 00.2.0002. 08.2.3 m. 0.
0000 000 0 0000 000.0 0.00 .00 . 00.0080005220050 w z
00... 0:... 000.0 0.00 000.. .000 39.000

000 0 800 .000 80 0 000 0 000 0 3.08 .8202 0. m
0000 .00 0 ..00 0.00 08 0 0000 .0008 0005-002 ... 0. am
0000 000.0 000 0 08 0 000.0 000.0 .003 02... m. .. m
000 0 .00.. .00 0 0.0 0 ..00 0 000 0 0.2.... 202...... .200 0 0. s
000.. 00. .0 000.0 0. 0.0 0000 0. 0 0 .003 0.5.0. 0
000.. 000.. 000.. 000.0 000.. 80.0 39.000

0000 000 . .000 ...0 0 000 0 000 0 200.0 0

. .0 0 000 0 000 0 08 0 0. 0 0 0. 00 .20 0008-083 0
000 0 000 0 000 0 000 0 .000 0000 08.08 .200 d 0
000 0 0.0 0 0: 0 .0. 0 000 0 000 0 8.02.0.0 W 0
000 0 0.0 0 000 0 000 0 000 0 .00 0 0500.0 .85. m. 0
000 0 0.... 0 0000 .0. 0 0000 0. .0 0.05.2900. 0003 u 0
000 0 ...0 0 0... 0 000 0 000.0 0. .0 000000.000. .020. 0
000.0 0.00 00. 0 ..00 0000 2.00 052.0. :0... .

0. 0. 0. 0. 0. ...
a. .0000 8:00.00... .... 0000 0.:
.m:M.2..O 0.0.0.000. O 00.000. 29.0000... 000038.... .3102 0.0.0.500”: .00....020.
0.0.—53¢.
00.0.3.3... 0550 00.2.0027”.— 02050300. 000.0504 00.2.0039. 520.....05m
m:OUS~Sm:_
naoaodoacm

 

 

 

.000. . 0.5.0000 00.00.00.000 .0. 02.50.000.80. 00.0.30 0:0 0.5.0000 0:000w005 .0 0.5. .0 0.0.0.). ...m 0.0.0..

2l3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

83 83 83 88.. 3835' 3
:8 ES 83 3;. o 3.83838 0N m
83 £2 - 8w 0 283 05 we fix mN m
3N8 N: o - «8 o Eoeegoo «N m.
08.; 0N3 88.3 83 3835
N8 8 N2 o - Soc .253 58:: NN
Soc 83 - N8 8 8.33833 3.98 .32 m NN
:8 _S o 83 3% o 8.3.838 338 32 W _N
z: .o «88 - NN3 mwsémussfii a
EN 83 - 2% 398m
:3. Eco - as o 398% 6: 925 m 2
23 3. ,_ - _ovo S=§§w5 $38.3 m N.
a: .o x: 8o - E 8 £288; 3223‘. m. 2
2N8 83 - £3 £23.32 322=§m w I
23 :3 - :3. 328m
83 28 o - _8 o 3&3 3532 2 ma
:8 o 28 o - N88 .958 028-52 H N_ .w
@880 So o - N8 o .23 8:: m. : w
3N3. oNv _ - a: o 9:9: 0:828 350 a o. m
0N. .o .2 8o - 83 :53 35a”. 0
$3 RNN - 8N3 398m
8: 8 N - 80 o SEC w
Omoc cmoc - _ _v o _03 “5336003 5
N88 zoo - 83 82:8 550 H 8
m8 0 as o - S. _o 8:25 m. m
23 as o - mNo o mag; .33 m. w
:5 o 3.0 o - 25 o E05835 ems)» u N
:o o _ _o o - 8_ o cozsaaxm aeé N
N5 0 NS o - ”Noe 9.55“. 33 _
NN NN _N ON
.3.an :o_3_:E:8< coaaaoaoo E2582:
SEE: _nzanu .8332 .8.qu .9332 m.:=ouu<
3:39
«gang—...”.—

 

 

.Eoo. . .8588 mzocowoxo
.8 8222.05 ewfigw was 3.588 mzocowonco .8 32 mo x532 .vm 2an

214

 

C.2. Livelihood Activities of Households

Table 25. Livelihood activites of households in five communities.

 

 

 

wood charcoal production

 

 

Primary Livelihood Activity Total Secondary Livelihood Total Tertiary Livelihood Total
abaca production 7 abaca production 1 banana farming l
carpentry 9 banana farming 3 carpentry 4
charcoal production 2 carpentry 8 coconut farming 4
coconut farming 72 charcoal production 3 community councilor 2
construction worker 2 charcoal trading 2 community security i
cook 1 coconut farming 29 construction worker 1
corn farming 1 community security i cook 2
family subsidy l cook 1 electrician i
farm caretaker 1 corn farming 1 fishing 5
fishing 3o fishing 7 hauling timber 4
forest farrnlng 4 handicraft 2 lowland farming 8
forestry l hired laborer 2 metal worker l
forestry and lowland farming l Jeepney driver 2 no 255
government employee 1 jeepney operator T piggery l
handicraft l lowland farming l2 renting house i
hired farm labor 3 masonry 2 retail store 2
hired labor 6 no 187 retail store & bakery 1
ice cream 1 rattan trading 2 rice farming l
jeepney conductor 1 renting 3 teacher 1
Jeepney driver 2 retail store 3 vines harvesting l
Jeepney operator 1 retail trading 4
laundry 1 rice farming l 1
local councilor 2 timber harvesting i
lowland farming 44 vegetable farming l
masonry 2 vines harvesting 2
midwifery 1 white clay mining 6
na 50
rattan harvesting 3
rattan marketing 1
renting 2
retail store 1
retail trading 2
rice farming 21
timber harvesting l
timber hauler 3
utility worker l
vegetable farming 4
vines harvesting 1
white clay mining 2

l

 

215

 

C.3. Various Examples of Approaches to SAM Evaluation

A number of approaches of evaluation result from examining the SAM. In
Chapter 5, the focus of evaluation was on natural resources exploitation. Below are

summary evaluation that pertain in general to community economic performance.

Level of Dependence

The variation of the level of contribution suggests a number of possible
explanations. These include lack of capacity for other forms of production, or immobility
or unavailability of some form of capital for production; ownership of factors of

production, and possibly initial endowment or wealth.

Table 26 shows that agriculture generates the most income for rural households.
Total household-production value consists of 49% from agriculture, 27% from forestry
(including fuelwood production and CBF M), and 23% percent from other livelihood that
includes fishing, wage employment, retail trading and other small-scale livelihood
activities. Therefore, households in five communities are more agriculture-intensive
rather than forestry-intensive. The overall forest exploitation that includes community-
based management program and fuelwood production a fourth of total production income
in 1998, the survey year. It is important to note that the larger value in this forest

production obtains from potential production that the CBFM reported (P 8,920,866 see

216

Table 12), instead of actual production and sale. Nonetheless, it provides potential
information on the depreciation of natural resources.

Table 26. Total value of production activities of the S communities.

 

 

 

 

 

 

 

Production Activity Values (Pesos) Proportion
Agricultural Farming 35,375,061 49%
Forest Exploitation 6,905,719 10%
Wage Employment 5077.387 7%
Retail Trading 3.072.002 4%
Fisheries 5.884294 8%
Other sources 2,833,365 4%
Wood-based fuel 3,582,927 5%
CBFM 8,920,866 12%
Total 71,65 1,622 100%

 

Income Distribution

On consumption of own-production, landless households have comparatively
higher values for non-agriculture-based production, particularly fuelwood. Both
household types showed no purchase of agriculture and forest products. Aggregate factor
receipts of landless households were lower than small-holders considering that the
landless comprise only 23% of total households. For consumption expenditures (market
purchases), landless households import expenditures total 74% while small-holders total
only 71% suggesting greater consumption of own-farm production by the latter.
Logically, wage employment and purchases from fisheries output is relatively higher for
landless households, due to lack of land to cultivate and produce agricultural crops for

own-consumption, essentially relying on "free goods."

217

Self-sufficiency in Production

Sufficiency of production output also suggests less significant import of
consumption goods. In the constructed SAM, if imports of communities exceed exports,
communities are net importers of consumption goods as a result of two possible
scenarios. One scenario is that prices of production outputs compared to prices of
consumption goods purchased outside of the community are considerably low. The other
is that production technology cost is relatively higher, because of potentially higher
imported input costs. The outcome remains that a considerable part of natural resource
exploitation remains "un-transacted" in the market. Thus, an aspect of this evaluation that
links natural resources and economic performance is to identify marketed or non-
marketed outputs of production. in the five communities, non-traded output for
aggregated household production was 23%. Total marketed component of all production
output was 77%. The marketed component covers local purchases/sales and exports
outside of the community. This is consistent with previous estimated figure of 25% of

GNP by James (1996) for national accounts.

A cursory analysis of forestry production by households reveals that 20% did not

enter the market (direct household consumption and used for other purposes), the rest

were sold outside of the community. Directly consumed forestry output considering the

218

whole community. that includes C BF M production, was 23%. This shows the increasing
emphasis of household exploitation of natural resources for trade in the market, because
of relatively high value-added relative to other production outputs. However, the
significant value of non-traded output and consumption of own-production suggest less
than full integration of the communities to the market; shadow prices diverge from
market prices; and, transaction costs are ubiquitous. Subsistence production, significant
divergence between shadow price and market price, and trade imbalances suggest that
certain production outputs remain unrecorded in national accounts. In most instances,
natural resources exploitation occurs but not recorded, hence, its condition remains

undetermined.

C.4. Valuation Approaches

The value-added of forest resources harvested by household and POs involved
with the CBFM program of the five communities was based on market value; that is the
stumpage value of timber calculated as shown in Table 27. This represents the rent
captured by the community in the exploitation of non-produced natural capital. CBF M
output were basically priced at market value. However, value of timber harvested was

based on residual stumpage price after costs of extraction were subtracted.

219

Table 27. Calculation of timber price (in Pesos) and proportion of cost components.a

 

 

 

 

 

 

Percent of
Pricing of timber harvest Value timber sales
value
Sales per bd ft 17.00 100.0%
Reforestation l .00 5 .9%
BEN RO/ Protection 1.00 5.9%
Savings/Livelihood 1.00 5.9%
Admin Cost 1.50 8.8%
Chain saw operator 2.75 16.2%
Slicing 1.50 8.8%
Hauling 4.00 23.5%
Forest Charges 2.50 14.7%
Trucking 1.50 8.8%
Miscellaneous expenses 0.25 1.5%
Estimated timber rent or
stumpage value 4.50 26.5%
Estimated net export value 2.00 11.8%

 

“ Based on the calculations by the C PEU lnc. officers in 1998.

Depreciation value was based on the imputed value of natural capital used in
production activities. The most widely used approach was stumpage valuation. Other

valuation approaches for various commodities are described below:

- Fuelwood consumed by households were either purchased from the market or
directly consumed production outputs. There is a divergence of prices of
fuelwood observed from responses to the survey. This is an indication of an
imperfect market. Therefore, in calculating the value of wood fuel, market
price of wood fuel in urban center or local market was used. Fuelwood valued

using the wage rate, calculated as wage rate in the locality multiplied by the

220

number of hours spent on harvesting this product, proved to be higher that

market price of fuelwood per unit. Thus, there is great divergence between the

shadow price of fuelwood and its market price;

Values in agriculture output were based on market prices;

Family labor following the general valuation for all activities represent

residual values after other factor value added were removed;

Other forestry outputs were based on market price both for conventional

factors of production and natural resource exploited;

Wage employment values were based on local wage rates. Wage differences

occurs in five communities; those closest to urban centers recorded higher

wage rates;

Retail trading values were based on market values;

Fisheries output were based on market values, both locally sold or in urban

centers;

Other sources were valued at cost; and

221

Natural capital depreciation value was based on rent on natural resources, and
computation differ for each activity. Household forestry activities were based
on stumpage value in harvesting timber and non-timber forest resources.

C BF M output were based on stumpage value after C BF M costs were
removed. Costs component for each natural resource vary depending on the
activity. Using common stumpage will overvalue some of natural resource
outputs and undervalue some. For instance, the stumpage value for timber
harvest by a household would differ from the stumpage value of that harvested
by the CBFM, because cost components and technology employed in

harvesting differ.

222

C.5. Simulation Runs with Varying Fire Occurrences and Optimal Level of Harvest

Spreadsheet simulation made use data from the stand and stock table of the three
POs at the Bicol National Park. The aggregate growing stock from these three tables was
540,196 cubic meters (yield per hectare multiplied by the total area of 3,290 hectares).
This figure is the initial opening stock of timber in the simulation model. Closing stock
was derived by deducting harvest, natural mortality and fire damages from the opening
stock and adding in-growth from existing growing stand and new growth (regeneration)

from opened areas. Table 28 presents various parameters used in the simulation model.

Table 28. Parameters used in simulation.

 

 

 

 

 

 

Variables/ Parameters Unit of Measure Values
Market price of timber P/bd fi 17
Harvest damage values
Abandoned logs % 3.75
Butt trimmings % 2.5
Stumps % 0.1
Residual damage % 50
Tops and branches % 33.75
Forest fire damage % 5.2
Harvest volume per hectare cu m/ha/yr 184.07
Initial opening stock cu m 540,196
Initial basal area cu m/ha 8.0
Initial Years elapsed afier logging years 25.0
Growth rate per hectare cu m/ha/yr 3.9

 

The growth function (Balangue, 1991) used to derived the growth was the Revilla

model:

Yield = 0.84288+O.40458*ln(BPO)+0.33674* In (YEAL)+0.46925* In (BPO)* In(S)

223

Where:
BPO — dipterocarp basal area at YEAL = 0
YEAL — years elapsed after logging

S — measure of site quality

A number of simulation runs were done to evaluate various scenarios. Of
particular significance to this study are: (1) Simulate stock trend at various levels of
harvest expressed as hectares harvested, (2) opening and ending stock at 12 hectares of
harvest and varying fire occurrences to present optimal level of harvest and (3) trends of

stock based on the three harvest scenario discussed in Chapter 5.

Table 29 presents stock scenario at various harvest levels. Table 30 presents
simulation results that evaluates the harvest levels at various fire occurrences. Table 31
presents stock levels for three harvest scenarios discussed in Chapter 5. Figure 8 presents
the trend of opening and closing stocks for three harvest options discussed in Chapter 5.

Trend of site disturbances is also presented.

224

Table 29. Simulation trials with varying area harvested and fire occurrences.

 

 

 

 

 

 

 

 

 

No. of Hectares Beginning Ending Difference Volume Freq of
Trials Harvested Stock Stock Harvested Fires

1 74 540,196 194,999 345,197 13,621 1

2 73 540,196 173,931 366,265 13,437 1

3 60 540,196 273,901 266,295 1 1,044 1

4 50 540,196 349,700 190,496 9,204 0

5 49 540,196 328,715 211,481 9,019 l

6 48 540,196 334,752 205,444 8,835 1

7 46 540,196 329,643 210,553 8,467 2

8 45 540,196 374,982 165,214 8,283 0

9 44 540,196 390,125 150,071 8,099 O
10 42 540,196 351,502 188,694 7,731 2
1 1 41 540,196 353,250 186,946 7,547 2
12 40 540,196 377,563 162,633 7,363 1
13 39 540,196 385,516 154,680 7,179 1
14 38 540,196 419,980 120,216 6,995 0
15 37 540,196 345,840 194,356 6,81 1 3
16 36 540,196 404,991 135,205 6,627 1
17 35 540,196 412,416 127,780 6,442 1
18 34 540,196 441,953 98,243 6,258 0
19 33 540,196 452,949 87,247 6,074 0
20 32 540,196 400,897 139,299 5,890 2
21 31 540,196 457,860 82,336 5,706 0
22 30 540,196 464,448 75,748 5,522 0
23 29 540,196 444,439 95,757 5,338 l
24 28 540,196 424,292 1 1 5,904 5,1 54 2
25 27 540,196 431,334 108,862 4,970 2
26 26 540,196 416,490 123,706 4,786 3
27 25 540,196 470,551 69,645 4,602 1
28 24 540,196 502,506 37,690 4,418 0
29 23 540,196 452,107 88,089 4,234 2
30 22 540,196 486,551 53,645 4,050 1
31 21 540,196 464,095 76,101 3,865 2
32 20 540,196 468,51 1 71,685 3,681 2
33 19 540,196 529,338 10,858 3,497 0
34 18 540,196 536,617 3,579 3,313 0
35 17 540,196 540,835 -639 3,129 0
36 14 540,196 529,516 10,680 2,577 1
37 13 540,196 563,625 -23,429 2,393 0
38 12 540,196 544,371 -4,175 2,209 1
39 12 540,196 489,045 51,151 2,209 3
40 1 1 540,196 492,992 47,204 2,025 3
41 10 540,196 581,607 -41,411 1,841 0

 

225

 

Table 30. Simulation to determine the optimal level of harvest at varying fire

 

 

 

 

occurrences.
No. of No. of Beginning Ending . Volume Freq of
Trials Hectares Stock 2 Stock 2 Difference Harvested Fires

1 12.00 540,196 572,188 -31,992 2,209 0
2 12.00 540,196 571,682 -31,486 2,209 O
3 12.00 540,196 571,114 -30.918 2,209 0
4 12.00 540,196 571,043 -30,847 2,209 0

5 12.00 540,196 570,128 -29,932 2,209 0
6 12.00 540,196 570,029 -29,833 2,209 0
7 12.00 540,196 569,901 -29,705 2,209 0
8 12.00 540,196 542,682 -2,486 2,209 1
9 12.00 540,196 542,108 -1,912 2,209 l
10 12.00 540,196 541,615 -1,419 2,209 1
1 1 12.00 540,196 541,088 -892 2,209 1
12 12.00 540,196 541,016 -820 2,209 1
13 12.00 540,196 540,827 -631 2,209 1
14 12.00 540,196 540,015 181 2,209 1
15 12.00 540,196 539,904 292 2,209 1
16 12.00 540,196 539,532 664 2,209 1
17 12.00 540,196 539,476 720 2,209 1
18 12.00 540,196 516,789 23,407 2,209 2
19 12.00 540,196 516,627 23,569 2,209 2
20 12.00 540.196 516.331 23,865 2,209 2
21 12.00 540,196 516,199 23,997 2,209 2
22 12.00 540,196 515,876 24,320 2,209 2
23 12.00 540,196 515,134 25,062 2,209 2
24 12.00 540,196 515,112 25,084 2,209 2
25 12.00 540,196 515,040 25,156 2,209 2
26 12.00 540,196 514,092 26,104 2,209 2
27 12.00 540,196 514,056 26,140 2,209 2
28 12.00 540,196 513,972 26,224 2,209 2
29 12.00 540,196 512,936 27,260 2,209 2
30 12.00 540,196 489,947 50,249 2,209 3
31 12.00 540,196 489.090 51.106 2,209 3
32 12.00 540.196 488,401 51,795 2,209 3
33 12.00 540,196 488,195 52,001 2,209 3
34 12.00 540,196 487,878 52,318 2,209 3
35 12.00 540,196 487,036 53,160 2,209 3
36 12.00 540,196 465,915 74,281 2,209 4
37 12.00 540,196 465,068 75,128 2,209 4
38 12.00 540,196 464,154 76,042 2,209 4
39 12.00 540,196 463,214 76,982 2,209 4
40 12.00 540,196 462,052 78,144 2,209 4
41 12.00 540,196 439,967 100,229 2,209 5
42 12.00 540,196 438,357 101,839 2,209 5
43 12.00 540,196 436,758 103,438 2,209 5
44 12.00 540,196 434,920 105,276 2,209 5
45 12.00 540,196 165,414 374,782 2,209 2

 

 

 

 

 

 

226

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

.. 8: N3 .2 an .82 28N N822 N28. 82.2... 88...... N228 84.82. on N
o .E. 82 ..Nm an .82 8.x .E... 8 2.32 8.82. 238 88.2 ... .88 2. ..N
o .... ... NN .2. EN .82 EN N .32 85.: N ... ......m 23.28 8N.NNN 88.8% .... MN
8 ...... 2.: 2... mmmN .82 .....N 88.88 832 38.8% 42.88 25.3 82% 2. NN
o 8... ..NNN 8.. an .82 EN 42.88 ...38 82% SNNQ 8...: 83...... 8.. .N
. «N4 ...MN .8 “RN .82- 8% 8N8“ 82.42 84......“ 84.8% 2.5% 88.88 2. ..N
o E. .82 8 EN .82 82 82.5% 85.2 ..NNNNm 88.8% 28.8.. 48.88 .... 2
o 2... SN 2... mmmN .82 NE 88.8. 2.38 .8de 88.28 ....o...Nm 8:88 2. 2
o NmN 82 an 2.2 .82 :8 5.28 4.5.48 .58. .2..me 8.8.5. 822 N.. 2
.. ... 8m 8 an .82 85 45.8% 8.38 838 48...: 82.2 828 ... 8.
o ..2. N8N 88 RN .82 .8... 48.88 82.2 82.2. 48.5 8.88 ..aNNmm .... 2
o 82 :2 8m 22 .82 ...: :22 88.88 42.88 28.82 22...: 2.8.88 2 ...
o 88 2.: 8.. an .82 82 28.82 82.8 2.8.88 .828 42.88 8.82 ..N 2
o 8N. ..8 2. mmmN .82 an :38 42.8.. 84.88 8...... 8.3.3.. 3.88 8 N.
.. SN 2.... am an .82 82 88...? 83.2. 2.28 N382 2.2... 22.8 3 :
o 2.. .NNN 2.. WEN .82 82.. 2.8.28 82... 22.2 N882 2.8.2. 8.....2 mm o.
o 8 8m 8. an .82 8.... NNNfim 2.8.. 2. 82......“ E. . a ..N.2... 2.88 ..m a
o 8.. EN ...: an .82 8.... E. . a ..N.2... 2.98 88.28 .882. 23.88 2 w
o 8.. 8: 2.8 an .82 2.... 88.82 3382. 23.82. 2.8.2.8 2.5:. 88.82 NM N
o 2 ..2 2 2.2 .82 :2. 2.8.2.. 3.2.. 8.88 88...... 82...... 83mm .... 8
o N.. 8NN 8 an .82 8:... 82...... 82...... 832 58% 832. 2.32 ..m m
o 3.. NmmN 2.. EN .82 2.... 88... 832. 2.32 2...“: 82.2.8 88.8 8N ..
o ...m ....NN 88 22 .82 ..2... 2......“ 82.88 88.8 8.2.. 82...: 8N8. ..N m
o ... N .2. .8 EN .82 ..2... 8.2.8 8...... 38mm 88. . ... 8.....88 28.88 NN N
o .2 2K aNN mNmN .82 ....... 8a.... 8.....on 2...on 82...... 82...: 82...... 8N .
H

m m. m N ow N M N H H H m D .8. D N. D W H M 9 m A A

mm m. Wm mm m m M mm. mm. mm mm .3 mm a m

...... mm mm mm m N. ... a... a... no... he 8.... m... w ...

0 .... Ce 7.. .l 0 1 p. __

9 N C. Z l. D.

 

 

23:... .8 368m ,.o @620 can chugo .0.. S: coca—25m ,.o 28:65 .3 2an

227

62:82.. 88 E... .2853 .33.... 025 .8 :85 3.8.0 2... wESnO ,.o 2.2% .m 8%:—

 

 

 

 

 

 

 

 

 

  
 

 

 

 

 

 

 

 

 

 

 

 

 
  

 

 

 

 

 

 

 

 

 

 

 

 

228

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

23>
RuwmumuuezSSL 33>
[I F p p h u b p _ _ p b p P p _ p p h h p n h p o z z t L L L
ao.<_u~o._. 9 7w 6 9 8 0 I. .7 Ir
MG05<_O~OF It... i l “““ Tcom M- . . . _ . N . . p . . . . p p p p . . . . . . 2 r COO.MPM
I I Fwo.<_28.+ . m m xooaw 9.60 0 it: 2 1 Y 8°de
8.. P w m .605 as: Olol . . 8°83 m.
83 m raw 25.88 m
I . B
83.. w # g 8.. 88 u
m P {w , a 08.03" W.
83 u f .. . . [1, 833 n
. B .. 58.8... m
. o8 N 8°83
83 o8.o$
59.0“. 526.0 ucoomw No 3.2 30... «552.331 coo; 83.552
33> Z Z l l w..wl0> L
mNNN.N2tm.9:aNmN. 9 Z 6 9 8 0 I. v t .
.......L...r+y..........rO ...p......L|r»..»...._.... 00°C”?
286 286+ 1 ; 1 - . I.
Nxoow 05:08 LI \1 f 80.2: m. wwxwwomwowflnwm‘w IT. 000 CG? m
m J.” Sodom M
838 .
m / ./ ooo 88 ml
. n .
82.8 m ooo own m
833 A... ooodmm m
n
, 838 M 1.5.! ooo own M
Sodom ooo com
.82»... .388... 2.8.2.8 5.3 .85... comoaen.

 

 

 

 

 

 

 
    

31293 02112 3