Economic gains of improving soil fertility and water holding capacity with clay application: The impact of soil remediation research in Northeast Thailand

College

School of Economics

Document Type

Report

Publication Date

2009

Place of Publication

Colombo, Sri Lanka

Publisher

International Water Management Institute

Abstract

Using data from a survey of 250 farmers and applying different impact assessment methods, this paper provides an ex-post impact assessment of the Soil Remediation Research Project undertaken by IWMI in Northeast Thailand during 2002-2005. This project demonstrated and promoted the application of clay technology as a quick and cost-effective means of improving the fertility and water holding capacity of sandy soils.

With the empirically estimated average impacts of this technology, and the clay using area observed in the sample (176 hectares [ha]) and that estimated for the region (5,600 ha), the overall impact and economic viability of this project are evaluated during 2002-2008 for both the sample and also at regional level. Recognizing the roles of partners and others, the share of benefits attributed to IWMI are only 50 and 10% for the sample and regional level evaluations, respectively.

From an exclusive IWMI perspective, the project has a net present value (NPV) of US$0.41 million involving an internal rate of return (IRR) of 36% and a benefit-cost ratio (BCR) of 2.44 in the context of the sample. But, in the larger context of the region, it has a NPV of US$21 million involving an IRR of 267% and a BCR of 75.

Since impacts cover only direct income benefits, and since their evaluation involves conservative assumptions on benefit calculation and attribution, these estimates represent only the lower bounds of the true size of the project's impact. Despite an apparent soil focus, the evaluated impacts also equally capture the effect on yields of an improved soil water holding capacity.

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Disciplines

Agricultural and Resource Economics | Development Studies

Series Title

IWMI research report ; 130

Keywords

Soil fertility—Thailand; Soil remediation—Thailand; Clay

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