Innovative Mechanism for Integrated Watershed Management in

Cidanau

Landsat Image Cidanau Watershed

Logical link Cidanau Watershed Problem

Integrated Watershed Management

Environment Services Implementasi in Cidanau Watershed

Fund and researches related to PES:

1. Study of willingness to pay, Isabel van de Sand student of Imperial College London, 2004;

2. Implementation of up – down stream relationship concepts by PES mechanism, IIED, 2005;

3. Study of chemical fertilizer usage impact to sosio-economic condition, Amanda J Kiely student of Imperial College London, 2006;

4. Study of PES impact to member of Forestry Farmer Group and non-member Forestry Farmer Group, ICRAF, 2007;

5. Strengthening of PES, ICRAF, 2008;

Current PES Location in Cidanau Watershed

Cidanau Environmental Services BuyerPeriod : 2005 - 2014

No. Pengguna (buyer) Type of Business 2005 -2014 (US$)Presentase

(%)

1 PT. Krakatau Tirta Industri Water Company 183,333.33 86.27%

2 Pemerintah Provinsi Banten Government 29,166.67 13.73%

Jumlah 212,500.00

No. Farmer Group Location TA (Ha)Total

Member (person)

Contract Periode

RemarksBegin End

1 Karya Muda II Citaman – Ciomas 25 43 30/04/2005 29/04/2010 US$ 100/ha/year

2 Maju Bersama Cibojong – Padarincang 25 34 30/04/2005 29/04/2008 Contract Discontinued

3 Alam Lestari Cikumbueuen – Mandalawangi 25 78 07/01/2008 06/01/2012 US$ 100/ha/year4 Agung Lestari Kadu Agung - Gunung Sari 25 31 07/01/2008 06/01/2009 Contract Discontinued

Total 100 186

Seller of ES in Cidanau WatershedPeriod : 2005 - 2009

Period : 2010 - 2014

No. Farmer Group Location TA (Ha)Total

Member (person)

Contract Periode

RemarksBegin End

1 Alam Lestari Cikumbueuen – Mandalawangi 25 78 07/01/2008 06/01/2012 US$ 100/ha/year2 Karya Muda II Citaman – Ciomas 25 43 28/08/2010 27/08/2010 US$ 146/ha/year3 Karya Muda III Citaman – Ciomas 25,20 49 28/08/2010 27/08/2010 US$ 100/ha/year4 Alam Sejahtera Ramea – Mandalawangi 25 58 17/06/2011 16/06/2016 US$ 100/ha/year5 Harapan Maju Panjangjaya – Mandalawangi 26,80 77 17/06/2011 16/06/2016 US$ 100/ha/year6 Karya Bhakti Ujung Tebu – Ciomas 26,96 36 14/06/2011 13/06/2016 US$ 100/ha/year Total 153,96 341

Environment Services Payment Impact

1. In addition conserving the trees, the farmer group also planted more trees than the agreed number of trees. The farmer group planted more than 12.500 trees in 25 hectares;

2. There were improving economic ability and the social order of society, those are:• Improving nutrition consumption;• Having a chance to save gold as a deposit;• Having a chance to higher education;• Having a chance to develop communal livelihood;• Rehabilitating public network of water pipe;• Helping the orphans and widows;• Rehabilitating the worship building.

3. The stakeholders’ consciousness of conserving watershed hydrological function was improving, not only for economical purposes but also for supporting sustainable life;

4. Cidanau becomes a reference study location for integrated watershed management in Indonesia and other countries; PT. Krakatau Tirta Industri, as a buyer of Cidanau environmental service, is nationally recognized as green company that have willingness to pay the environmental service voluntarily;

5. As base of integrated watershed management, it needs a regulation to improve management and environmental service.

Priority Villages & Projected Farmer GroupFor Environment Services Payment Improving Location

VillagesTotal Area

(Ha)

Projected Farmer Group

Cikumbueun 651,32 5 Panjangjaya 80,77 2 Ramea 415,01 2 Batukuwung 173,62 2 Cibojong 259,55 2 Kadukempong 416,55 4 Kadubeureum 322,79 3 Padarincang 147,02 1 Citasuk 258,59 2 Ciketug 129,80 1 Cisitu 122,90 1 Citaman 59,30 1 Panyaunganjaya 126,08 1 Sukarena 52,01 1 Ujungtebu 149,19 2 Total 3364,48 30

Priority Location for Environment Service Wider

Potential environmental services payments from Cidanau water usage based on the Isabel van de Sand study (2004) at a price of US$ 0.042 per cubic with the use of 1.100 m³ / sec, the money can be mobilized from 36% water user of who have a willingness to pay US$ 520.344,000 per year.

Meanwhile, to pay environmental services to the seller, with the assumption of US$ 100 per hectare per year for the area of 3364.483 hectares, requires US$ 336.448,250 per years.

Buyer’s Funding Projected & Seller Payment

Buyer Type of Business 2014 - 2019 (US $) %

PT. Krakatau Tirta Industri water company 104.167 55,25%

PT. Asahimas Chemical Chemical company 12.500 6,63%

Pemerintah Provinsi Banten Government 71.875 38,12%

Amount   188.542  

Assumptions:PT. KTI pay US$ 20.833 per year and Pemerinrah Provinsi Banten pay US$ 14.333 per year

Contract Allocation Mechanisms

Supply (interested farmers joining the PES) exceeding demand (budget availability from the buyers)

Individual auction as the alternative to allocate contract efficiently

The individual auction will not be applied, the reasons are:

• The local farmers engage in groups, not as an individual contract

• Different contract values within group members may raise internal conflicts

• Low educational level of the participants: lack of knowledge on the auction process, how a PES contract work and its implementation. Group-level implementation is expected to induce collaborations and self-support-system among the members

Collective “Auction” Method

• Conduct participatory landscape assessment (transect walk) to identify environmental problem hot-spots with the local farmers;

• Discuss possibility of contract contents with the farmer groups;

• Initial awareness raising about PES and its proposal development for submission to the FKDC;

• The proposal will consist of:

1. Institutional performance

Group PES workplan for the next 5 year based on the findings of participatory landscape approach, include: Land management Tree management: thinning, rehabilitation, maintenance; Utilization of PES money.

Basic rules and governance issues; Women involvement;

2. Detailed Land Management:

• Agriculture Calendar to determine planting time and potential income from various agroforestry products;

• Simple construction plan for reducing sedimentation (ridging, sediment pits, vegetative strips)

• Participatory water monitoring

3. Benefit Sharing

• Procedures of payment sharing among group members

• How they will utilize the money.

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