Addressing knowledge gaps between stakeholders in payments for watershed services: Case of Koto Panjang hydropower plant catchment area, Sumatra, Indonesia

Abstract

This study assesses the knowledge and perceptions of potential participants in a payment for watershed services (PWS) scheme in a watershed containing a reservoir and hydropower plant in Indonesia. Information was collected by interviewing watershed service providers such as upland farmers and downstream beneficiaries of services i.e. fishers, rest area operators, tourists, and the power plant manager. The study found some challenges if relying on stated preference values as a basis for a workable PWS scheme, specifically asymmetric information among stakeholders. Upland farmers did not realize their location within the upland of a watershed whose activities affect the quality of watershed services. Watershed users similarly do not know what activities their counterparts do in the upland. The study reveals market forces are a driver of livelihoods in the watershed. It concludes that prior to introducing a PWS scheme it is: 1/important to address any asymmetric information across stakeholders (e.g. through farmer extension services); and 2/consideration should be given to fluctuating commodity price subsidies so to sustain farmers’ livelihoods and ensure they maintain sustainable management practices for the uninterrupted and long term supply of watershed services. This study provides important lessons for other regions struggling with the same issues.