Action-learning to develop and test upstream-downstream transactions for watershed protection services in Indonesia

An implementation phase country study for the international project Developing markets for watershed protection services and improved livelihoods.
Management of land in relation to water is a critical and topical issue in Indonesia. There is widespread public concern about the relationship between landuse and water quantity and quality, for example around floods and landslides, contamination of drinking water, and siltation of dams and waterways. Rural farmers are affected by declining availability of water limiting the number and area of crops grown. Globally there is an increasing willingness to address environmental issues through markets or payments for environmental services. Principally these approaches seek to compensate land managers for the environmental services that they provide. In the context of watersheds, these services relate mainly to the quantity and quality of water. For downstream users of water there maybe instances where payments to upstream land managers are a cost-effective way of maintaining or developing watershed-based environmental services. Functional examples of these relationships are scarce and their impact on the livelihoods of the poor are not well understood. Following the successful completion of the first stage of the implementation phase (May 2004 to March 2005), this workplan documents the outputs and the activities for the second stage (April 2005 to June 2006). The workplan was developed with the participation of the key stakeholders at a three-day planning workshop. The workplan has four outputs: Upstream-downstream transactions facilitated at three sites; Research to support the facilitation of upstream-downstream transactions conducted; National learning group convened and learning activities facilitated; Lessons learned documented and disseminated both nationally and internationally.