Mekong River Commission

Comparing the costs and benefits of the annual Mekong flood is difficult. Some level of benefit accrues in all years but significant costs do not. For costs to arise the flood, in terms of peak discharge and water levels, has to exceed a certain threshold. The costs are then a function of the magnitude of the exceedance and the consequent depth of inundation, its duration and areal extent and the value at risk in the flooded areas. The latter is highest over the Cambodian flood plain and the delta. Average annual regional flood costs do not therefore provide a statistic that is directly comparable to the financial benefits, which in any case are systematically increasing, particularly in the agricultural sector.

However, a generalized comparative assessment is useful in that it revals just how much larger the benefits are compared to the much more often quoted figures regarding costs. For example, the annual value figure for the regional fishery of US$2.85 billion refers only to that at the first point of sale. In comparison, the estimated annual costs of flood damage in an average year such as 2004 only amount to US$76 million or just 2.5% of the fisheries benefit alone.

The additional benefit figures for the agricultural benefits are harder to assess since the linkage between the annual flood is not as clear as it is with the fishery. Flood recession rice production in Cambodia is reported to account for 32% of national production, valued at US$ 3.1 billion in 2006, based on a February 2009 international price of US$ 500/tonne The value of the agricultural benefit accruing directly from the flood in Cambodia is therefore US$3.1 billion x 0.32 = US$1 billion. Even if the value figure is reduced to a farm gate price of (say) US$100/tonne the benefit still amounts to US$200 million

In the delta in Viet Nam agricultural production in 2004 had a reported market value of US$3.5 billion. That this is a benefit of the flood is based on the argument that the 9 to 13 millions tonnes of sediment deposited annually across the delta, most of it during the flood season, has over millennia resulted in some of the most productive agricultural land in Southeast Asia, thus establishing the link.

Table 4.1 summarises the relative benefits and costs of the annual flood on this simple basis. Costs in terms of loss and damage are quoted both for an average year (2004) and for 2000, which witnessed the most extreme regional flood losses of recent decades.