mp which will collect water from the San Miguel region and drain this to the Laguna Merin; a dyke to control flooding of the India Muerta. The total cost of these investments is estimated at US$ 50 M and a study is now beginning with funds from the InterAmerican Development Bank to identify the viability of this investment. At the same time, an environmental impact study will be carried out. However, this will last for only six months.
6. Environmental Impact and Wise Use of the Bañados del Este
There is little doubt that the Bañados del Este have enormous economic potential. The fertile soils currently support a major proportion of the countrys rice production, which is valued at a total of US$ 80 M in export earnings. Further, the Bañados are extremely important in cattle production which in 1983 contributed some US$ 250 M to the national economy. In addition, between the years 1976 and 1986, Uruguay exported Coypu skins of a total value of US$ 52 M, and FAO has estimated that in the 1970s, some 40% of the rural families in the Department of Rocha benefited from the exploitation of this species. And along the coast, an important fishing industry depends upon the productivity of the coastal waters and the quality and quantity of freshwater inflow.
Given the range of benefits which the Bañados provide, and given the many ways in which the government might invest in exploitation of these resources, it is clearly essential that their full value, and the full cost of their loss, be determined prior to any large-scale investment. Future investment in the Bañados should be based upon such analysis and consideration of the ways through which investment can yield long-term sustainable benefits from the resources, rather than short-term profit. By means of such careful planning and effective enforcement of existing or new legislation, it will be possible to achieve effective integration of many different activities which can be carried out in the Bañados. While this will certainly limit certain activities, such limitation will be in the best long-term interests of the communities which use the resources.
Available evidence suggests that previous investments in drainage in the Banados have not been based upon such careful analysis and have led to substantial socio-economic and economic costs. For example, by improving the drainage capacity of the Andreoni Canal in 1978, discharge of fresh water was increased along the Coronilla beach. This change in salinity is thought to have reduced the productivity of the offshore fishery and income from the associated artisanal and sport fishing activities.
Similarly, debris carried down by the canal littered the beach, dissuading bathers and triggering a substantial decline in the number of tourists and in the income of hotels and other tourist facilities in the area.
The loss of the wetlands and the associated fauna has led to a reduction in the exploitation of Coypu and to a decline in the importance of this source of income to the local communities. Also, certain of the water management works have led to an increase in flooding at certain times of year, rather than to a decrease. This increase in flooding has reduced the capacity of the wetlands to support the pastoral industry at certain times of year.
Not only has drainage yielded many costs, but the return on investment has in certain cases been lower than anticipated. For example, the India Muerta dam now irrigates only 4,000 of the 10,000 hectares that had been forecast (Vaz-Ferreira, 1987).
In the light of these observations, it is surprising that the 1986 loan from the InterAmerican Development Bank was preceded by an environmental impact assessment which detected no significant environmental impact that could destroy the renewable natural resources as a result of the project. This may have been a consequence of the short duration of the study, and it is therefore essential that, in future, environmental impact assessments are done in the most thorough manner possible. It is most likely that such studies, in order to be effective, 