A NEW REVENUE TRADEOFF FOR IRRIGATION: STABILIZATION OR MAXIMIZATION

Abstract

Data from summer rainfall irrigation areas in Australia show that very large tradeoffs can exist between small arm developed for irrigation yielding low limn and low variability of annual net revenue, mid large areas developed for irrigation yielding high mean and highly variable annual net revenue. Costs of developing and equipping land for irrigation, land and water opportunity costs as well as price elasticity of demand for irrigation inputs and outputs are some of the factors that an impact on the size of tradeoffs. Nevertheless, the size of the potential gains from ‘spreading water more thinly’ indicate that examination of the potential advantages and disadvantages could well be worthwhile in other areas. One of these may well be South Africa in light of recent legislation which breaks the previous tie between an irrigator's entitlement to water and a specific parcel of land.