Economic and financial analysis on rainwater harvesting for agricultural irrigation in the rural areas of Beijing

Abstract

Since 2006, around 600 rainwater harvesting systems have been constructed for agricultural irrigation in Beijing. The financial and economic implications of using these systems are discussed less. It is important to understand the effectiveness of the investments spent on the rainwater harvesting systems. The paper aims to analyze economic and financial performance of the constructed rainwater harvesting systems in rural areas of Beijing through the method of cost benefit analysis. The economic analysis focuses on determining the contribution of rainwater harvesting systems to the development of society, carried out from the point of view of government. The financial analysis allows comparison of the financial implications of using groundwater with using rainwater for agricultural irrigation from the point of view of individual participant, namely the local farmers. The results show that the rainwater harvesting systems are economically feasible. This means rainwater harvesting have positive effects for society. However, the financial feasibility of rainwater harvesting systems depends on the charge for groundwater and on the size of the rainwater harvesting systems. If groundwater is not charged, the rainwater harvesting systems are not financially feasible. If groundwater is charged at 2 Yuan/m 3, only large size systems are financially feasible while small and middle sizes systems are not financially feasible. Under these circumstances, only large systems can run smoothly, while farmers may not use the small and medium-size systems.