Irrigation Pricing Research Articles

Policy Note: Why Irrigation Water Pricing is Difficult

Could irrigation water pricing be reformed so that the practice of irrigation is less harmful? Answering this question requires insights into how water pricing reform works for different irrigators/crops each with its own price elasticity of irrigation water demand and water supply, and into the political complexity of irrigation water pricing reform. In particular, the full benefits and costs associated with irrigation are an important, but often inadequately understood, element in irrigation water pricing reform. In this paper, these insights are investigated using the theoretical concepts of supply and demand. It is shown that the market cannot provide the full benefits from irrigation and ignores the full costs. It is also shown that the shape of the irrigation water supply and demand schedules, the current equilibrium position and the size of the charge required to get to a socially optimum position all work against irrigation water pricing as a tool that can be used to reduce demand. These concepts can be used to assess the implications of irrigation pricing reform comprehensively, explicitly and consistently, so that the implicit subsidies and externalities become visible.

Financial and factors demand analysis of solar powered irrigation system in Boro rice production: A case study in Meherpur district of Bangladesh

Solar powered irrigation system (SPIS) has emerged as a promising technology in Bangladesh. The aim of this study to find the financial and environment importance of SPIS. This study also analyzes the factor demand and elasticity of substitute for SPIS irrigation in Boro rice production. The financial analysis indicate that SPIS user had significantly higher gross return, net return and benefit cost ratio (BCR) than diesel powered irrigation system (DPIS) user. The value of BCR for SPIS user was found 1.313 and 1.029 for DPIS user. Replacing half of diesel powered irrigation system can reduce more than one million carbon emission in environment from agricultural source. The result also revealed that irrigation system is highly inelastic and the result showed that an increase and decrease in price of irrigation wouldn’t have significant impact on demand of irrigation. The result indicates that for Boro rice production farmer had to use required amount of irrigation in field. Complementary relationship was found between seed and human labour, irrigation and human labour. Substitute relationship was found between machinery and seed, machinery and irrigation, machinery and human labour, machinery and fertilizer, seed and irrigation, seed and fertilizer, irrigation and fertilizer, human labour and fertilizer.

Agricultural irrigation in Hungary, with special regards to the water resources levy and agricultural water supply fee

The price of the agricultural irrigation is determined by the water resources levy and agricultural water supply fee, which are regulated under Article 15/A. (1) and Article 15/F. (1) of the Act LVII of 1995 on Water Management. A kind of dualism concerning the price of the irrigation can be observed in Hungary. On the one hand, the necessity to irrigate has to be reflected in the price due to the negative impacts of drought on crop production, although irrigation scores low on the hierarchy of water uses. On the other hand, the price must also express the value of water as an irreplaceable natural resource with limited renewable capacity. Based on the analysis of the said provisions, it can be concluded that though allowing derogations from paying for the agricultural irrigation can be justified in many cases, concerns can be raised regarding their uniform application without involving discretion regardless, among others factors, of the differences in the economic situation of the farmers.

How to promote effective irrigation pricing reform in northern China? Insights from the Taocheng District

ABSTRACTThere has been a growing interest in understanding the enabling conditions for the adoption of irrigation pricing reform worldwide. We enrich the literature on policy diffusion by comparing the effects of different mobilization patterns in northern China, showing how differences in incentives have hampered or fostered the spread of a collect-and-refund policy in Taocheng District. We find that the mobilization pattern of water authorities, with limited fiscal resources and weak political influence, provided little incentive for local authorities to adopt the policy. By contrast, the mobilization pattern of government chiefs mobilized local authorities to spread the policy across larger scales.

Agricultural Irrigation Pricing: Review of Theories and Practices

AbstractWater pricing and substitution of the costs of irrigation investment operation and maintenance have been controversial issues for a long time. The small charges for irrigation water are addressed, and additionally, the low level of farmers who pay the costs. In a few schemes, expense accumulation rates are close to zero, notwithstanding when water charges are well beneath the cost of operation and maintenance. Water prices are charged to farmers for two essential objectives. The first is to cover the operation and maintenance estimation with the goal that the investment is fiscally practical. Much of the time, costs will likewise need to incorporate a price for the cost of capital required to develop the scheme. This charge for capital is fundamental for future irrigation system investment. The second reason involves estimation to help farmers utilize less water per unit of yield or to deliver more prominent net economic returns per unit of water, or both.This paper summarizes irrigation water pricing methodologies and the related academic literature. Three water pricing methods are presented: volumetric, non‐volumetric and water market. For each methodology, potential impacts on water usage are postulated and supported by a summary of the academic literature. In addition, a summarized case study of irrigation water‐pricing practices and effects in Iraq is presented. © 2018 John Wiley & Sons, Ltd.

Profitability of winter maize cultivation in drought prone areas of Bangladesh

The study was conducted in four districts namely Rajshahi, Chuadanga, Comilla and Rangpur during 2015-2016 to estimate the effect of drought in maize production, technical efficiency and adaptation strategy of maize farmers, and explore related problems of maize cultivation in the study areas.Rajshahi and Chuadanga were selected as drought prone areas whereas Rangpur and Comilla were selected as favorable environment. A total of 200 farmers taking 50 from each district were selected randomly for the study. Per hectare total cost of maize cultivation in drought prone areas was found Tk. 92,582, whereas in normal environment it was Tk. 79,594. Per hectare average yield in drought prone and normal areas were 7576 kg and 8729kg, respectively. Per hectare net return of maize in drought prone and normal areas were Tk. 28,062 and Tk. 59, 871, respectively.On full cost basis benefit cost ratio (BCR) in drought prone and normal areas were 1.31 and 1.75, respectively. Result of semi-logarithmic regression model indicated that maize production was decreased by 22.4 percent in drought prone areas than normal environment. Loss of yield (70%), loss of plant growth (55%) and problem in flowering stage (43%) were reported to be the major effects of drought.The major adaptation strategies in the drought prone areas were increase number of irrigation (77%), increase amount of fertilizer (42%) and seed (31%) and change of planting date (30%). Higher price of irrigation (70%), lack of drought tolerant variety (48%) and lack of quality seed (31%) were the major problem in drought prone areas. Again,disease infestation (64%), lack of quality seed (41%) and high price of seed (36%) were the major problem in normal environment. Scientists should take attempt to develop drought tolerant maize variety.Bangladesh J. Agril. Res. 43(2): 219-234, June 2018

THE ANALYSIS OF ECONOMIC VALUE ON IRRIGATION UTILIZATIONATRICE FARMING IN BUAHDUA DISTRICT, SUMEDANG REGENCY, WEST JAVA

Water is a main factor on production input in rice farming. The need for water will increase as time progresses, but the availability of it is increasingly uncertain. One way to overcome the scarcity of water is the efficient using of water by determining the price of irrigation. This study aims to determine the price of water which is probably paid by farmers in rice farming, and to know the constraints faced by them. The research design used is quantitative descriptive. Primary data are obtained from 80 farmers taken by simple random sampling. Data analysis’ used here are analysis of descriptive, analysis of farming, and analysis of Willingness To Pay (WTP). The result of this research shows that the value of water rent in Buahdua Village is Rp. 4,428,031/ha/MT. Interviews show that almost all farmers are willing to pay the price of irrigation. The average value of PAP respondent is Rp. 61,813/ha/MT and the average value of TWTP is Rp. 28,751.891. Many obstacles faced by farmers in the use of irrigation is garbage, difficulty of getting water during the dry season, and damaged irrigation. This condition will affect the increasingly inefficient management of irrigation. Therefore, the economic value of water usage can be used as a reference asafees level by the farmers to reach efficiently.

Assessment of Water Rights and Irrigation Pricing Reforms in Heihe River Basin in China

The purpose of this paper is to understand the progress of water rights and irrigation pricing reform in Heihe River Basin (HRB) and their influence on irrigation application. The data came from a village and household level survey conducted in 2009 and 2014 in five counties in Zhangye City, HRB. The main component of reforming water rights was issuing water certificates to individual farmers. However, the share of villages that have done so dropped from 70% in 2004 to 28% in 2014. Water pricing reform raised the price of water. For the pricing of surface water, which consists of an area-based fee and a volumetric price, the volumetric price was increased. Econometric results show that amending water rights substantially reduced irrigation application in the early stage of reform (by 2009) but not in the later phase (by 2014). In contrast, higher water prices lowered irrigation applications significantly at both the early and later stages. Further analysis indicates that due to ineffective implementation, high cost of implementation due to large number of farmers, variations in water supply from year to year, and small farm sizes, little benefit is gained from trading. All of these factors played a role in the failure of water rights reforms.

Policies, economic incentives and the adoption of modern irrigation technology in China

Abstract. The challenges China faces in terms of water availability in the agricultural sector are exacerbated by the sector's low irrigation efficiency. To increase irrigation efficiency, promoting modern irrigation technology has been emphasized by policy makers in the country. The overall goal of this paper is to understand the effect of governmental support and economic incentives on the adoption of modern irrigation technology in China, with a focus on household-based irrigation technology and community-based irrigation technology. Based on a unique data set collected at household and village levels from seven provinces, the results indicated that household-based irrigation technology has become noticeable in almost every Chinese village. In contrast, only about half of Chinese villages have adopted community-based irrigation technology. Despite the relatively high adoption level of household-based irrigation technology at the village level, its actual adoption in crop sown areas was not high, even lower for community-based irrigation technology. The econometric analysis results revealed that governmental support instruments like subsidies and extension services policies have played an important role in promoting the adoption of modern irrigation technology. Strikingly, the present irrigation pricing policy has played a significant but contradictory role in promoting the adoption of different types of modern irrigation technology. Irrigation pricing showed a positive impact on household-based irrigation technology, and a negative impact on community-based irrigation technology, possibly related to the substitution effect that is, the higher rate of adoption of household-based irrigation technology leads to lower incentives for investment in community-based irrigation technology. The paper finally concludes and discusses some policy implications.

Impact of Lined Canal on Shallow Tubewell Irrigation and Their Acceptability by the Farmers

The comparative conveyance losses between lined and unlined canals, impact of water saving on command area development and irrigation cost, and farmers’ acceptability of lined canal in shallow tubewell (STW) irrigation schemes were studied during 2010-11 Boro season at three upazilas: Manikgonj Sadar of Manikgonj district, Dhamrai of Dhaka district and Mithapukur of Rangpur district. The conveyance loss was measured using inflow-outflow method and focus group discussion (FGD) was carried out with the pump owners and farmers to assess the impact of water saving on command area development and the acceptability of lined canal technology. Average conveyance losses were found to be 41, 48 and 45% in the existing earthen canals; 18, 21 and 24% in improved earthen canals; and 12, 11 and 13% in pre-cast canals at Mithapukur (M1), Manikgonj Sadar (M2) and Dhamrai (D) schemes, respectively. The water saving did not increase the command area in any of the schemes but reduced the irrigation time and saved fuel requirement for irrigation. On an average, 32, 23 and 30% fuel were saved by improved earthen canals where as 45, 46 and 48% were saved by pre-cast canals for M1, M2 and D schemes compared to earthen canal. The benefit-cost ratios of improved earthen canals were 1.36, 1.38 and 1.30 where as 3.36, 4.28 and 3.34 by pre-cast canals for M1, M2 and D schemes, respectively. The internal rate of return (IRR) from the investment on water distribution was over 50%. The lining technology was acceptable to pump owners, but did not impress the farmers who share the crop with the pump owners as price of irrigation or pay on the basis of irrigated area. In order to make the technology acceptable to the farmers, polices must be framed to share the benefits of lining by the pump owners with the farmers by reducing the price of irrigation water or through financial support of GO and NGOs for efficient use of STW irrigation system in Bangladesh.The Agriculturists 2014; 12(2) 116-125

Economic value of irrigation water: a case of major irrigation scheme in Sri Lanka

It is generally agreed that inefficient use of irrigation-water and poor performance of irrigation systems are critical issues; especially in the light of the apparent lack of water resources. This study attempts to determine the economic value of irrigation-water in a government properly managed irrigation project (GPMIP) by eliciting farmer’s willingness to pay (WTP) using contingent valuation method followed by single bounded dichotomous choices. A stepwise backward binary multivariate logistic regression model was used to measure WTP and to determine the factors that influence the variation in WTP. Primary data were obtained from 367 farmer households in Nagadeepa irrigation schemes in dry zone. The estimated value of irrigation water was Rs. 5,275 ($40) per hectare per season which is 8.6 percent of net income in paddy farming per hectare at present in selected irrigation scheme. Further, if farmers can increase further their household farming income by 5.9%, it is possible to cover additional cost which would be driven due to pricing irrigation water and it is not an unreachable challenge with proper irrigation services. One of the most important policy implications of this study is the possibility of restructuring the existing irrigation pricing system by taking into account the economic value of irrigation water. Such policy reform can encourage farmers to use irrigation resources efficiently by motivating improvement in water management practices and generating revenue for operation, maintenance and capital replacement and irrigation sustainability in the country. DOI: http://dx.doi.org/10.4038/jas.v9i1.6353 The Journal of Agricultural Sciences, 2014, vol.9, no1: 44-57

Assessment of Irrigation Pricing Policies: A Data Envelopment Analysis Approach

The European Water Framework Directive encourages pricing policy reforms in order to protect the environmental quality of water and promote its efficient use. This paper deals with two aspects of efficiency, namely economic and environmental efficiency, analyzed for different pricing methods. Volumetric pricing methods are compared with other indirect schemes (‘per area’, on ‘input’, on ‘output’ and ‘quota’) under three different water saving scenarios. The Data Envelopment Analysis (DEA) technique is used to assess the eco-efficiency of an eventual water pricing reform in the irrigated agricultural system of Capitanata, in Italy. Overall, findings point out that a pricing system based on ‘per area’ and ‘output’ will lead to the highest eco-efficiency, although this is not valid under any water pricing charge. The enforcement of water saving via pricing does not imply a higher eco-efficiency, mainly in the case of environmental efficiency. The use of the DEA approach appears useful in the assessment of water pricing policies where conflictive economic and environmental goals arise. It provides a methodology to support policy makers in the design of water policy pricing aimed at the enhancement of efficiency, both economic and environmental.

Implications of residential irrigation metering for customers' expenditures and demand

Installation of dedicated meters for residential irrigation systems, often called irrigation meters, can lead to unintentional consequences that may thwart a utility's intended purpose in promoting such meters. This article explores some of the financial and water use implications of separately metering and billing residential irrigation water under existing utility practices. The authors analyzed data on irrigation pricing and practices from 12 North Carolina utilities to draw generalizable observations about the effects of irrigation metering on customer expenditures and the inherent incentives on customer demand for irrigation meters and potential consequences on water use. This research found that water providers attempting to encourage water conservation by installing irrigation meters may be inadvertently providing incentives to increase irrigation water use. As they consider setting strategies and rates for their own irrigation‐metering initiatives, utility managers can use the lessons learned here to better integrate their water conservation policies with utility finances.

Irrigation pricing policies and its impact on agricultural inputs demand in Tunisia: A DEA-based methodology

This paper estimates farmers’ individual irrigation water demand functions employing the information hidden in individual farmers’ technical efficiency. This information is extracted through the development of a new deductive methodology based on inverse Data Envelopment Analysis (DEA) models. The empirical results for Tunisia show that farmers who are more technically efficient have less elastic irrigation water demand functions; these farmers would adjust demand only to a limited extent and they can afford the water price. In contrast, water pricing significantly affects those that are less efficient. These farmers shift towards a different cropping pattern using significantly less water and more land when the price of water increases. Thus, higher water prices would threaten this category’s livelihood if their efficiency is not improved. However, if the technical efficiency of these farmers were to improve, then it would be more difficult to reach water saving objectives since their demand will also become highly inelastic. The findings have important implications in view of the objectives of Tunisia water policy which include:full cost recovery, continuity of the irrigation activity, and water saving at the national level.

Valuing irrigation water using survey-based methods in the Tungabhadra River Basin, India

The paper discusses the challenges in using survey-based methods of economic valuation of water: choice experiments, residual value of water and water trading prices. The three different approaches to economic valuation of irrigation water are compared, all based on data from a farmer survey conducted in two irrigation command areas in the Tungabhadra sub-basin (Karnataka State, India). Prices reported by farmers for sale and purchase of an additional irrigation are of the same order as willingness to pay estimates derived from a choice experiment. Because of small number of water trades there is large variation in market-price based estimates. Financial returns to a given crop as a function of irrigation frequency show values that are both lower (for rice) and higher (for areca nut) than choice experiment estimates. Low convergent validity of different economic valuation methods of irrigation water, is in part due to the large variation in water availability and farm conditions across the watershed, but also because of methodological weaknesses. While recognizing these weaknesses, the paper shows that representative farm surveys using a combination of valuation methods can identify heterogeneity in farm conditions and preferences that may otherwise be overlooked when carrying out irrigation pricing reform.

Irrigation pricing alternatives for water user associations in Central Asia

In Proceedings of the Republican Scientific Practical Conference on Efficient Agricultural Water Use and Tropical Issues in Land Reclamation, Tashkent, Uzbekistan, 10-11 November 2010. Tashkent, Uzbekistan: Ministry of Agriculture and Water Resources; Tashkent, Uzbekistan: International Water Management Institute; Tashkent, Uzbekistan: Scientific Information Center of Interstate Commission for Water Coordination (SANIIRI)

From Local Experiments to National Policy: The Origins of China's Distinctive Policy Process

China's national policy formulation undergone economic transformation and shaped the making of policies in promotion of private business and stock market regulation. China's distinctive process of central-local interaction in policy generation is one of its core strengths in reforming its economy.

Book Reviews

Book Reviews

An empirical analysis of the impacts of irrigation pricing reforms in China

Water pricing constitutes a key component currently ongoing agricultural water policy reforms in China. It is used as a means to achieve two sets of goals: (a) improvements in irrigation efficiency and financial sustainability of irrigation systems and (b) enhancement of food self-sufficiency and rural farm income. Utilizing empirical data on the impacts of water pricing reforms in three large irrigation districts in China with diverse physical and socio-economic settings, this paper argues that water pricing, as a policy tool, is unlikely to succeed on its own in meeting these two sets of objectives. The reasons are related to a combination of infrastructure condition, farmers' lack of understanding of irrigation financing, and, more importantly, the perverse impacts that the price increases will have on agricultural output and farm income. The findings do indicate that pricing reform can improve water management when it is tailored to fit with the specific contexts of irrigation systems and is coupled with improvement in management transparency. However, for water pricing reform to contribute to the achievement of the broader national goals of food security, it needs to be packaged with additional policies and supported by rural investments.

Asset management modelling framework for irrigation and drainage systems: Principles and case study application

Sustainability of irrigation and drainage infrastructure poses many challenges to many irrigation authorities worldwide due to a mismatch between the actual cost incurred in the provision of irrigation and drainage service and pricing of this service. This shortfall often leads to inadequate expenditure on maintenance in the absence of adequate subsidies from government or other sources.