Irrigation water pricing: the gap between theory and practice (original) (raw)
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The Lifetime of an Idea 5 3. Financial autonomy. 'The way in which fees are assessed, collected and expended is more important than the actual level of fees in improving system efficiency and effectiveness. The most critical factor is the level of fiscal autonomy of the irrigation agency, i.e. the extent to which the level of its operating budget is tied to the amount of revenue generated by irrigation systems operations. This provides an incentive for cost-effective goaloriented performance that is otherwise often weak or lacking' . 4. Contextualized cost recovery. The principle of charging for water should be contextualized to consider ability to pay and the overall taxation of agriculture, indirect charges often providing an indirect (but straightforward) means to recover investment costs. Cost of collection needs to be evaluated carefully, price structures tailored to the particular situation and prices indexed. The evaluation of what should be the ideal level of O&M activities should receive more attention.
AGRICULTURAL IRRIGATION PRICING: REVIEW OF THEORIES AND PRACTICES
irrigation and drainage journal, 2019
Water 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.
Pricing irrigation water: a review of theory and practice
Water Policy, 2002
Increasing economic pressures on water resources are causing countries to (re)consider various mechanisms to improve water use efficiency. This is especially true for irrigation agriculture, a major consumer of water. “Getting prices right” is seen as one way to allocate water, but how to accomplish this remains a debatable issue. Methods of allocating water are sensitive to physical, social, institutional
Pricing Irrigation Water in Developing Countries
Journal of the American Water Resources Association, 1983
Alternative combinations of water pricing and regulations are possible in allocating irrigation water. The best combination will depend on the value of water, ability to control deliveries, desire t o subsidize agriculture, ownership traditions, crops grown, return flows, drainage problems, staff training, ability to collect fees, the number of farmers involved, etc. Marginal cost pricing is just one possible alternative and it is more a way of thinking about prices rather than a set system. The possibilities for achieving an equitable and efficient distribution of water are improved if some form of marginal cost pricing is included in the system of water charges.
Irrigation water pricing policies and water resources management
As water is a state subject in India, an enormous variation of irrigation water pricing across the states is noticed. Revenue collection under irrigation water charges of the states is not encouraging. The present paper reviews the structures of water pricing mechanism in different states of India and suggests a way to achieve sustainable water resources management in India. Various reports, water policy documents, and major recommendations of the irrigation commission were reviewed and analyzed. It was observed that low revenue collection is mainly due to the low rate of water taxes, no periodic revision, and flaws in the current revenue collection mechanism across the states. The water regulatory authority should be made a statutory body to manage various water uses and their fair pricing. A volumetric pricing system can be implemented in wells and tube-well-irrigated areas and for surface irrigation, and this requires considerable investment in irrigation water supply infrastructure and development of operational plans. Until a well-developed volumetric system comes into practice, the current system of revenue assessment and collection must be rationalized and simplified. An appropriate power tariff policy for rural areas and inclusion of the irrigation sector in a ground water conservation fee is required.
Why irrigation water pricing is not widely used
Current Opinion in Environmental Sustainability, 2019
Despite its obvious advantages, pricing irrigation water is not widely practiced because it is not easy to deploy effectively. Water authorities require an understanding of the objectives they hope to gain from it, the performance different pricing instruments have and the preconditions that must be met to enable them to work. Also, pricing instruments work under assumptions that do not hold in an environment where multiple market failures exist and their introduction may lead to a number of unintended consequences those who operate irrigation systems never considered. The aim in this paper is to outline the difficulties that are associated with implementing pricing instruments in the irrigation sector.
Economic Aspects of Irrigation Water Pricing
Canadian Water Resources Journal, 2005
Worldwide, irrigation water consumes the bulk of renewable fresh water resources. As water demand increases with rising living standards and population growth, and as prospects for water diversion (extraction) are limited in some regions and nonexistent in others, the course of water policy left open is to increase efficiency of water use. This requires taking account of the full cost of water and the way to achieve this goal inevitably leads to some form of water pricing. Yet, water policy makers and economists are far from agreeing on what constitutes the "right" price of water in any given circumstance and how this price is to be charged. This paper aims to clarify and reconcile some of the conflicting views by discussing the economic aspects underlying irrigation water pricing and their implementation in practice. Résumé : À l'échelle mondiale, l'eau d'irrigation consomme la majorité des ressources d'eau douce renouvelables. Au fur et à mesure que la demande en eau s'accroît proportionnellement à l'augmentation du niveau de vie et la croissance de la population, et étant donné que les perspectives de détournement des cours d'eau (extraction) sont limitées dans certaines régions et inexistantes dans d'autres, il ne reste plus qu'à intégrer à la politique de l'eau des mécanismes en vue de rendre l'utilisation de l'eau plus efficace. Nous devons alors prendre en considération le coût total de l'eau et, pour atteindre un tel objectif, il faut inévitablement en arriver à une forme quelconque de tarification de l'eau. Pourtant, les décideurs et les économistes sont loin de s'entendre sur ce qui constituerait le « juste prix » de l'eau, dans tout contexte donné, et sur la façon de prélever ce prix. La présente communication cherche à tirer au clair et à réconcilier certains des points de vue divergents en abordant les aspects économiques qui sous-tendent la tarification de l'eau d'irrigation et sa mise en oeuvre dans la pratique.
Economic Instruments and Irrigation Water Management
The use of economic instruments in irrigation management has been widely promoted over the last two decades. Pricing policies were expected to improve operation and maintenance, conserve resources, and promote reallocation of irrigation water towards higher-value crops and economic activities. The emerging picture, however, is that of a gap between stated objectives and expected benefits on the one hand, and the actual and foreseeable impacts of these policies, on the other. While price mechanisms have shown their usefulness in the energy and water supply sectors (albeit with variations according to context), these results cannot be easily extrapolated to the public irrigation sector, which is largely composed of large-scale gravity irrigation scheme. It is indeed crucial to distinguish between gravity irrigation and pumping schemes, for which the costs of abstracting water are higher and somehow proportional to the volume of water used; and among pumping schemes between state pumping stations (e.g in Northern Vietnam or parts of China) and pumping by individuals; and among the latter between shallow (often dug) wells and deep-wells, for which pumping costs maybe very high and water tables dropping.