Abstract:
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.
