Economic Valuation of Irrigation Water: The Case of Erere Woldia Irrigation Project in Harari Regional State, Ethiopia

Teshome, Addis (2010) Economic Valuation of Irrigation Water: The Case of Erere Woldia Irrigation Project in Harari Regional State, Ethiopia. Masters thesis, Addis Ababa University.

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Abstract

The growing demand for water in different sectors of the economy due to population pressure, expansion of economic activities combined with the increased climatic variability calls for the efficient utilization of the resource. Accordingly, the Ethiopian water policy and strategy considers water as an important economic good with some social objectives. To this effect, the policy advocates the introduction of site specific irrigation water fee as a tool to stimulate the sustainable development of the sector. The most important site specific factor is the willingness to pay of the farmers. Since any irrigation pricing endeavor should consider this factor, this study was undertaken in Harari Regional state, Erere Weldia small scale irrigation project, so as to provide a baseline information for the local authorities on the willingness to pay of farmers for improved irrigation water services. The study employed a multi- stage purposive sampling and random sampling techniques in the selection of the study site and the respondents, respectively. Primary Data was collected through structured questionnaire, in-depth case study and key informant interviews. Relevant secondary data was also collected. Both quantitative (descriptive statistics and econometric estimation) and qualitative data analysis methods were employed. A contingent valuation method was employed to elicit farmers’ willingness to pay for improved irrigation water. The open and closed ended elicitation techniques were used to estimate farmers’ willingness to pay. In determining the factors that affect the maximum price farmers are willing to pay, the OLS method was used. Nine variables out of fifteen were significant. Size of cultivable land, access to cash credit, experience with irrigation, land fertility, perception about water scarcity and dissatisfaction with the existing project have a positive effect while age, household size and cultivating water demanding crops have a negative effect. In addition, to determine the factors that affect the willingness to pay (accept) the bid price, the Logit model was employed. Seven variables were significant. Frequency of DA visit, experience with irrigation, income and perception about water scarcity were found to have a positive effect, while the size of cultivable land, amount of fertilizer used and dissatisfaction with the existing project have a negative effect. The fact that the variables: the size of cultivable land and dissatisfaction with the existing project are significant in both models but have a different sign necessitate further study on the effect of these variables on the decision of the farmers’. Among the surveyed households, 98% have shown their willingness to pay if the current water supply situation is improved. And hence this gives good reason for investment to expand the irrigation project and introducing water fee by taking into account the effect of the significant variables in both models.

Item Type:	Thesis (Masters)
Subjects:	G Geography. Anthropology. Recreation > G Geography (General) H Social Sciences > HC Economic History and Conditions H Social Sciences > HM Sociology
Divisions:	Africana
Depositing User:	Tim Khabala
Date Deposited:	12 Sep 2018 07:32
Last Modified:	12 Sep 2018 07:32
URI:	http://thesisbank.jhia.ac.ke/id/eprint/5211

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