A Computerized Model to Estimate the Value of Irrigation Water and its Provision Cost in Arid lands

By: Feisal Mohamed Abdalla

Supervisor Prof. Hassan A. Musnad

Abstract

The concept of fresh water as an economic good is discussed through answering two main question.  The first question is why should water be dealt with as an economic good.  The answer to this question is summarized as follow:-

• Supply is limited compared to demands & decisions are required to allocate it between competing uses (to allocate water you need to know the values of water in the various uses)
• Demand are increasing due to expanding population, increasing industrialization and urbanization.
• Also as long as consumers have nearly unlimited access to water, subsidized by governments, there is no reason to conserve it.
• Water is an important production factor.
• Water related environmental qualities are recognized having value to society.

The second question is how can water be dealt with as an economic good.  Two schools are answering this question.  The first school think that water has to be priced at its economic value.  However, some complex social factors make this opinion impractical.  These factors have made the second school thinking that treating water as an economic good just means that the decision on water allocation have to be based on economic analysis, that takes account of the various values of water.

Whatever  water demand management methods is dealt with, the instrument of implementation is to estimate the value of water for the various uses.  Estimating the values and costs of groundwater used in irrigation in arid land is the main objective of this research.  A computer model is designed to be fed with the necessary data and to carry out all necessary calculations in order to give the values of water in the various irrigation uses.  It take into account the social benefits of food security and employment creation.  The model calculates the values of water each separate crop (in the farm level, the well level, the phase level and the overall project level).  The average value of water for all crops is also calculated for all the above – mentioned levels.  The model also compares the value of water to its provision costs which include the capital charge, the operation and maintenance expenditures , the opportunity costs from alternative water uses, the economic externalities arising from changes in economic activities and the cost of environmental externalities associated with public health and ecosystem maintenance.

Abstract in Arabic