Abstract
Micro irrigation has received much attention from the policy makers and others for its perceived ability to improve water productivity. Realising the significance of using micro irrigation system as a demand management strategy, an attempt has been made in this chapter to examine the social benefit-cost analysis of drip irrigation. As found in many earlier studies, the drip irrigation resulted in significant increase in yield over the flood method of irrigation. The analysis of economics of crop cultivation in drip and control villages revealed that the drip method of irrigation has significant impact on resource use, cost of cultivation, yield of crops and farm profitability. The social benefit-cost analysis revealed that the social benefits exceed the social costs in the water and labour scarce regions. Thus, one can conclude that the drip irrigation is a viable and more beneficial in regions where there is more water scarcity. The social benefit-cost ratio (SBCR) in over-exploited regions is 5.19 and 4.97 respectively without and with subsidy at a discount rate of 2 %, while it is 4.56 and 4.33 in the semi-critical regions. This clearly shows that wider adoption of drip irrigation produces sufficient social benefits and continuing support through subsidies will save water and energy and help achieve sustainable management of groundwater resources. Hence, continuing public support for the wider adoption and promotion of drip irrigation technologies appears warranted.
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Notes
- 1.
Gibbons (1987) suggested that the marginal value of water of each M3 is the marginal physical product times the crop price. Regression analysis was performed with yield as dependent variable and water applied as independent variable. From the estimated production function results, the value of water is determined by multiplying the marginal physical product of water (MPP) with the price of output (Py).
- 2.
The crop-wise electricity consumption was computed as under: A one HP pump run for 1 h consumes 0.746 kwh of power. Accordingly, kwh for each crop = [(HP of pump) × (0.746 kwh) × (Number of hours of irrigation) × (No. of irrigation)].
- 3.
The economic value of energy is Rs. 3.5/kwh which is the unit cost of supply of electricity in Rs./kwh. The unit cost of supply of electricity represents the cost incurred by the utility to supply electricity to ultimate consumers. This include the cost of fuel, operation and maintenance expenditure, establishment and administration cost, interest payment liability, depreciation and the cost of power purchase (Government of India 2002).
- 4.
The amortization of irrigation structures as follows:
Amortized cost of well = [(Compounded cost of well) * (1 + i) AL * i] ÷ [(1 + i)AL − 1]
where: AL = Average life of wells; Compounded cost of well = (Initial investment on well) * (1 + i)(2008—year of construction).
The discount rate of 5 % is used in amortization reflecting long term sustainable rate. Similarly investment on conveyance, pumpset, electrical installation, and surface storage tanks and drip irrigation structures were amortized. Where AL is average life of wells and it is assumed to be 30 years based on the average life of well life in the study area. Similarly, the average life of borewells is assumed as 20 years, electrical motors 15 years, surface storage tanks 25 years and drip irrigation equipments 10 years.
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This paper is mainly based on a study conducted with funding support from the International Water Management Institute, Sri Lanka under IWMI-Tata Water Policy Programme. However, the author is solely responsible for the errors (if any) that remain.
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Suresh Kumar, D. (2016). Social Benefit Cost Analysis of Drip Irrigation. In: Viswanathan, P., Kumar, M., Narayanamoorthy, A. (eds) Micro Irrigation Systems in India. India Studies in Business and Economics. Springer, Singapore. https://doi.org/10.1007/978-981-10-0348-6_7
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