Water access,farm productivity,and farm household income: Sri Lanka's Kirindi Oya irrigation system

Income differences attributed to differential access to water in irrigation systems are common. Prior studies of farm‐level water use in developing areas have typically been limited to using number of irrigations as a proxy for water use. We develop a volumetric measure in Sri Lanka's Kirindi Oya Irrigation System through recent farmer recall and use it in production function estimation and welfare analysis. Findings indicate substantial differences in water use by farms across seasons and across subareas of the irrigation district. Alternative plans for allocating additional water among seasons and subareas to elevate net rice revenues are examined. The recommended plan predicts higher net returns from rice and greater equality in the distribution of household income than would be generated if the additional water were allocated based on the current allocation criteria. Concurrent application of fertilizer at recommended levels would further increase net revenues and reduce income inequality.     

Economic cost of environmental flows in an unregulated river system*

This paper applies a stochastic dynamic programming framework, incorporating links to hydrological and biophysical models, to assess the economic costs of environmental flows in an unregulated river system in the Namoi Valley of northern New South Wales, Australia. Structural adjustment decisions are included in the model to account for farmer responses to changes in environmental flows through the introduction of a water sharing plan. The results of the analysis indicate that the proposed level of environmental flows reduces water extractions by around 6 per cent, and imposes an opportunity cost of less than 1 per cent in terms of reduced net income over a 20-year period.