Economic and financial aspects of multiple uses system

Mary Renwick

Multiple Uses Discussion Forum

Economic values and decision making

Drinking

Home Gardens

Enterprises Fisheries

Livestock

Irrigation

Domestic

Water

$

Valuing Multiple Uses of Irrigation Water: Sri Lanka

Uda Walawe

• Background

• Poor Performance

• Valuation work

Univ. of Minnesota & IWMI

ResultsIrrigated Crops $25m/yr

• Paddy $8.1 m• OFCs $3.5 m• Bananas $13.5 m

Home Gardens $8m

• Home $2.03m• Marketed $5.97m [insert pic]

Results

Domestic Use $140,000/yr

Fisheries$743,000/yr

• Home $64,000• Marketed $679,000

– Fishers $390,000– Sellers $289,000

Rice

OFCs

banana

Home gardens

Drinking

Fisheries

`

Value in Alternative Uses

Type of Use Value

US$ m

health nutrition gender

Irrigated crops

24.9 ?

Home gardens

8.0

Drinking 0.1

Fisheries 0.7 ?

Total 33.8

Banana

OFCs

Rice

Market-led Approach to MUS: SIMI*

• Background

• Micro-scale MUS

• Market-led approach

MUS Development• Domestic & Irrigation

– Surplus water for irrigation• 28 community systems• 1,000 households

• Cost – $100 (tap)– $10-$35 (irrigation equip)

• Benefit– Income >$200/yr – Health & nutrition

MUS with dual tap for drip irrigation and domestic use.

Low cost water storage tank for an MUS scheme.

How it Works … The Value Chain

• Input Supplier

• Producer

• Output Markets

Supply-chain development: A key supporting investment for MUS

Appropriate inputs for agriculture, drinking water

(and sanitation)

Embedded services

Results:

• 240 agrovets

• 5 tap/micro irrigation manufactures

• 2 drip assemblers

• 133 micro-irrigation dealers

• 7 extension services (7 districts)

• Sales of 26,230 micro-irrigation systems

Note: Only 1,280 purchased via micro-credit

Producer

• Build capacity of early adopters

• Facilitating access to inputs and credit

• Education

Results:

• 31,000 households (200,000 people) in 1500 farmer groups

• $7.3 million in increased incomes (BCA 3:1)

• Year 1: $100/hh for 16,000 households

• Year 2: $195/hh for 26,000 households

Market development: Critical for economic opportunities linked to MUS

Results:

• 43 market collection centers

• Established value chains across 9 districts serving 3 million

Government: key role• Strategic investments

• Focus on market failures

Conclusions • Economic valuation of alternative uses can

serve as a decision making tool

• Opportunity cost of non-integrated management can be high

• Linking value chain approach to MUS can increase economic returns and reduce subsidies

Questions?