TRIPLE DIVIDENDS OF WATER CONSUMPTION CHARGES IN SOUTH AFRICA

The South African government is exploring ways to address water scarcity problems by introducing a water resource management charge on the quantity of water used in sectors such as irrigated agriculture, mining and forestry. It is expected that a more efficient water allocation, lower use and a positive impact on poverty can be achieved. This paper reports on the validity of these claims by applying a computable general equilibrium model to analyse the triple dividend of water consumption charges in South Africa: reduced water use, more rapid economic growth, and a more equal income distribution. It is shown that the appropriate, budget-neutral combination of water charges, particularly on irrigated agriculture and coal mining, and reduced indirect taxes, particularly on food, would yield triple dividends.water scarcity, water charges, triple dividend, poverty alleviation, computable general equilibrium model

Integrated participatory modelling of irrigated agriculture: the case study of the reorganisation of a water management system in Italy

The paper presents an application of the new version of the 'Decision Support for Irrigated agriculture' DSIrr designed to integrate water and agricultural policy analysis and to support participatory decision process. The tool is a scenario manager for bio-economic farm models considering climatic, agronomic, hydraulic, socio-economic and environmental aspects. The paper offers some insight on the decomposition approach adopted to integrate economic analysis at different scales by illustrating a case study conducted in Italy to support an ex ante evaluation of a water management system reorganisation. Reduce water consumption is a strategic objective which pricing policy cannot address given technical constraints. The replacement of the existing low-efficiency irrigation system could be the solution, but the recover of cost creates an affordability problem. Results suggest that a dual network, integrating agricultural and rural urban sectors, represents a real challenge for the Irrigation Board since this option meets the environmental goal and pass the economic sustainability test.Water, Agriculture, Economic analysis, Modelling and tools, Participatory process, Agricultural and Food Policy, Land Economics/Use, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy,

A Multi-Criteria Approach for Irrigation Water Management

The major implications that the European Union (EU) Water Framework Directive (WFD) may have in irrigated agriculture were analysed using alternative water policy measures. The consequences of policy change were evaluated in a case study (Baixo Alentejo, Portugal), using a Multi-Criteria Decision Making (MCDM) model that simulates farmers’ preferred behaviour. The study compares the effects of water pricing (volumetric and flat tariffs) and consumption quotas, in farmer’s income, water agency revenues, agricultural employment and water demand for irrigation. Model results indicate that the adjustments in farmer’s responses are dependent on the policy strategy enforced and on the policy level.Water Framework Directive, Flat Pricing, Volumetric Pricing, Multi- Objective Programming, Water Management, Portugal,

MCDM Farm System Analysis for Public Management of Irrigated Agriculture

In this paper we present a methodology within the multi-criteria paradigm to assist policy decision-making on water management for irrigation. In order to predict farmers' response to policy changes a separate multi-attribute utility function for each homogeneous group, attained applying cluster analysis, is elicited. The results of several empirical applications of this methodology suggest an improvement of the ability to simulate farmers' decision-making process compared to other approaches. Once the utility functions are obtained the policy maker can evaluate the differential impacts on each cluster and the overall impacts in the area of study (i.e. a river basin) by aggregation. On the empirical side, the authors present some studies for different policy instruments including water pricing, water markets, modernization of irrigation systems and a combination of them.multi-attribute utility theory, water management, irrigation, policy analysis, Agricultural and Food Policy, Q25, Q15, C61,

The economic and environmental factors of water in arid regions: Study of the rural water use in Northern Darfur Region, Sudan

We develop hypothetical policy scenarios in this part of the paper which are simulated using a product-by-industry economic-ecological model to investigate their impacts on water and other ecological commodities. Results are expected to contribute to the establishment of alternative policy options for water resources management and sustainable economic development in the area. The impact of economic development on the environment is now a global issue and cannot be ignored. However, the extent of these impacts at local and regional levels in less developed countries (LDCs) is not fully understood. Unlike the rich industrialized countries where development is large-scale and the impacts associated with immense consumption of fossil fuels are basically in the form of environmental pollution, development in the LDCs is rather at a small-scale and the nature of impacts is often in the form of severe resource depletion (World Bank, 1992; Lesser, et al., 1997). Therefore, the challenge of sustainable development in these poor countries is an urgent matter of concern (WRI, 1992). This concern can be investigated from two perspectives, economic development and environmental degradation.Arid, Regions, Water Scarcity, Sudan, Darfur, Input Output, Economics, Environmental Factors

Development Strategy, Poverty and Deforestation in the Philippines

Most thinking on poverty and deforestation in developing countries does so in terms of the influence of one on the other, in either direction. However, the two have common determinants in the underlying economic and institutional conditions that set factor and product prices and the incentives for migration and natural resource-depleting activities. These determinants include property rights failures (open access to forest lands) but also 'government failures' in the form of economic policies that indirectly promote deforestation and retard poverty alleviation. A general equilibrium approach permits the analytical identification of the influences that such distortions exert on poverty and deforestation pressures. Using a numerical general equilibrium model, we consider the likely effects of the reform of industrial and agricultural protection policy, a key component of modern Philippine economic development strategy, on the determinants of poverty and deforestation.

Water Policy and Sustainability of Irrigated Farming Systems in Italy

The objective of this paper is to provide an analysis of the sustainability of irrigated agriculture in Italy in the context of CAP reform and Water Framework Directive. The work combines scenario analysis, multicriteria mathematical programming simulation models and economic, social and environmental indicators. Five irrigated farming systems were considered: cereals, rice, fruit, vegetables and citrus. The results show the diversity of Italian irrigated farming systems and the trade-off between socio-economic and environmental performance. This highlights the need for a differentiated application of the Water Framework Directive, balancing water conservation and rural development objectives.water framework directive, irrigation, economic models, sustainability indicators, scenarios, Land Economics/Use, Resource /Energy Economics and Policy, Q1, Q2, Q25,

Economic regional impacts of water transfers: the role of factor mobility in a case study of the agricultural sector in the Balearic Islands

Using a CGE model for the Balearic Islands, we simulate the effects of an agricultural water market in the farming sector facing reductions in the water endowment. The market lessens the negative effects on farming communities of short-term water restrictions associated with cyclical droughts. However, in scenarios of permanent reductions, such as those envisaged by global warming predictions or those that result from the implementation of the European Water Framework Directive, a water market may aggravate the negative effects of water shortage. Therefore, the paper shows that generalizations cannot be made about the effects of water markets on farming communities.Agricultural and Food Policy, Environmental Economics and Policy, D58, Q1, Q25, R13,

China’s agricultural prospects and challenges: Report on scenario simulations until 2030 with the Chinagro welfare model covering national, regional and county level

The report describes prospects and challenges for Chinese agriculture until 2030 under different scenarios, using the Chinagro welfare model. A scenario is defined as a coherent set of assumptions about exogenous driving forces (farm land, population, non-agricultural growth, world prices etc.), derived from the literature and own assessments. Under these assumptions, simulations with the Chinagro model analyze the price-based interaction between the supply behavior of farmers, the demand behavior of consumers and the determination of trade flows by merchants. The outcomes from the Baseline scenario seem reassuring in that foreign imports remain moderate relative to China’s size, though quite large as fraction of world trade. It would be possible to feed people as well as animals without excessive imports. There is even a potential for significant export flows of vegetables and fruits. Regarding concerns, the trends in per capita agricultural value added are problematic, because they stay in all regions behind per capita value added outside agriculture, albeit that they are rising steadily. This leads to growing disparity in per capita incomes within and across regions. The mounting environmental pressure from fertilizer losses and unused manure surpluses is another cause of concern. The second scenario, the Trade liberalization scenario, appears to hurt farm incomes more than it benefits them and to raise the gap with non-agriculture, also because food becomes cheaper in urban areas. Hence, it highlights the difficult choice between economic efficiency and poverty alleviation that agricultural policy makers often face. The High income growth scenario reinforces the national food self-sufficiency result of the baseline simulation. Even with meat demand higher than under the baseline, levels of imports remain manageable. The High R&D scenario shows that a considerable reduction in dependence on agricultural imports is possible. However, a substantial part of the gains will accrue to consumers rather than to farmers, due to price reductions. Finally, the Enhanced irrigation scenario shows outcomes similar to those of the high R&D scenario. Here also the agricultural trade balance improves and consumer welfare improves, but farmers have to cope with drops in prices, and those who do not benefit from land improvement, only experience losses through falling prices. The present report is written at the onset of the CATSEI-project that will analyze policy packages with more specificity and detail after implementing the following model improvements. First, the impact of China’s imports and exports on world markets will be represented explicitly. Second, the developments outside agriculture in rural areas will be accounted for endogenously, particularly to represent farm revenue from off-farm employment. Third, the trade and transportation margins between farm-gates and markets will be made dependent on the relative flexibility of the actors (farmers, processors, traders) along the chain. Finally, the various techniques to identify more efficient and more sustainable use of scarce water and nutrients and to address health risks will appear more explicitly