Valuation of water in large-scale agricultural land investments in Mali: Efficiency and equity trade-offs

Recent large-scale investments in agricultural land that are coupled with irrigation present opportunities for increased food production in sub-Saharan Africa. However, to achieve this objective two management issues must be addressed: efficient water use in the face of a looming water scarcity and equity in the sharing of the resource between large-scale investors and smallholder farmers. Focusing on the Office du Niger, one of the largest irrigable areas in Africa this paper compares the performance of three alternative water valuation methods: the currently used flat rate area-based pricing, uniform pricing and increasing block tariffs. Results show the limitations of the current pricing system in economic efficiency and equity terms and in terms of generating sufficient revenue to meet water supply costs. The paper shows that volumetric water pricing avoids these shortcomings and allows the water decision maker to weigh the efficiency-equity trade-offs in irrigation water management.

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Conference Paper/ Presentation
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JEL Codes:
Q12; Q18; Q310; Q570; Q250; Q240

 Record created 2017-04-01, last modified 2018-01-23

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