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An Economic Analysis of Tube Well Irrigation in an Area of Bangladesh

F I M Golam Wahed Sarker
Scientific Officer
Farm Management Division, BRRI, Gazipur

S M Munzur Murshed
Professor
Department of Agricultural Economics, BAU, Mymensingh

Abstract/ Executive Summary:

Realizing the importance of irrigation, the government of Bangladesh has given high priority to irrigation programme. The Bangladesh Agricultural Development Corporation (BADC) is responsible for the implementation of various irrigation programmes. The supply of irrigation water through low lift pump (LLP), deep tube well (DTW) and shallow tube well (STW) is the major function of BADC. In view of the tremendous emphasis placed on different irrigation programmes and the commitment of large amount of investment by the government, it is worth while to make an economic evaluation of different irrigation systems in Bangladesh. The present study is, therefore, designed to make such an economic evaluation. The cropping intensity was higher in irrigated plots than non-irrigated plots. In all types of irrigated plots more than 72% of the annual income above gross expenses were obtained during Boro season compared to 40% in non-irrigated plots.The NPW and BCR of DTW projects were more sensitive to the changes in the discount rates than those of HTW projects, while NPW and BCR of HTW projects were more sensitive to the changes in the discount rates of than those of STW projects. The IRR from investments on DTW, STW and HTW projects were 14%, 36% and 17%, respectively. It could be safely concluded that STW project is more profitable compared to HTW and DTW projects.

Keywords: Economic Analysis, DTW, STW and HTW Irrigation

Location: Sariakandi, Bogra, Bangladesh

Start Date:

End Date:

Program Area: Crop-Soil-Water Management

Commodity: Tubewell

Objectives:

To analyze the effects of tube well irrigation on cropping intensity, farm income and labour employment; and
To make an economic appraisal of alternative investment on deep tube well (DTW), shallow tube well (STW) and hand tube well (HTW) irrigation system.

Methodology:

The study was based on field level primary data. The selected areas were three villages near Sariakandi Thana of Bogra district. The selected areas were three villages near Sariakandi Thana of Bogra district. There were two DTW, seven STW and twenty HTW projects. One DTW project from Ulladanga village, and two STW projects from Kumarpara village were selected purposively and ten HTW projects from Mathurapara village were selected at random. In all, forty farmers were selected. The non-irrigated plots of the selected farmers were used to represent the non-irrigated situation. Collected data were edited, summarized, tabulated and analyzed to full fill the objectives of the study. Descriptive statistics using different statistical tools like averages, percentages and ratios were used in presenting the results. In addition, project appraisal techniques (e. g. net present worth (NPW); benefit cost ratio (BCR); and internal rate of returns (IRR)) was used to measure the returns to investment on irrigation systems. NPW is obtained by deducting the discounted cost from the discounted benefits.The BCR is estimated by dividing the sum of present worth of benefits by the sum of present worth of costs. Finally, IRR is estimated as follows: Lower discount rate + difference between two discount rates x (present worth of cash flow at the lower discount rate/absolute difference between the present worth of the cash flow at two discount rates).

Source of Information: Bangladesh Rice J. 4(1&2):28-33, 1993

Article Link (Online Journal):

Funding Source:

1.

Budget:

Total Budget (Tk.) :

Achievement/Findings:

The cropping intensity, farm income and labour employment were higher (21%, 61% and 27%, respectively) in irrigated plots than irrigated plots. The investments on DTW and HTW project were not profitable at 15% and 20% discount rates, respectively. Thus, the results of the analysis suggest that the NPW and BCR of DTW projects were more sensitive to the changes in the discount rates than those of HTW projects. The IRR from investment on DTW, STW, and HTW were 14%, #6% and 17%, respectively. Thus, investment on STw project received an IRR higher by 22% and 19% than that of DTW and HTW projects. The results of the analysis also confirms that the rankings obtained by the IRR were identical to those obtained by the NPW and BCR criteria. On the basis of the above findings the following conclusions could be drawn: (i) due to irrigation facilities, land use pattern is higher in Boro season compared to the other season; (ii) the cropping intensities were higher in irrigated plots than non-irrigated plots; (iii) the introduction of irrigation increased farm income and labour employment in the area; and (iv) STW project is more profitable compared to HTW and DTW projects.

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