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Agro-hydrologic and Economic Analysis of On-farm Reservoirs for Drought Alleviation in Rainfed Rice Lands of North-west Bangladesh: Economic Analysis-1995

Dr. M Towfiqul Islam
SSO
Irrigation and water Management Division, BRRI, Gazipur-1701, Bangladesh.

Dr. Md. Nazmul Hassan
SSO
Irrigation and water Management Division, BRRI, Gazipur-1701, Bangladesh.

Abstract/ Executive Summary:

The study was conducted to evaluate the economic feasibility of OFRs for drought alleviation in rainfed lowland rice systems during the two wet seasons of 1994-95. Crop production practices of 20 randomly selected farmers; 10 with access to the selected 10 OFRs and the rest without access to any irrigation but within the vicinity of the selected OFRs, were monitored and surveyed during each of the two years in order to characterize their land use and productivity. For the survey, pre-designed questionnaire was used and apart from crop production practices information on OFR water use, construction, operation and maintenance costs, irrigation cost and crop yield were collected. Based on the data on costs and returns from OFRs collected during farmers’ survey an economic analysis was carried out for an OFR with 1 ha service area in order to ascertain the profitability of OFRs. It was assumed that the area forgone for OFR construction is 7% of the farm area (1 ha) and the yield without supplemental irrigation is 3.7 t/ha. During the study period the average incremental yield was 0.7 t/ha (20% increase); 3.5 t/ha for non-irrigated and 4.2 t/ha for irrigated farms. The variations in incremental yields because of supplemental irrigation as presented above are expected because of erratic distribution of inter-year and intra-year rainfall. Hence, as a conservative estimate, an average incremental increase in yield of 20% because of supplemental irrigation was considered in the analysis. With an interest rate of 12% and an economic life of 20 years for the OFRs, the BCR has been calculated as about 1.5. A sensitivity analysis was performed with incremental yield (10% and 30%), economic life (30 years) and interest rate (12% and 15%) as variables and the results showed that higher interest rates decrease the BCR. Increasing the economic life of OFRs from 20 to 30 years does not significantly increase the BCR. As expected , the BCR was very sensitive to incremental yield and reducing or increasing the incremental yield by 50% similarly reduces or increases the BCR by 50%. With an incremental yield of 10% the BCR is less than one which means that OFRs are not economically feasible. The break-even incremental yield that makes OFRs economically feasible in the study area is 13.4%.

Keywords: Sensitivity analysis, BCR, On-farm reservoir

Location: Godagary, Rajshahi

Start Date: 00-00-1994

End Date: 00-00-1995

Program Area: Crop-Soil-Water Management

Commodity: Rice, Water management

Objectives:

To evaluate the economic feasibility of OFRs for drought alleviation in rainfed lowland rice systems

Methodology:

The study was conducted during the two wet seasons of 1994-95. The physical parameters (area, volume, depth and side slope) of 10 randomly selected OFRs, owned and operated by the farmers in the study area were measured. The catchment area and the service area (irrigated area) of each of the OFRs were delineated through field inspection. A stuff gage was installed in each of the selected OFRs in order to measure the change in water level. Crop production practices of 20 randomly selected farmers; 10 with access to the selected 10 OFRs and the rest without access to any irrigation but within the vicinity of the selected OFRs, were monitored and surveyed during each of the two years in order to characterize their land use and productivity. For the survey, pre-designed questionnaire was used and apart from crop production practices information on OFR water use, construction, operation and maintenance costs, irrigation cost and crop yield were collected.

Source of Information: Proceedings of the BRRI Annual Internal Review for 1995, BRRI, Gazipur-1701, Bangladesh

Article Link (Online Journal):

Funding Source:

Budget:

Total Budget (Tk.) :

Achievement/Findings:

The results showed that higher interest rates decrease the BCR. Increasing the economic life of OFRs from 20 to 30 years does not significantly increase the BCR. As expected , the BCR was very sensitive to incremental yield and reducing or increasing the incremental yield by 50% similarly reduces or increases the BCR by 50%. With an incremental yield of 10% the BCR is less than one which means that OFRs are not economically feasible. The break-even incremental yield that makes OFRs economically feasible in the study area is 13.4%.

Knowledge Management: Report/Proceedings