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