Appraising Alternatives for Allocating and Cost Recovery for Irrigation Water in Egypt
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Alternative approaches to allocating and recovering costs for water on Egyptian
farms are proposed and evaluated in accordance with the societal objectives
of allocative efficiency, equity of income distribution and cost recovery. A linear
programming model of a study area in Egypt's northern Delta predicts farmers'
response to the proposed cost-sharing instruments over a range of water supply
conditions. Transactions costs for each charging instrument are estimated and
incorporated into the allocative efficiency analysis. Flat land charges, supplemented
by water quotas in the event of increasing water scarcity, best .achieve
. societal objectives in the current and prospective Egyptian situation. Volumetric
charging instruments were judged to be somewhat less desirable, due to higher
tangible and intangible costs of implementation. The results highlight the importance
of transactions costs, the degree of water scarcity and other governmental
revenue raising policies in determining an appropriate charging mechanism.