International Commission on Irrigation & Drainage Commission Interationale des Irrigation et du Drainage



Equity in Irrigation

Economic efficiency has to do with how much wealth a given resource can generate. Equity has to do with how that wealth is to be distributed in society.

 

In general, efficiency of water use is attainable whenever the pricing method affects the demand for irrigation water. The volumetric, output, input tiered and two-part tariff schemes all satisfy this condition and can achieve efficiency, though the type of efficiency (short or long run, first or second best) vary from one method to the other. These methods also differ in how they are implemented and the amount and type of information needed in their implementation. Pricing schemes that do not influence water input directly, such as per unit area fee, lead to inefficient allocation. Such methods, however, are in general easier to implement and administer and they require a modest amount of information.

 

The extent to which water pricing methods can affect income redistribution is rather limited. Farm income disparities are due mainly to such factors as farm size and location, and soil quality, but not to water (or other input) prices.

 

When farmers are per-hectare identical in production (i.e., vary only with farm size), face the same prices, and no quantity quotas are applied, the income distribution profile under most water pricing methods is proportional to the initial farm size distribution profile. Since measures of income inequality (with the exception of the variance) are not sensitive to proportional shifts in income. Inequality is due solely to the farm size inequality and is independent of the pricing method or water rates used.

For a water pricing scheme to influence income distribution, it must involve certain quantity quota rules. Income redistribution policies should not be carried out via water prices; not because it involves wrong doing but because water prices serve as a poor means to reduce income inequality. However, pricing schemes that involve water quota rules can reduce income inequality.

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Dictionary - Equity in Irrigation Terms

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