Economics in Irrigation Management and Project Evaluation

Abstarct

In irrigation management, and broadly applicable to any field, a “technology” must offer a high financial rate of return. An investment or intervention is said to be economically efficient when it maximizes the value of output from the resources available. Economic analysis of water use includes the values generated by production activities, the opportunity costs of inputs, and any pertinent costs or benefits that are external to producers and consumers. Economic analysis is helpful in identifying opportunities to increase the net values generated with limited water resources by various techniques/alternatives, and in designing policies that encourage farmers and water agency personnel to improve water management practices in ways that enhance social net benefits. In selecting the best irrigation or drainage project among alternatives, or to judge a single project for its economic viability, several criteria of economic indices are used, which have been described in this chapter with a detail analytical procedure and sample examples.