A NET BACK VALUATION OF IRRIGATION WATER IN THE HARDAP REGION IN NAMIBIA

A Nilsson, L Sahlen and Jesper Stage

Agrekon, 2003, vol. 42, issue 3

Abstract: Namibia is currently in the process of phasing out water subsidies in its government-sponsored irrigation schemes. However, the financial effects on the affected farmers are frequently unclear, and so are the economic effects on society as a whole. The net back method provides a framework for estimating rough values of irrigation water in situations such as those in Namibian agriculture, where farmers face a number of constraints which are difficult to model explicitly due to the dearth of reliable data. We apply the net back method to estimate the value of irrigation water used for different crop alternatives in the Hardap region in southern Namibia. We find that all the crop alternatives, which farmers in the region currently choose between, will remain financially viable after the increases in user charges which are envisaged in the near future. However, substantial shifts in agricultural production will become necessary once the long term cost recovery policies are in place in the water sector. We also extend the net back framework in order to study potential effects of further increases in water user charges, which may become necessary in future as the water demand from other water users increases.

Keywords: Environmental Economics and Policy; Land Economics/Use; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Date: 2003
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Persistent link: https://EconPapers.repec.org/RePEc:ags:agreko:246025

DOI: 10.22004/ag.econ.246025

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