Fitsum Hagos

Importance of irrigated agriculture to the Ethiopian economy: capturing the direct net benefits of irrigation

Irrigation development is seen as one of the means to reduce poverty and promote economic growth. While a lot of effort is exerted towards irrigation development, little attempt is done to quantify the contribution of irrigation to national income in Ethiopia. This study is an attempt to quantify the actual and expected contribution of irrigation to the Ethiopian national economy for 2005/06 cropping season and 2009/10 using adjusted net gross margin analysis. Our results show that irrigation in the study sites generates an average income of about USD 323/ ha. This compares to the calculated gross margin for rainfed which is USD 147/ha. This indicates that after accounting for annual investment replacement cost net gross margin from irrigation is more than twice higher than gross margin from rainfed agriculture. On the contribution of irrigation to national economy, in 2005/06 smallholder irrigated agriculture contributed about 262.3 million USD. This accounts for about 4.46 percent of the agricultural GDP in 2005/2006 and 1.97 percent of the total overall GDP. The total income earned from large scale schemes is estimated to be about 74.0 million USD. This accounts for about 1.26 percent of the agricultural and 0.5 percent of the total GDP respectively. Overall, the contribution of irrigation to agricultural and total national GDP was about 5.7 and 2.5 percent during the 2005/06 cropping season. As a result of expansion, by the year 2009/2010 the expected contribution of smallholder managed irrigation to national economy, assuming that exiting cropping pattern, and the average gross margin values for different crop categories are still valid, is expected to increase from USD 262.3 million in 2005/2006 to about USD 414.2 million in 2009/2010, which accounts to about 5.5 percent of the agricultural GDP and 2.3 of the overall GDP for the same year. On the other hand, the contribution coming from the large scale sugar growing estates in 2009/2010 is estimated to be USD 217.5 million which amounts to 2.9 and 1.2 percent of the agricultural and overall GDP respectively. Similarly the contribution coming from large scale commercial farms growing crops other than sugar cane is expected to increase to USD 35.8 million in 2009/2010 which accounts to 0.4 and 0.2 percent of the agricultural and overall GDP respectively. This implies that large scale commercial farms will contribute about 3.3 and 1.4 of the agricultural and overall GDP respectively. In summary, our results indicate that under conservative estimates the future contribution of irrigation to agricultural and overall GDP will be about 9 and 3.7 percent respectively. When some of the assumptions related to cropping pattern, input and output prices, 128 and efficiency levels are relaxed, the contribution of smallholder managed irrigation to agricultural and overall GDP will vary between 4 to 6 and 1.8 to 1.9 percent respectively. Similarly, the contribution from large scale irrigation to agricultural and overall GDP will be in the range of 3 to 6 and 1.2 to 2.5 percent respectively. Overall, the future contribution of irrigation to agricultural GDP will be in the range of 7 to 12 percent while the contribution to overall GDP will be in the range of about 4 percent. To enhance the contribution of irrigation to national economy, besides increasing the presence of physical water infrastructure, however, there is a need to: i) improve provision of agricultural inputs, ii) promote high value crops through the extension system, iii) create good market conditions, and iv) increase the efficiency of small and large schemes.

Options for water storage and rainwater harvesting to improve health and resilience against climate change in Africa

West and East Africa experience high variability of rainfall that is expected to increase with climate change. This results in fluctuations in water availability for food production and other socioeconomic activities. Water harvesting and storage can mitigate the adverse effects of rainfall variability. But past studies have shown that when investments in water storage are not guided by environmental health considerations, the increased availability of open water surface may increase the transmission of water-related diseases. This is demonstrated for schistosomiasis associated with small reservoirs in Burkina Faso, and for malaria in Ethiopia around large dams, small dams, and water harvesting ponds. The concern is that the rush to develop water harvesting and storage for climate change adaptation may increase the risk for already vulnerable people, in some cases more than canceling out the benefits of greater water availability. Taking health issues into account in a participatory approach to planning, design, and management of rainwater harvesting and water storage, as well as considering the full range of water storage options would enable better opportunities for enhancing resilience against climate change in vulnerable populations in sub-Saharan Africa.

Micro Water Harvesting for Climate Change Mitigation: Trade-Offs between Health and Poverty Reduction in Northern Ethiopia

Water harvesting is an important tool for mitigating the adverse effects of climate change. This report investigates the trade-offs between health and poverty reduction by considering the impacts of water harvesting on health in Tigray region, northern Ethiopia. In particular, we assess the prevalence of malaria in association with ponds and wells. The determinants of malaria incidence are explored with multivariate analysis. We investigate people’s willingness to pay (WTP) for improved malaria control using a contingent valuation method (CVM). We applied a double-bounded dichotomous choice CV surveys to elicit households’ WTP for improved health services to control malaria. With interval regression, the WTP was explained as a function of household characteristics, health and health service conditions, and village level factors. The malaria prevalence rate is very high, more than 30 percent in low land communities, although rates are higher after the rainy season. This suggests that ponds and wells are important factors in determining the prevalence of malaria. Better housing conditions, toilet type, and availability of bed nets are all factors which reduce the incidenceof malaria. Pond and well ownership affects the WTP for improved malaria control in a negative and positive way respectively, indicating differences in their economic attractiveness. WTP decreases with altitude and thus malaria incidence. Education and household asset holding generally increases WTP for improved health services. The results suggest that valuation results on household’s WTP in poor economies may be underestimated because of cash constraint. Consequently, alternative payment vehicles in eliciting households’ WTP have to be considered. Similarly, the estimated mean WTP for the external health cost of wells and ponds may be underestimated. In our case, ponds and wells are not fully exploited, as our results suggest that they do not contribute to household income or welfare. Thus the presence of ponds and wells pose high external costs to the economy.

On the profitability of irrigated fodder production: comparative evidence from smallholders in Koga irrigation scheme, Ethiopia

Irrigated fodder production can be vitalised as a useful strategy to sustainably intensify subsistence livestock production owned and managed by smallholders and to diversify farm income through linkages to commercial livestock systems. However, uncertainty about the production and market environment of such a non-traditional commodity can be a major hindrance against commercialisation and scaling out of irrigated fodder production. This makes ex-ante analysis of profit portfolio and its determinants necessary in order to improve farmers’ investment and risk management decisions. Using a stochastic approach to farm profit analysis to account for business uncertainty, this paper simulated and compared the level and distribution of profit that smallholders in Koga irrigation scheme (Ethiopia) can generate from irrigated Rhodes grass seed and from traditional irrigated crops. The finding shows the absolute and comparative profitability of irrigated Rhodes grass seed. Though 0.19 times less profitable than irrigated onion, irrigated Rhodes grass seed is 4 times, 1.27 times, and 1.25 times more profitable than irrigated barley, irrigated wheat, and irrigated tomato, respectively. Profit from the commodity is robust to adverse business conditions such as yield reduction, cost increase, and price reduction, assuring optimism about positive financial returns from investments to expand production. Long-term business viability can be improved and farm income further stabilised through interventions targeted at fodder agronomy to enhance crop yield and at value chain development to improve market linkages and output price.