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Who Benefits from Irrigation Development in India? Implications of Irrigation Multipliers for Cost Recovery and Irrigation Financing

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Type: Conference Paper
Author: Bhattarai, Madhusudan; Barker, Randolph; Narayanamoorthy, A.
Conference: ICID Asian Regional Workshop
Location: Taipei, Taiwan
Conf. Date: November 10-12
Date: 2003
URI: https://hdl.handle.net/10535/5104
Sector: Water Resource & Irrigation
Region: Middle East & South Asia
Subject(s): irrigation
cost benefit analysis
economic behavior
Abstract: "Who benefits from irrigation development in India and who should pay the cost? We have analyzed this by estimating magnitude of the total benefits derived by the farm and non-farm sector in the economy from irrigation development. Using panel data from 14 states over the period 1970 to1994, we have estimated the marginal benefits, both direct (farm level benefits) and total (rural economy wide) benefits derived from irrigation development. Dividing total by direct benefits of irrigation we compute irrigation multipliers in India, which ranges from 3 to 4.5. That means two thirds or more of the benefits from irrigation development have been captured by the non-farm sector in the economy outside of farming, a factor which should considered in developing a rational cost recovery and irrigation financing policy. Hence, the financing and cost recovery policies in irrigation should be assessed not only based on farmers' ability to pay but also based on the economy-wide impact, which is not much discussed in the past studies."

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