2. Background
2.1 Purpose and Objective
The overall objective of this study is to establish the economic returns from a national, regional and individual viewpoint and the social changes that occur with community irrigation development. The specific objective is to determine socio-economic parameter values, established as being important in studies three and four, for previous irrigation schemes, and to establish an assessment framework and tools for determining parameter values in future ex ante studies of proposed irrigation projects.
2.2Inception Report Findings
Government investment in community irrigation schemes through the 1970s and 1980s was determined by a very strict set of policy initiatives. These included a number of intervention strategies, such as subsidy payments for off and on farm capital works, as well as taxation and interest rate support for farmers. Analysis of irrigation schemes treated them as a capital investment by the nation and economic analysis was carried out from a national viewpoint. The framework used was a single objective analysis from the national viewpoint using a prescribed cost benefit analysis assessment.
The cost benefit methodology that was used limited the calculation of benefits to primary benefits, including increases in the numbers and performance of livestock or crop production. Review of this assessment framework in the 1980s highlighted a number of deficiencies and potential errors in the process. At this time the Economics Division of MAF suggested that reviews of irrigation schemes should be done under a framework of regional development objectives as well as within a financial resource allocation framework. Factors identified as being important in the wider framework included:
- community impacts of irrigation development including social and demographic changes;
- direct economic benefits expressed as both output, value added and employment changes;
- wider regional benefits using input output models to calculate secondary level impacts;
- recreational benefits;
- environmental benefits.
It was recognised that assessment parameters include a range of qualitative and quantitative measures. While these cannot be mixed in one overall benefit assessment it is possible to include them in an overall framework which assists decision makers to evaluate the worth of various community irrigation schemes from a much wider viewpoint.
In the present environment there is a need to establish a range of tools to determine parameter values for the assessment of irrigation schemes on a multi-objective basis. There is a need to establish the parameters identified in studies three and four and to determine the methodology to be used in assessing them.
2.3 Study Approach
The task list for this study is as follows:
- Review the studies on the roles of central and local government in community irrigation scheme developments to determine the parameters that need to be assessed from a national and regional viewpoint.
- Establish appropriate parameters from an individual farmer viewpoint.
- Review past and present studies and economic literature to determine methods of establishing the parameter values.
- Create a multi objective analysis framework to incorporate the parameters.
- Establish a standardised and accepted methodology for calculating the quantitative and qualitative values.
- Test the parameters identified against one ex post analysis and one ex ante analysis.
- Report on the assessment framework as a tool that can be used to determine parameter values in future studies.
Contact for Enquiries
MAF Information Services
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Wellington, NEW ZEALAND
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