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MODELLING THE IMPLEMENTATION OF THE FULL COST RECOVERY APPROACH IN SPANISH IRRIGATED LANDS

IWRA World Water Congress 2003 Madrid Spain
IWRA WWC2003 - default topic
Author(s):

Maria BLANCO 2, Eva IGLESIAS 1 y José M. SUMPSI 1

1 Departamento de Economía y Ciencias Sociales Agrarias

2 Corresponding author: Departamento de Economía E.T.S.I. Agrónomos. Ciudad Universitaria, s/n. 28040 Madrid. SPAIN Phone: 34-91-3365794/96; Fax: 34-91-3365797 E-mail: mblanco@eco.etsia.upm.es

This research has been funded by the Spanish Ministry of Agriculture.



Keyword(s): Full-cost recovery, positive mathematical programming, water management
Article:

Abstract

The recent Water Framework Directive requires that Member States take account of the principle of recovery of the cost of water services, including environmental and resource cost. In doing so, Member States may have regard to the social, environmental and economic effects of the recovery as well as the geographic and climatic conditions of the regions. This rises the interest to develop economic management tools to assess water managers in implementing the full cost recovery approach. This motivates the aim of this paper to develop a methodology to assess the impact of cost recovery in Spanish irrigated lands.

The need to collect comprehensive field data is a serious limitation of traditional farm modelling methodologies to perform evaluation on a global scale. Most of existing analyses are restricted to the evaluation of impacts in limited areas making it difficult to establish general conclusions. This fact is particularly relevant when considering the high heterogeneity of irrigation areas in Spain. In this context, the development of methodologies adapted to work with the limited databases available and that can be applied to diverse situations are highly valuable.

In this paper, we develop a positive mathematical programming model to evaluate the impact of full cost recovery in a large number of irrigation districts representing the heterogeneous characteristics that can be found throughout the Spanish territory. The proposed model allow to simulate farmersí behaviour under full cost recovery scenarios. One of the main limitations of positive mathematical programming is that available options to the farmers are limited to the observed activities in the actual situation. We propose a cost transfer approach which allow us to simulate the adoption of new technologies and conversion to dryland crops.

The model interface allowed friendly use and easy replication to more than two hundred irrigation districts which were selected throughout the Spanish territory. Selection criteria have included community size, crop rotation, agronomic and climatic characteristics, water supply system, irrigation systems, etc. The model results shows the impact on water consumption, crop substitution, technology adoption, labour, farmers income, and the water agency revenues when different scenarios of cost recovery are considered. This allow us to suggest that this modelling approach may be used as a management tool to assist the implementation of the cost recovery approach of the new Water Framework Directive.

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