Evaluation of Farmers' Willingness to Pay for Improved Access to Irrigation Water Supply

Summary

In Egypt, the agriculture sector consumes around 81.6% of water resources and heavily relies on the waters of the River Nile. However, the country faces severe water scarcity due to climate change, population growth, agricultural development, and economic growth. This water scarcity affects farmers’ productivity, income, and overall livelihoods. To address this issue, water efficiency in irrigation heavily depends on the active participation of farmers facilitated by effective water pricing. In this way, farmers’ willingness to pay (WTP) for water is crucial in determining the sustainability of irrigation projects for improved access to irrigation water supply. Water pricing has been given less importance due to many social and economic reasons. However, it holds significant potential in achieving water use efficiency, ensuring the financial sustainability of the projects, and promoting equity. This study examined the WTP of smallholder farmers for improved irrigation water supply. A 313 Egyptian smallholder farmers survey was conducted using a double-bounded dichotomous choice contingent valuation experiment in the Nile Delta region, Fayoum province. The interval regression model was used to access the determinants of farmers’ WTP and their mean WTP. The results indicated that farmers are willing to pay a significant amount of around 1250 Egyptian pounds (409 SEK) per feddan (roughly 0.42 hectares) per year for improved irrigation water supply. Factors such as attitudes towards efficient irrigation practices and adoption of new technologies, perceptions about irrigation water shortage, and income from agriculture positively influence WTP. On the contrary, experience and access to credit negatively affect WTP.