iwmi anik bhaduri, upali amarasinghe, tushaar shah, bk anand benefits and cost of irrigation water...

IWMIAnik Bhaduri, Upali Amarasinghe,

Tushaar Shah, BK Anand

Benefits and Cost of Irrigation Water Transfers:

A case study of Polavaram

Objectives - Irrigation cost/benefit assessment

• Main objective – Assess direct/indirect irrigation benefits and costs of the

Polavaram project

• Specifically, net benefits due to irrigation water transfers on

– Crop production – Livestock – Fisheries – Forward linkages (agro based industries, transporation,

storage etc.)– Backward linkages (Farm equipment s, agriculture inputs

supplies, Equipment maintenance etc. )

Outline - Presentation

• What Polavaram irrigation proposes?• Present status of irrigation in RBC (en-route link) and

LBC• Emerging cropping patterns and irrigation• Net benefits of irrigation – source wise• Cost/benefits of the irrigation water transfers

Does irrigation benefits exceed the cost? It does, but under different circumstances

Scenario I

Scenario II

Scenario III

Scenario IV

B/C ratio 1.04:1 1.36:1 1.47:1 1.24:1

IRR 6.38 7.87 8.45 7.40

What Polavaram proposes?

What Polavaram proposes?

Transfer or use 287 tmc of water

Cost/benefit methodology

• Conceptual and empirical Domain of the analysis

– Assess benefits of irrigation in LBC & RBC

• Valuation of ex-ante benefit analysis -

Reference condition

– Area that could be like Polavaram command after irrigation

water transfers

• Net value added per ha or m3 of after water transfers

– Requires the differences irrigated and rainfed crop yields, input

application, other cost of production, land rent etc.

Cost/benefit methodology

• Sample of 1000 farmers

– 37 mandals, 50 villages

– 521 farmers in the RBC, 479 farmers in the LBC

Category Land Holding ,Ha Percentage of farmers

Marginal <1 15.46Small 1.0-2.0 26.81

Semi Medium 2.0-4.0 29.89Medium Large 4.0-6.0 10.31Large >6.0 17.53

Current status of irrigation

← 94% of the RBC crop

land are irrigated

← Groundwater is the

dominant source

63.82%

20.55%

15.63%

Groundwater Rainfed Tank

Left Canal Command Area

Proportion of Irrigated area Source wise

→ 80% of the LBC crop

lands are irrigated

→ Groundwater is the

dominant source


63% 5.37%

19.56%

12.07%

GW Depth more than 25 m and less than 50 m

Area wise Composition of Groundwater Depth

GW Depth more than75 m and less than 100 m

GW Depth more than 50 m and less than 75 m

GW Depth more than 100m

.5102%

38.27%

5.102% 16.84%

39.29%

GW Depth less 25 m

GW Depth more than 25 m and less than 50 m GW Depth more than 50 m and less than 75 m

GW Depth more than 75 m and less than 100 m GW Depth more than 100 m

Number of Farmers wise Composition of Groundwater Depth

64.4%

26.04%

9.56%

Annual Crops Kharif Rabi

Right Canal Command Area

Composition of Cropped area


6.25%1.563%.3125%4.531%

40%

47.34%

Cashew Eucalyptus LemonPalmoil Sugarcane Tobacco

Right Canal Command Area

Cropping Pattern -Annual Crops


32.25%

64.68%

3.077%

Annual Crops Kharif Rabi


Composition of Cropped area

5.344%

13.74%

7.634%

72.52%

.7634%

Banana Cotton PalmoilSugarcane Teak


Cropping Pattern -Annual Crops

61.54%

38.46%

Paddy Sugarcane

Groundwater Depth more than 25m & less than 50m

Cropping Pattern

18.6%

58.14%

23.26%

Paddy Sugarcane Tobacco


Cropping Pattern

6.3%

27.33%

19.88%

46.58%

Lemon Paddy SugarcaneTobacco


Cropping Pattern

6.3%

27.33%

19.88%

46.58%

Lemon Paddy SugarcaneTobacco


Cropping Pattern

53.84%21.68%

17.91%

Banana Black gram Green gramLemon Paddy Palm moilSoya beans Sugarcane Tobacco

Groundwater Depth more than 100mCropping Pattern

53.84%21.68%

17.91%

Banana Black gram Green gramLemon Paddy Palm moilSoya beans Sugarcane Tobacco

Groundwater Depth more than 100mCropping Pattern

0 5,000 10,000 15,000 20,000Net value of Paddy (Rs/ha)

Tank

Surface

Rainfed

Groundwater

Conjunctive


0 2,000 4,000 6,000 8,000Yield (kg/ha)

Tank

Rainfed

Pump irrigation

Groundwater

Conjunctive

Canal

RabiKharif

RabiKharif

RabiKharif

RabiKharif

RabiKharif

RabiKharif

Season and Source of Irrigationwise

Yield of Paddy Yield


0 10,000 20,000 30,000 40,000Net Value (Rs/ha)

in Different categories of GW level

Net value (Rs/Ha) in Kharif

More than 25 m and less than 50 m



More than 100 m

10000

20000

30000

40000

Ne

t Va

lue

(R

s/H

a)

0 50 100 150Depth Of GW (meters)

Between GW Depth and Net Value

Fitted Relationship

Hig

her

Cap

acity

Pum

ps+

Div

ersi

fied

cr

oppi

ng p

atte

rn10000

20000

30000

40000

Ne

t Va

lue

(R

s/H

a)

0 50 100 150Depth Of GW (meters)

Between GW Depth and Net Value

Fitted Relationship

Hig

her

Cap

acity

Pum

ps+

Div

ersi

fied

cr

oppi

ng p

atte

rn

← Net value is high in areas with GW water depth 75-100m

→ They have high capacity pumps, and diversified cropping patterns

Polavaram project irrigation

315140175Cultivable Command Area

(‘000 Ha)

291129162Net irrigated area (‘000 Ha)

OverallRight Canal AreaLeft Canal Area

315140175Cultivable Command Area

(‘000 Ha)

291129162Net irrigated area (‘000 Ha)

OverallRight Canal AreaLeft Canal Area

Source: Indirasagar Multipurpose Project Environmental Impact Assessment Report (2005)-Government of Andhra Pradesh

Benefits and costs

25% reduction in Groundwater irrigated areas in the right canal command area

Scenario-IV

Present cropping pattern for annual cropsScenario -III

Different Cropping Pattern - Paddy-Kharif: Maize Rabi: Annual crops: Sugarcane and chillies

Scenario-II

proposed cropping pattern from the Andhra

Pradesh Environmental Impact Assessment Report: Paddy-Kharif:

Pulses Rabi: Annual crops: Sugarcane and chillies.

Scenario-I

DescriptionScenarios

25% reduction in Groundwater irrigated areas in the right canal command area

Scenario-IV

Present cropping pattern for annual cropsScenario -III

Different Cropping Pattern - Paddy-Kharif: Maize Rabi: Annual crops: Sugarcane and chillies

Scenario-II

proposed cropping pattern from the Andhra

Pradesh Environmental Impact Assessment Report: Paddy-Kharif:

Pulses Rabi: Annual crops: Sugarcane and chillies.

Scenario-I

DescriptionScenarios

Benefits and Cost

Scenario I II III IIAnnual Increase in the Value of crop Output -Left Bank In crorescrores

236.34236.34 276.81276.81 325.60325.60 236.34236.34

Annual Increase in the Value of crop Output -Right Bank In crorescrores

83.4283.42 141.61141.61 127127 146.16146.16

Annual Increase in the Value of crop Output - Total Command Area In crorescrores

319.76319.76 418.43418.43 452.60452.60 382.50382.50

Net Gain with Multiplier Effect ( 1.20) In crorescrores

383.71383.71 502.11502.11 543.12543.12 459.00459.00

Increase in Value (Rs)

Per cubic meter of water

0.770.77 1.001.00 1.091.09 0.920.92

Benefits and Cost analysis - Assumptions

• Assumptions-– Life of the Project-100yrs– Depreciation rate 1% per year– Rate of Interest –8%– Period of Construction-15 yrs– Rehabilitation Cost-None– Ignores the positive externalities of groundwater– Recharge and negative externalities of water logging

and salinity.

Cost of supplying irrigation

Estimated Total Cost of The Project for Irrigation (In crores)

4064.294064.29

Operation and Maintenance Cost (In Crores)

2.912.91

Depreciation Cost (In Crores)

40.6440.64

Annual Cost (In Crores) 368.70368.70

Benefit cost ratio and IRR

Scenario I II III IITotal Command Area

1.04:11.04:1 1.36:11.36:1 1.47:11.47:1 1.24:11.24:1

Right Bank 0.62:10.62:1 1.06:11.06:1 0.95:10.95:1 1.09:11.09:1

Left Bank 1.38:11.38:1 2.44:12.44:1 2.64:12.64:1 1.38:11.38:1

Internal Rate of Return (%)

6.386.38 7.877.87 8.458.45 7.407.40

3.58

5.25

3.95

5.52 5.26 6.24

0

2

4

6

Litres /day /animal

Groundwater Rainfed Surface

Source of Irrigation Wise Milk Production

Cattle Buffalo

Livestock benefits

1550.67

6453.4

2488.73

6218.55 5513.33

10755.8

0

2,000

4,000

6,000

8,000

10,000

Rs/animal/year

Groundwater Rainfed Surface

Source of Irrigation wise Net Value of Livestock per year

Cattle Buffalo

Scenario Scenario Net Gain

(RS Crores)

Net Gain (%)

I Farmers will retain less livestock in surface irrigated area the after Polavaram

25 10%

II Farmers will retain their livestock in surface irrigated area the after Polavaram

103 44.8%

III 10% reduction in Fodder Cost 45 19%

Livestock benefits

Salient Observation and Policy Implications

• Much of cultivated area in the proposed command area is already

irrigated, and particularly in the right canal command area.

• Ground water is the most dominating form of irrigation in the

command area.

• Farmers are using groundwater to grow high valued annual crops.

• Present cropping intensity is high as 165% in the right command

area due to extensive cultivation of annual crops using

groundwater irrigation

• Higher benefits if the farmers continue to grow annual crops and benefit

cost ratio will be more favorable for the implementation of the project.

• Polavaram Dam may also be useful in GW sustainability where much of the

groundwater resource is used to grow high valued annual crops ,

particularly in the rabi season.

• Livestock benefits will be substantial if the farmers retain their livestock even

after the introduction of surface water or with a reduction in fodder cost.

• Livestock can increase the overall benefits of the Polavaram dam by 8 to 32

% depending upon different scenarios.

• The gains will be maximum if the farmers grow maize for livestock feed in

the rabi season and retain their livestock.

Salient Observation and Policy Implications

Thank you

iwmi anik bhaduri, upali amarasinghe, tushaar shah, bk anand benefits and cost of irrigation water...

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