The Subsurface Drainage Facility Project: Performance Evaluation and Economic Feasibility

This study aimed to find an effective and efficient direction for future projects through the performance evaluation of the drainage improvement project. To achieve the goal, it analyzed the effects on rice production and welfare after the drainage improvement project was administered by the Korea Rural Community Corporation (KRC) by applying the difference in differences (DID) estimation method and an equilibrium displacement model (EDM). Primarily, this study focused on subsurface drainage facilities’ effects on production, which consisted of an increase in yields and a decrease in the time of operating agricultural machines. The analysis result showed that the amount of yields increased by 18.75kg/10a, while machine operation decreased by 6.61 min./10a after the implementation of the project. We found that these effects were reduced when the slope of a field increased or a drainage grade deteriorated. We also discovered that the producer surplus increased by 3,129.9 million won due to a change in the equilibrium of regional rice market affected by the project for 30 years. We calculated the net benefit to be 279.9 million won. The net profit increased when project target areas were selected in consideration of a drainage class and a slope degree. The level of increase in net profit was higher when considering the drainage class than the slope. The results implied that the drainage class is relatively more significant than the slope among the criteria for selecting project target areas to improve project effectiveness.