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The Visayas Communal Irrigation Project

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Author Info

  • Glenn Jenkins

    (Queen's University, Canada and Eastern Mediterranean University, Cyprus)

  • Pastor T. Lorenzo Jr.

    (Lecturer and Researcher in HIID's PIAM)

  • Theresa Panuccio

    (Participant in the 1992 PIAM)

Abstract

This paper deals with the feasibility of a communal irrigation project in the Philippines where the farmer beneficiaries pay for the infrastructure cost and are responsible for the operating and maintenance cost of the irrigation system. A financial analysis from the investment, equity, and budget points of view and an economic evaluation are conducted on the incremental benefits of the project. Sensitivity and risk analyses are made to determine the variables that have high impact on the project's net present value. The analyses show that the project is very sensitive to the incremental palay production. The NPV from the investment point of view has a 15% chance of being negative. These points to the importance of the project components that address the constraints to higher farm productivity such as limited technology transfer, unavailability of high yielding variety seeds, lack of applied research, poor water management, inadequate farmer training and large post-harvest losses. The NPV from the equity and economic points of view are very robust and they do not have a chance of being negative. The former is due to the subsidy given to the farmer beneficiaries while the latter is the result of the high economic value of palay. Aside from the farmers the other major beneficiary of the project is the landowners who lease their farms because they get 25% of the gross value of production as lease payment.

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File URL: http://www.queensjdiexec.org/publications/qed_dp_216.pdf
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Bibliographic Info

Paper provided by JDI Executive Programs in its series Development Discussion Papers with number 1994-07.

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Length: 36 pages
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Handle: RePEc:qed:dpaper:216

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Related research

Keywords: communal irrigation; integrated investment appraisal; palay cultivation; Visayas; Philippines;

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References

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  1. Elinor Ostrom & Roy Gardner, 1993. "Coping with Asymmetries in the Commons: Self-Governing Irrigation Systems Can Work," Journal of Economic Perspectives, American Economic Association, vol. 7(4), pages 93-112, Fall.
  2. Glenn Jenkins & D.N.S. DHAKAL, 1991. "International Trade In Energy: The Chukha Hydro-Electric Project In Bhutan," Development Discussion Papers 1990-01, JDI Executive Programs.
  3. Small, L. E. & Adriano, M. S. & Martin, E. D. & Bhatia, R. & Shim, Y. K. & Pradhan, P., 1989. "Financing irrigation services: A literature review and selected case studies from Asia," IWMI Books, Reports H005735, International Water Management Institute.
  4. Small, Leslie E. & Adriano, Marietta S. & Martin, Edward D. & Bhatia, Ramesh & Shim, Young K. & Pradhan, Prachanda, 1989. "Financing irrigation services: a literature review and selected case studies from Asia," IWMI Books, International Water Management Institute, number 114041.
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Cited by:
  1. Glenn Jenkins & Chun-Yan Kuo & Arnold C. Harberger, 2011. "Cost-Benefit Analysis for Investment Decisions: Chapter 10 (Economic Prices for Tradable Goods and Services)," Development Discussion Papers 2011-10, JDI Executive Programs.

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