Input and output constraints affecting irrigation development

Abstract

In many of the developing countries the expansion of irrigated agriculture is used as a major development tool for bringing about increases in agricultural output, rural economic growth and income distribution. Apart from constraints imposed by water availability, the major limitations considered to any acceleration of such programs are usually thought to be those of costs and financial resources. However, as is shown on the basis of empirical data drawn from Mexico, in reality the feasibility and effectiveness of such development programs is even more constrained by the lack of specialized physical and human factors on the input and market limitations on the output side. On the input side, the limited availability of complementary factors such as, for example, truly functioning credit systems for small-scale farmers or effective agricultural extension services impose long-term constraints on development. On the output side the limited availability, high risk, and relatively slow growth of markets for high-value crops sharply reduce the usually hoped-for and projected profitable crop mix that would warrant the frequently high costs of irrigation investments. Three conclusions are drawn: 1. (1) Factors in limited supply have to be shadow-priced to reflect their high opportunity costs in alternative uses.2. (2) Re-allocation of financial resources from immediate construction of projects to longer-term increase in the supply of scarce, highly-trained manpower resources are necessary in order to optimize development over time.3. (3) Inclusion of high-value, high-income producing crops in the benefit-cost analysis of new projects is inappropriate if these crops could potentially be grown in already existing projects.