Economic Viability of Rainwater Harvesting and Irrigation Development Interventions in Ethiopia and Kenya: an Application of Stochastic Impact Evaluation

Abstract

Alleviating poverty and meeting the growing demand for food is the top priority for economic and social development of the developing world. Accordingly, countries have been investing substantial amounts of their budget to develop agricultural infrastructure, such as rainwater harvesting and irrigation development structures. Considering the dependency of the communities in rainfed farming systems, the demand for rainwater harvesting and irrigation development is expected to increase. However, development planners and/or decision makers are facing difficulty in prioritizing alternative investments. Because such investments are complex and full of uncertainties. In this regard, Stochastic Impact Evaluation (SIE) technique is applicable to reduce prediction uncertainties and produce reliable information that can help decision and policy makers in prioritizing intervention options under system complexity and data scarcity. Despite the wide applicability of SIE, the technique is rarely, as well as recently, applied to evaluate agricultural development interventions. It is not yet applied to evaluate rainwater harvesting and irrigation development interventions. In addition, there is no existing literature on the viable rainwater harvesting and irrigation development interventions that captures the system complexity and prediction uncertainty. Therefore, the objective of the study is to assess the economic viability of rainwater harvesting and irrigation development interventions using SIE by taking an irrigation dam construction, road-water harvesting, and spate irrigation system interventions as a case study in Ethiopia and Kenya respectively. In the first objective, the economic viability of an irrigation dam development project in northern Ethiopia was evaluated. Model results indicate that the proposed irrigation dam project is highly likely to increase the overall benefits and improve food and nutrition status of local farmers. However, the overall value of these benefits is unlikely to exceed the sum of the investment costs and negative externalities involved in the intervention. Moreover, the simulation results suggest that the planned irrigation dam may improve income, as well as food and nutrition security, but would generate negative environmental effects and high investment costs. In the second objective, the economic viability of road-water harvesting structures was assessed for Tigray region of Ethiopia. We find that the proposed road-water harvesting structure is likely

to produce net benefits and improve the income of the households who live in the vicinity of the roads. However, the magnitude of the net benefits varies with type of road-water harvesting structures. The overall simulation results indicate that harvesting road-water using percolation structures is viable, whereas this does not seem to be the case for check dams. The result also identified construction cost of the structure, water holding capacity of the structure, water use efficiency and farm revenue as the most sensitive parameters that influence the simulated outcome. Furthermore, our result also indicated that the outcome for harvesting water with either farm ponds or a combination of all structures is uncertain and further measurement is required. In the third objective, the communal and environmental costs, benefits and risks of introducing a spate irrigation system in Turkana County were identified. Furthermore, the economic viability of developing spate irrigation systems in Turkana County, Kenya were assessed. The model result indicates that spate irrigation developments are likely to benefit the local communities as well as the environment. The return to investment is negatively correlated with the size of the structure. Furthermore, the chance of generating negative Net Present Value (NPV) increases with the size of the structure. The result also indicated that the communities in Turkana county could improve their household income if the government and/or non-governmental development agents invest in the development of viable spate irrigation infrastructures. Rainwater harvesting and irrigation development structures have the potential to improve agricultural production, household income, and at the same time create climate change resilient communities that withstands drought, dry spells, and flooding. However, this could lead us to incur higher investment cost, especially when the structure is big, such as an irrigation dam, which in return lowers its viability. The study revealed the applicability of SIE technique to evaluate agricultural development interventions in the face of system complexity, predictive uncertainty and data scarcity.