THE ANALYSIS OF RISK IN IRRIGATION PROJECTS IN DEVELOPING COUNTRIES
| Published date | 01 February 1979 |
| Date | 01 February 1979 |
| DOI | http://doi.org/10.1111/j.1468-0084.1979.mp41001002.x |
THE ANALYSIS OF RISK IN IRRIGATION
PROJECTS IN DEVELOPING COUNTRIES
By IAN LIVINGSTONE AND ARTHUR HAZLEWOOD
This article deals with an issue that arises in the planning of irrigation schemes
in developing countries: the volume of water a scheme should be designed to
utilize when the volume of water available varies widely from year to year.'
The constraint on agricultural development can be taken to be the amount of
water available for irrigation development, rather than the supply of land. As
one standard text puts it,
'in the Near and Far East there are many regions where there is more land
suitable for irrigation than there is water available for irrigation. Therefore
we must use the available water resources as intensely as possible, as long as
it is economic to do so.'2
The issue arises because rainfall, and therefore the flow of the rivers, is much
greater in some years than in others.3 A scheme which has the capacity, in terms
of the area of land cleared and provided with canals, distribution channels and
other irrigation infrastructure, to make full use of the water available in good
years will suffer from water deficiency with insufficient water to irrigate the whole
area adequately in years of low water supply. The larger the land area developed
for irrigation the larger the investment cost and the greater the frequency of years
in which water is deficient. The smaller the capacity of the scheme, the smaller
the investment cost and the smaller the risk of water deficiency, but also the
smaller the ability to utilize the larger volumes of water available in good years.
With a large capacity investment is 'wasted' in dry years; with a small capacity
water is 'wasted' in wet years.
In other guises the issue under discussion is a familiar one in public economics:
it is the 'capacity margin problem' which faces planners in, for instance, the elec-
tricity supply industry, in which there is fluctuating demand for power (as com-
pared to fluctuating supply of water in our case) and it is necessary to trade off
reduced capital costs for smaller capacities against the consequences of excess
demand, load-shedding and unsatisfied customers. As Rees states, in this situation
1The argument of the article was developed in the course of a study of the development
potential of the Usangu Plains of Southern Tanzania which has been carrkd out by the authors,
and some use is made below of data from that study. See also an earlier article by the authors,
'Complementarity and Competitiveness of Large- and Small-Scale Irrigated Farming: A
Tanzanian Example', BULLETIN, August 1978.
2 E. Kuiper, Water Resources Project Economics, Butterworth, 1971, p. 120.
The discussion assumes run-of-the-river irrigation and no inter-year water storage by the
use of dams, 21
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