Valuing water as an economic good in dryland areas - balancing the need for food, environmental and financial security
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Waughray D. K, Alexander Rodriguez. (31/12/1998). Valuing water as an economic good in dryland areas - balancing the need for food, environmental and financial security. London, United Kingdom of Great Britain and Northern Ireland.
Abstract
Two watersheds, one in north western Syria and the other in south east Zimbabwe are looked at. Both locations are water scarce and food insecure. In both areas field work has found households making multiple and highly productive uses of small amounts of water. These are usually small-scale, informal systems of water use. Within both watersheds, there are also large-scale irrigation schemes. These large systems are much more formal, and are viewed as
the providers of national food and economic security. But, research indicates that water is used more productively in the smaller, more informal systems. These small schemes also create far fewer environmental costs and externalities. They also provide most of the inputs which maintain household food, water and income security on a day to day basis.
Due to various resource constraints, both regions need to develop water management strategies whereby water is treated much more as an economic good. In the Syrian watershed, the problem is to not only improve the supply of potable water, but also to arrest a declining water table. In the Zimbabwean watershed, the problem again is not only to improve the supply of potable water, but also to meet stringent cost recovery targets in the water supply sector. It has been suggested that both regions need to move towards more realistic valuation strategies for water. In both locations, some formal charges for water currently exist, but these prices do not pass on the economic cost of using the water to the consumer. The challenges inherent in adjusting the management systems of water in these two watersheds to reflect the water's economic value are examined. There are several institutional, cultural and
property rights related difficulties. A key issue is striking the balance between ensuring access to water to promote food and income security and valuing the water to incorporate its environmental, opportunity and scarcity costs. The similarities in the difficulties faced and the recommendations suggested for each location are assessed. The paper discusses whether economic systems for water resource management are bound to be unique to each environmental, cultural and political location, or could (and should) economic research and experience on water resource valuation in such locations be generalised
