Evaluation of Alternative Policies of Irrigation Water Price. Application to Large Farms in Alentejo Region

C. Noéme, R. Fragoso

Abstract


Irrigation is economically important in many regions of Mediterranean Europe such as the
Portuguese region of Alentejo. The new Water Law proposed by the European Commission
points out that water management might be based on the principle of payment by users. These
issues have some effect on the cost pattern of the farmers, when considering the water cost.
However, the implementation of water tariff policies can provide a very important policy
instrument in order to promote an efficient use of water in the agricultural sector as well as to
avoid, at least partially, the loss of farm incomes. The main objective of this study is to
evaluate the effects of alternative policies of water price for irrigation in the farm income and
the production pattern, having in account the recovery of the public investment and the
operating costs with irrigation infrastructures. The methodology used is based on the estimate
of farm water demand and on the determination of the investment and the current costs of the
irrigation infrastructures. This study was applied to irrigated areas of Odivelas, in the South of
Portugal.

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