Section 12. Economic evaluation and feasibility
You have now reached the point where an accurate cost-benefit
analysis can be made of a proposed irrigation system. A typical example of such
an analysis follows.
A stream may be dammed to provide a water source. A stone
masonry wall, which will wash out during the rainy season, can be constructed
using an estimated 1,000 hours of labor to gather stones and construct the dam.
This will have to be repeated each year.
A distribution channel will be required which is 3 m wide, 12 cm
deep, and 800 m long. The estimated time to construct this channel is 2,000
man-hours. Each year, 200 hours will be required to maintain channels.
A furrow irrigation system is to be formed to cover 10 hectares.
The estimated time to level the land and dig the furrows is 4,000 hours. Wooden
farm turn-outs will be installed to serve three furrows from each turn-out, 50
turn-outs will be required and will cost $0.50 each when made by a local
carpenter and will be replaced each year at a total cost of $25 per year.
The field will be used to produce maize. Production costs and
yields and returns are shown in Table 12-1. It shows that additional production
costs will be required for seed, fertilizer, pesticides, labor, and taxes.
The tabulated costs and returns show that providing irrigation
without additional inputs of improved seed and fertilizer would not increase
yields enough to justify the additional irrigation costs. If improved crop
technology is assumed, however, the nonrecurring cost for digging the channel
should be easily justified by the additional $252 per hectare net return.
The tabulated economic analysis is a traditional approach to
project analysis from a developed country viewpoint where economic criteria are
based upon the principle of "maximizing profit."
Table 12-1. Production costs and
returns in dollars per hectare
Table 12-1. Production costs and returns in dollars per hectare
