Economic Efficiency and Irrigation Water Policy with an Example from Egypt

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Abstract
Irrigation water policies can be enhanced by considering the economic dimensions of farm-level decisions and public goals regarding limited land and water resources. The definitions of three efficiency terms used to describe the performance of irrigation systems-irrigation, water use and economic efficiency-are reviewed, with a focus on the unique role of economic efficiency in policy analysis. Policies that modify economic parameters can motivate farmers to choose crops and irrigation methods that are consistent with public goals. Such policies include water prices or allotments, subsidies for improving irrigation methods, and the removal of output price distortions that favour crops with large water requirements in water-short regions. An example of economic issues regarding water policy in the Nile Valley and Delta is included.

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