Farmers Willingness to Pay for Irrigation Water Use: The Case of Haramaya District, East Harerghe Zone, Oromia Regional State, Ethiopia

Abstract

The value of irrigation water is a measure of the net economic contribution of water to the value of agricultural production. The economic value of irrigation water was determined through the Contingency Valuation Method by analysing farmers’ willingness to pay for irrigation water under a hypothetical market constructed in the study area. The objectives of the study were to analyse determinants of willingness to pay for irrigation water use by individual households and to evaluate their WTP for irrigation water use per hectare of irrigable land per year. Ordered Logit Model was used to identify and analyse the factors that determine farmers’ WTP for irrigation water. In addition, the bivariate logit model was used to calculate the mean WTP for irrigation water use per hectare per year. The result of the ordered logit model showed that six explanatory variables were found to be significant at different probability levels. On the other hand, the result of the bivariate logit model showed that the household head mean annual WTP amount was Birr 7,402.32 per hectare per year. The results show that practical intervention measures for constructing, managing and maintaining irrigation infrastructure with community participation should consider the value they give for the resource. Policy directions for sustainable use of irrigation water and management in Ethiopia were also suggested.

Keywords: Contingent Valuation, Economic Value, Irrigation Water, Sustainability, Willingness to Pay

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