Optimal allocation of irrigation water in Egypt - a dynamic approach
Darwish, Mohamed Ragy
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Currently, Egypt is faced with several fundamental problems: an ever-increasing population, a limited supply of cultivable land and a limited supply of water resources. These problems intensify the importance of developing efficient natural resource use strategies. The future of Egypt depends on the water stored in the Nasser Lake reservoir for all purposes. There is strong evidence that governmental policies in the agricultural sector have led to an inefficient allocation of resources in general and water resources in particular, the latter being the focus of this study. These policies should be examined within sound economic frameworks, and policy alternatives should be tested to insure the efficient use of water resources. The last drought in Africa brought attention to the need for optimal intertemporal allocation of this vital resource. The main objective of this study was to determine optimal decision rules of cropping mix and irrigation water in Egypt under different policy settings and water inflow levels. This study tests the impact of these policies and water availability on the optimal decision rules in an intertemporal context. A total of 10 dynamic programming models were developed to address the objective. The models considered two different policy settings. The first setting included the current agricultural policy of cropping area regulations and administered prices in both agricultural inputs and outputs markets. In the second setting, the elimination of these policies was assumed to simulate free market conditions. Both policy settings were tested under five different water inflow scenarios over a 30-year planning horizon. The derived optimal decision rules for the different models were used to construct a Decision Rule Matrix, which summarizes the optimal course of action that should be pursued given a particular condition. The results obtained indicate that the elimination of current agricultural land regulation and the modification of the policies, with respect to prices in both inputs and outputs markets in the Egyptian agricultural sector, would lead to higher revenues and to an increase in water use efficiency. The study also revealed that if such deregulation actions were to take place, a reduction in the variation of regional and intertemporal water allocation would be achieved. This in turn would reduce the managerial burden of water control and allow for better water management. Furthermore, such actions would lead to a regional crop consolidation process which would ease the managerial and administrative effort requirements for crop production and water control.