The determinants of household willingness to pay for irrigation water: in the case of Northern Showa, Amhara Region, Ethiopia

Abstract

Agricultural transformation is the current major concern of the Ethiopian government. This is important for the transformation of subsistence agriculture to an irrigated modern agriculture with potential for commercialization. The role of irrigation water and its pricing is very crucial to promote water use efficiency. Therefore, this study aimed to evaluate the determinants and estimate the willingness to pay for the irrigation water in the North Shewa Zone of the Amhara Region of Ethiopia, in order to determine if the irrigation water is viable. The study data were collected from primary data sources from 800 sample farm households. A bivariate probit model was used to identify the determinants of households’ willingness to pay for irrigation water in the study area. The results reveal that there is a positive willingness to
pay for irrigation water in north Shewa Zone. In average, the willingness to pay for irrigation water of the household for 0.25 hectares of land was about 3001.47 Ethiopian birr (equivalent to 100.05 USD by the current exchange rate) for one irrigation season. Moreover, the study identified that household family size, agricultural experience, household expenditure, irrigation land, education level of the household head, and livestock asset measured by Tropical Livestock Unit had a positive effect on farmers’ willingness to pay for irrigation water. While it is negatively influenced by age of the household head, farmers’ distance from the market, and
credit access. Based on the results, it is recommended that addressing credit constraints, improving the access to market via providing information and irrigation inputs. Thus, enhancing farm households’ awareness about irrigation water and its efficient use should be precondition for effective execution of sustainable irrigation use and irrigation water charging
systems.