IMPROVING IRRIGATION WATER ALLOCATION EFFICIENCY USING ALTERNATIVE POLICY OPTIONS IN EGYPT

This study provides an empirical perspective on alternative irrigation policies for allocating limited water to agricultural production in Egypt. Positive mathematical programming is used for model calibration. Three policy options for Egypt are tested: water pricing, water complementary input factor taxes, and output taxes. The results of the research show that: 1) water pricing needs to be much higher than the recovery cost in order to be effective in limiting irrigation water use; 2) at a higher tax rate, fertilizer and energy taxes are effective in reducing the irrigation water demand while maintaining adequate welfare levels; 3) a pesticide tax is less effective than fertilizer or energy taxes; and 4) an output tax on sugar cane and rice would decrease irrigation water demand substantially while allocating land to other crops which are less water intensive and have higher market values.