Identifying Water Poverty LinksIdentifying Water-Poverty Links At Plot Level
iLisa BennettStephen VostiSFRB Team
Center for Natural Resources Policy
UCD/EmbrapaSeptember 2008
Resources Policy Analysis -- CNRPA
Presentation Overview• Quick Overview of the SFRB• Application of Land Use Systems Analysis• Usefulness for Research• Usefulness for Policy Guidance
UCD/Embrapa
Water Availability
UCD/Embrapa
Spatial Distribution of Rural PovertyRural Poverty
UCD/Embrapa
Key Objectives of Hydro-Economic Models
• Understand Farmer Behavior and Outcomes– Cropping patterns, input mix, water use– Income– Surface water and groundwater availability
• Predict the Effects of Proposed Policy and other Changes on Farmer Behavior/OutcomesChanges on Farmer Behavior/Outcomes
• Inform Policy• Modeling at Three Spatial ExtentsModeling at Three Spatial Extents
– Plot-Level LUS Models– Buriti Vermelho Models
UCD/Embrapa
– Basin-Wide Models
One Tool -- LUS Analysisy• Focus on Land Use Systems (LUS)
– Multi-year duration – Different intermediate and end uses
• Estimate Economic Performance– Discounted streams of input costs and product revenuesDiscounted streams of input costs and product revenues
• Technical coefficients and input/output prices– Calculate economic returns to key factors of production
• Land, labor,
• Estimate the Environmental Effects– E.g., carbon stocks, water use
• Estimate the Sociocultural Effects• Estimate the Sociocultural Effects– E.g., food security, labor requirements
• Highlight Institutional Impediments to LUS Adoption
UCD/Embrapa
• Compare Across LUS – Trade-Offs/Synergies
Land Use System Analysis
• Spatial Resolution, Time Steps, and Temporal Extent– Single parcel of land, specific series of cropping activities,
specific production and water use technologies specific endspecific production and water use technologies, specific end date
– Annual time stepsMulti year duration– Multi-year duration
– Different intermediate and end usesField #1Field #1Year 1
Field #1Year 2 Field #1
Y 3Year 3 Field #1Year 4 Field #1
Year 10 Field #1
UCD/Embrapa
Year 15
Agriculture in the SFRB -- 1991
UCD/Embrapa
Agriculture in the SFRB -- 2004Harvested Specialty Crops, 2004
São Francisco River BasinHarvested Grains2004
Petrolina
2004
Harvested Area (ha)Harvested Area (ha) Harvested Area (ha)at Município Level
None
1 - 2,500
2,501 - 10,000
10,001 - 50,000
Montes Claros
Harvested Area (ha)at Município Level
None
1 - 2,000
2,001 - 5,000
5,001 - 10,000 10,001 50,000
50,001 - 200,000
200,001 - 401,980
BetimDivinopolis
Sete Lagoas
Belo HorizonteRibeirao das Neves
5,001 10,000
10,001 - 20,000
20,001 - 431,441
Lambert Azimuthal Equal Area
1:9,000,000Scale0 100 200 30050
Kilometers
UCD/Embrapa
Map by J A Young, 12 September 2007
Lambert Azimuthal Equal Area Projection, WGS-84.
LUS Under Evaluation in Petrolina
S ll S l G t/Sh P d ti• Small-Scale Goat/Sheep Production– 46 hectares, rainfed, low-tech, some fodder
• Mango Production – Flood Irrigation– 4 hectares, two years annual crop production
• Mango Production – Micro-sprinkler Irrigationg– 4 hectares, two years annual crop production
UCD/Embrapa
Assessment of Small-Scale Goat/Sheep LUSGoat/Sheep LUS
Economic PerformanceLabor Requirements
Total Family
NPV of the LUS
NPV of the LUS per hectare
Excess Returns to
Family Labor
Returns to Land
Rate paid to Family Labor that sets NPV
to Zero
Ratio of Wage that Sets NPV
to Zero to Wage for Day
Labor$R/
Establish-ment
Operational Phase
yLabor Used
(both Establishment
and Operational
Ph )$R $R/ha
$R/ person-day $R/ha/year
$R/ person-day
-12 0 0 0 16.99 1.00
Phase)
person-days/ha
person-days/ha/
yearperson-days/
ha/year70 6.3 7.8
Water for Irrigation
Cost of Cost of Water Water EmploymentEstablishing
Irrigation System on
the Property
Establishing Irrigation
System on the LUS Plot
Operational Costs Water Use
Water Productivity
(NPV/ 1000m³)
Productivity
(kg produced/ 1000m³)
EmploymentOperational Phase(Contracted Labor)
person-days/ha/year0
UCD/Embrapa
$R $R/ha $R/ha/year1000M3/ ha/year $R/ 1000m³ kg/ 1000m³
0 0 5.5 4 0.00 14.20
0
Assessment of Small-Scale Irrigated Mango LUS Flood IrrigationMango LUS – Flood Irrigation
Economic Performance Labor Requirements
NPV of the LUS
NPV of the LUS per hectare
Excess Returns to
Family Labor
Returns to Land
Rate paid to Family
Labor that sets NPV to Zero
Ratio of Wage that Sets NPV to Zero to Wage for
Da Labor
Establishment (Family Labor and Contracted
Labor)
Operational Phase (Family
Labor and Contracted
Labor)
Total Family Labor Used (Operational
Phase)Day Labor
$R $R/ha$R/ person-
day$R/ha /year
$R/ person-day
2,512 628 1 31 18.70 1.10 Person-days /haPerson-days
/ha/yearperson-days/
ha/ year35 138 45
Water for Irrigation Employment
OperationalCost of
Establishing Irrigation
System on the Property
Cost of Establishing
Irrigation System on the
Plot
Operational Costs Water Use
Water Productivity
(NPV/ 1000m³)
Water Productivity
(kg produced/ 1000m³)
Operational Phase
(Contracted Labor)
UCD/Embrapa$R $R/ ha $R/ha/ano
1000M3/ ha/year $R/ 1000m³ kg/ 1000m³
553 138 1,177 8.64 2.50 1,424
person-days/ha/ year93
Assessment of Small-Scale Irrigated Mango LUS Micro Sprinklers
Economic Performance
NPV of the ExcessRate paid to
Family
Ratio of Wage that
Mango LUS – Micro SprinklersLabor Requirements
EstablishmeOperational
NPV of the LUSNPV of the
LUS per hectare
Excess Returns to
Family Labor
Returns to Land
Family Labor that sets NPV to
Zero
gSets NPV to
Zero to Wage for Day Labor
Establishment (Family Labor and Contracted
Labor)
Phase (Family
Labor and Contracted
Labor)
Total Family Labor Used
(Operational Phase)
$R $R/ha$R/ person-
day $R/ha /year$R/ person-
day
2,897 724 1 36 19.10 1.21Person-days
/haPerson-days
/haperson-days/ ha/
year44 100 32
Water for Irrigation
Cost of Establishing
Cost of Establishing Operational
Water Productivity Water
Productivity
Employment
OperationalIrrigation System on
the Property
Irrigation System on
the Plot
Operational Costs Water Use
(NPV/ 1000m³)
Productivity(kg produced/
1000m³)
Operational Phase
(Contracted Labor)
UCD/Embrapa
$R $R/ ha $R/ha/ano 1000M3/ ha/year $R/ 1000m³ kg/ 1000m³4,212 1,053 973 6.3 6 1,811
person-days/ha/ year69
Cross-LUS Comparisons
LUS Economic Performance Labor Requirements Water for Irrigation Employment
NPV of the LUS
NPV of the
LUS per
hectare
Returns to Land
Zero-Profit
Wage to MarketWage
Establish-ment
Opera-tionalPhase
Establish-ment Costs
on Farm
Establish-ment Costs
on Plot
Opera-tionalCosts
Water Use
Water Productivity
Operational Phase
(Contracted Labor)
$R $R/ha$R/ha /year ratio
Person-days /ha
Person-days /ha $R $R/ ha
$R/ha/yr
1000M3/ ha/year
NPV (R$)/ 1000m³
person-days/ha/ year
Goats and Sheep -12 0 0 1 70 6.3 0 0 5.5 4 0 0Mangos --gflood irrigation 2,512 628 31 1.10 35 138 553 138 1,177 8.64 2.50 93Mangos --micro sprinkler 2,897 724 36 1.21 44 100 4,212 1,053 973 6.3 6 69
UCD/Embrapa
Effects of Uncertainty and RiskEff t f M t lit U t i tEffects of Mortality Uncertainty
on NPV per Year
Effect of uncertainty in output prices for mangoes on NPV per year
UCD/Embrapa
Conclusions and Policy Implications
• Irrigation-Led Intensification:Irrigation Led Intensification:– Can increase farm profits– Can increase water productivityCan increase water productivity– Requires investment capital– Can reduce on-farm employmentp y
• None of these LUS Can Lift a Family of 4 Out of Povertyy
• Asset Poverty– Financial capital
UCD/Embrapa
p– Family labor
Benefits to Researchers• Quick and Easy
F ilit t I t di i li I t ti• Facilitates Interdisciplinary Interaction• Help Non-Economists Speak ‘Policy’
P t i l bi h i l– Puts an economics overlay on biophysical processes– Provides quantitative estimates of key variables
• Allows for Introducing Uncertainty and• Allows for Introducing Uncertainty and Assessing Risk
• Help Assess the Effects of Policy Changes andHelp Assess the Effects of Policy Changes and Public Investments– Water price policy
UCD/Embrapa
p p y– Technological change
Muito Obrigado!
UCD/Embrapa