An Economic Analysis of Public Interventions

for Amelioration of Irrigation-Induced

Soil Degradation
Abstract
The study has reported the impact of public interventions for
amelioration of soil degradation through subsurface drainage
technology in the Tungabhadra Project area in Karnataa! The primary
data" obtained from #$% farmers of T&P area" have been analysed using
budgeting" discounted cash flo' measures and gini ratio! The provision
of subsurface drainage through public interventions" has increased the
productivity of land appreciably (#)) per cent* and has provided a
source of regular income (+s #,"),)-ha from paddy* to resource-poor
households! The technology has been found to be cost effective"
socially acceptable and economically feasible! The e.uity analysis has
indicated reduction in ine.ualities in income distribution during the
post-drainage period! The study has suggested that the government
should aim at encouraging and educating the affected farmers in
adopting subsurface drainage technology on a large-scale!
Introduction
India/s primary concern is to increase food production to feed its ever
increasing population! &ut" increase in agricultural production is not possible
due to many factors that include soil degradation and unscientific 'ater
management practices! Irrigation-induced soil degradation is posing severe
threats to agricultural production due to its adverse impact on sustainability
of soil and 'ater resources! E0cessive irrigation - unscientific 'ater
management practices coupled 'ith poor drainage are the major causes of
#
1ollege of Agriculture" 2avile" Shimoga-%33
4$5 E-mail 6 chinnappaprof7 rediffmail!com
4
Department of Agricultural Economics" 8AS" 9K:K" &angalore-%)$$)%
E-mail 6 nagarajnareppa7yahoo!com
The authors are thanful to the referee for his suggestions
,3) Agricultural Economics +esearch +evie' :ol! 4$ ;uly-December 4$$3
soil degradation! Soil degradation in the form of soil salinity and 'aterlogging is
'ide spread in the irrigated tracts of arid and semi-arid regions! All these forms
of soil degradation are restricting crop production in about 5% million hectares of
irrigated land at the global level! <ut of 43$ million hectares of irrigated land in
the 'orld" about #!$-#!% million hectares land is lost annually due to salinity and
'aterlogging (=A<" #>>$*! The e0tent of damage due to salinity has been
estimated at ##!5 billion 8S dollars (9hassemi" #>>%*! A recent estimate has
pointed out that damage due to salinity and 'aterlogging is of the order of 4$ -
,$ per cent of the annual production on normal soils (Datta and Dejong" 4$$4*!
;oshi et al! (#>>%* have indicated yield reduction in the range of )5-35 per cent
in paddy due to salinity under Sharada Sahaya irrigation project! There are no
accurate and reliable data on the e0tent of soil salinity and 'aterlogging! It has
been reported that the area under these problem soils in the country is in the
range of %!%-#, million hectares (Datta and ;oshi" #>>,*! The 1entral Soil
Salinity +esearch Institute (1SS+I*" Karnal" had started research on salinity and
'aterlogging during #>?$s on pilot basis by installing subsurface drainage in
@aryana! The results indicated that soil salinity and 'aterlogging could be
reclaimed through subsurface drainage! <ver'helmed by the success of the
e0periments carried out by 1SS+I" the scientists and the policymaers have
advocated sub-surface drainage to ameliorate problem soils to boost agricultural
production!
+ealiAing the importance of utiliAing vast tracts of saline and 'aterlogged
soils for crop production" focus has been on the drainage aspects of soils by the
policymaers at the government level! &oth central and state governments have
been initiating several measures from time to time to address these critical
issues! In an attempt to augment land resources for productive use" siAeable
investments are being made! @o' far these investments are economically
feasible needs to be evaluated! Successful 'oring of the technology and its
favourable economic gains 'ould convince the government in prioritiAing
investments in land improvement! It is 'ith this bacground" that a study 'as
undertaen 'ith the overall objective of e0amining the various economic
dimensions of public interventions through subsurface drainage for amelioration
of soil degradation induced by irrigation!
Bethodology
The study 'as undertaen to get insights into the problem of soil
degradation in the irrigated tracts of Karnataa state! The state has five irrigated
command areas" namely 1auvery" Balaprabha and 9hataprabha" &hadra"
Tungabhadra and 8pper Krishna! Among these" Tungabhadra project has the
highest area under soil degradation due to salinity and 'aterlogging (about
5>$$$ ha*! @ence" Tungabhadra project area 'as purposively selected
1hinnappa et al!6 Public Interventions for Amelioration of Soil Degradation ,33
for the present study! The Tungabhadra dam has four branch canals" t'o
each on either side" namely +ight &an @igh Cevel 1anal (+&@C1*"
+ight &an Co' Cevel 1anal (+&CC1*" Ceft &an @igh Cevel 1anal
(C&@C1*" Ceft &an Co' Cevel 1anal (C&CC1*!
The Ceft &an Co' Cevel 1anal has highest area under the above t'o
problematic soils (4>)$$ ha*! <f the #$) distributaries of C&CC1" 3)
th
distributory 'hich accounts for the largest area of soil degradation (3$$$ ha*
'as chosen! The government is implementing land reclamation programmes
in collaboration 'ith Tungabhadra project area authorities in the affected
area by installing subsurface drainage! The village &yag'at 'as the major
beneficiary of such government sponsored programmes as severity of the
problem 'as more in the village! The state government had implemented
land reclamation schemes during #>>$->4! @ence" this village 'as chosen
for evaluation of the impact of state interventions in amelioration of
irrigation-induced soil degradation! =or this" a list containing %% beneficiary
farmers of government-sponsored land reclamation programmes 'as
obtained from 1ADA office (adoptors*! Another sample of %$ affected
farmers 'ho had not taen any land reclamation measures 'as chosen for a
comparison (non-adopters*! Thus" the overall sample siAe comprised #$%
farm households! The data 'ere collected from the respondent farmers 'ith
the help of pre-tested intervie' schedule by survey method! The data
included general information" landholdings" land-use pattern" cropping
pattern" yields" area under salinity and 'aterlogging" reclamation measures"
etc! The data 'ere analysed using budgetary method and discounted cash
flo' techni.ues such as benefit-cost ratio" net present value" internal rate of
return" paybac period and gini coefficient!
The respondent farmers 'ere post-stratified into resource-rich and
resource-poor farmers" based on the siAe of their landholdingsD farmers
having landholdings of less than one hectare 'ere classified as resource-
poor and 'ith one and more than one hectare 'ere classified as resource-
rich farmers!
+esults and Discussion
Socio-economic 1haracteristics of Sample =arms
The average age of the respondent farmers in both the groups 'as in the
range of 5%-5) years" indicating that they 'ere in the middle age group 'ith
ade.uate mental maturity! Education is yet another factor that provides a
positive mindset in the process of decision-maing! A majority of the farmers
had not crossed the primary level of education" indicating poor educational
,3? Agricultural Economics +esearch +evie' :ol! 4$ ;uly-December 4$$3
status in the area! The education level of the adopters category 'as very poor
as compared to that of non-adopters! Irrespective of their education level" the
adopters 'ere compelled to adopt sub-surface drainage technology to
ameliorate their limited land resources and to ensure food and employment
for their families! The family siAe of both non-adopter and adopter groups
has been found to be almost at par! The average siAe of landholding across
the t'o groups 'as 4!3$ ha and $!3, ha" respectively" indicating that most of
the non-adopters 'ere medium farmers and adopters 'ere small and
marginal farmers! The average siAe of landholdings 'as relatively larger for
non-adopters than adopters! The proportion of degraded land due to salinity
and 'aterlogging 'as %4!)$ per cent in non-adopters and #$$ per cent for
adopters! This indicated that soil degradation due to soil salinity and
'aterlogging 'as posing severe threats to agricultural productivity in the
region! The soils in the study area are vertisols" 'hich further aggravate the
problems! The problem of soil degradation has been persisting in the region
for more than a decade (Table #*!
Drainage Investment
Subsurface drainage technology has been advocated for amelioration of
saline and 'aterlogged soils! The technology has been demonstrated and
implemented at farmer/s field by the government agencies! The details about
drainage investment have been given in Table 4! The estimated cost of providing
drainage at current prices for reclamation of one hectare of problem
Table #! Socio-economic profile of the respondent farmers in Tungabhadra Project
area
Particulars 2on-adopters Adopters
(8nreclaimed farms*
(+eclaimed
farms*
Age (years* 5% 5)
Education (years of formal
education* , #
=amily siAe (2o!* ) %
=arm siAe (ha* 4!3$ $!3,
Degraded land (ha* #!54 E
Duration of the problem (years* ## #%
Percentage of soil degradation %4!) #$$
Cand reclaimed (ha* $!%>
Soil type &lac &lac
1ropping system Paddy-Paddy Paddy-Paddy
Source of irrigation 1anal 1anal
Economic status
a* +esource-rich (2o!* 3
b* +esource-poor (2o!* 5?
1hinnappa et al!6 Public Interventions for Amelioration of Soil Degradation ,3>
Table 4! 1ost of installation of sub-surface drainage
(+s-ha*
Particualrs 1ost
Earth'or
Bain drain ,5$
Cateral drain #%#,
Sub-total #?%, (##!%>*
Pipe 'or
Bain drain 444)
Cateral drain ##$))
Sub-total #,4>4 (?,!##*
Accessories
T- joints 3%
1ement pipe 43#
1onstruction of protection 'all #3$
Inspection chamber 4)5
Sub-total 3?$ (5!??*
1ost on survey )3 ($!54*
Total #%>>4 (#$$!$$*
2ote6 =igures 'ithin the parentheses indicate percentages to the total
land 'ors out to be +s #%>>4--! Digging of trenches" laying of pipes and
covering it by envelop material accounted for a huge share (?,!## F* in the
total cost! It 'as substantially high due to inclusion of costs on labour and
material! The drainage material consisted of burnt clay pipesD the laterals
'ere perforated 'hile the main pipes 'ere unperforated! The drainage
removed e0cess 'ater and created congenial environment for plant gro'th!
The optimum spacing advocated for lateral drains 'as ,$ metres! The
amount involved in laying drainage at the farm level 'as too large to be
spent by small and marginal farmers! Therefore" it calls for public
interventions to mitigate the hardship of this vulnerable section of society!
Productivity 1hanges
It 'as noticed that subsurface drainage technology had a profound
impact on crop productivity! &efore reclamation" the productivity 'as
#?!,$ .-haD it increased to 5?!)? .-ha after reclamation" depicting a gain
of ,$!,? .-ha" i!e! #)) per cent!
Income
The increased output on reclaimed farms provided additional income to the
farmers! The net income on reclaimed farms 'as of +s #,"),)-ha" as against the
loss of +s 4>>>-ha on unreclaimed farms" registering an appreciable increase
(Table ,*! The loss-maing farms became profit-earning
,?$ Agricultural Economics +esearch +evie' :ol! 4$ ;uly-December 4$$3
farms after reclamation! Thus" the government interventions had positive
impact on productivity and income! ;oshi and Singh (#>>$* had also
reported similar findings in their study!
Economic =easibility
Investment on drainage is a long-term proposal involving long gestation
period! It is necessary to e0amine the feasibility of such long-term investment
proposals! @ence" data 'ere analysed to find the economic feasibility of
investment on drainage by using discounted cashflo' techni.ues such as
Table ,! 1osts and returns of paddy production on reclaimed and unreclaimed
lands of Tungabhadra Project area
(+s-ha*
Particulars Amount
+eclaime
d 8nreclaimed
:ariable costs
@uman labour 5?,? 5#)$
&ulloc labour %#% ,#%
Bachine labour 4,5, 45%>
Seeds ?>4 3>,
Banure ), 555
=ertiliAers 5)>, ,)%%
1hemicals #%?3 #3%4
Irrigation charges ?3 ?3
Ginc sulphate ,55 -
Annual repairs ,% 4)4
Interest on H!1! 7 #5F %,? 5?5
Sub-total #%>,% #55##
=i0ed costs
Cand revenue #> #?
Interest on fi0ed assets 7 #$F ,% 5?#
Depreciation #)$ %#,
+ental value of land ,)3% #4#3
AmortiAed cost of subsurface drainage 7
4F )4% -
for 4$ years
Sub-total 5%#5 #,>3
9rand total 4$55> #))5$
:alue of output
Bain product ,5$3) #,,%)
&y-product 34> 4?%
Sub-total ,5?$% #,)5#
2et income #,),) -4>>>
&!1! ratio #!3# $!?4
1hinnappa et al!6 Public Interventions for Amelioration of Soil Degradation ,?#
Table 5! Economic feasibility measures of sub-surface drainage in Tungabhadra
Project area
Beasures
Sensitivity
analysis
Actu
al #$F increase 1onstant
#$F
increase
value
s
in costs
and in costs costs and
#$F
decrease and #$F
in benefits constant decrease
benefits in benefits
2et present value (+s*
#"43")
45 )3")), #"$5"$4% >#"4)4
&enefit - cost ratio #!%5 #"4) #!5$ #!,?
Internal rate of return
(F* )> 5, %) %%
Pay bac period (Iears* $!%? - - -
net present value" benefit-cost ratio" internal rate of return and paybac
period! An interest rate of #% per cent 'as considered as opportunity cost
of capital to discount the cost and benefit streams by assuming the life
period of subsurface drainage to be 4$ years! The results of this analysis
are given in Table 5! The net present value 'as positive" indicating that
drainage could recover a sum of +s #"43")45-- over its life period after
accounting all the costs" including the opportunity cost of capital! The
benefit-cost ratio 'as more than unity" indicating that investment on
drainage 'as 'orth'hile generating a gross returns of +s #!%5 for every
rupee of investment! It is encouraging to note that internal rate of return
'as )> per cent! Since the internal rate of return 'as higher than the
prevailing interest rate" the investment is economically feasible!
The sensitivity analysis has been carried out to no' the impact of
changes in cost and benefit streams on the above parameters! 8nder the
first scenario" even if the costs increased by #$ per cent and returns
decreased by #$ per cent" still the investment on subsurface drainage 'as
economically feasible! Similarly" under the second (#$ per cent increase
in costs and no change in benefits* and third (#$ per cent decrease in
benefits and constant costs* scenarios also" there 'as not substantial
impact on 2P:" &1+ and I++! Thus" the sensitivity analysis indicated
that investment on subsurface drainage technology 'as economically
feasible! ;oshi et al! (#>?3*" ;oshi (#>?,* and Datta and de ;ong (#>>3a"bD
4$$$* have also reported similar observations!
=armers/ Perceptions of Subsurface Drainage
=armers/ perceptions about subsurface drainage 'as elicited to no'
their opinion about the technology! Bore than 34 per cent of the adopters
reported that adoption of subsurface drainage technology had become
,?4 Agricultural Economics +esearch +evie' :ol! 4$ ;uly-December 4$$3
inevitable for them due to their limited land resources! Bost of the
adopters of subsurface drainage 'ere small and marginal farmers" and
their livelihood 'as at stae 'ith degradation of their landholdings!
About )4 per cent of the sample farmers opined that technology had
helped them to increase their crop yields and according to ,) per cent
farmers" it provided ade.uate food security to them! =or 54 per cent
adopters" it 'as the availability of government subsidy that served as
incentive to adopt technology on their farms! :ery fe' farmers (>!#$F*
'ere of the opinion that more area could be brought under cultivation by
adopting subsurface drainage! Thus" it could be inferred that subsurface
drainage technology 'as socially acceptable in the area!
E.uity
The data presented in Table % indicated that resource-poor farmers had
benefited more from the public interventions than the resource-rich farmers!
The resource-poor farmers o'ned a major portion (?$ per cent* of the
reclaimed land" 'hile the resource-rich farmers had only 4$ per cent share in
the total reclaimed land! The land reclamation schemes by the government
had enabled the resource-poor farmers" 'ho 'ere hitherto agricultural
'orers" to become o'ners of better .uality land! Agricultural labour 'as
the main source of livelihood in the past due to degradation of their lands!
&ut" after reclamation" cultivation had once again become their primary
activity! Thus" schemes of land reclamation had a positive impact on the
income levels of resource-poor farm households and reduced ine.ualities
e0isting bet'een Jhaves/ and Jhave nots/!
Income Distribution
A perusal of Table ) revealed that there had been improvement in
income distribution on reclaimed farms! The share of bottom #$ per cent of
the farmers increased from #!4# per cent to %!4% per cent" registering a net
Table %! Particulars of beneficiaries of land reclamation in Tungabhadra Project
area
1ategory 2o! =arm siAe Area reclaimed
Investme
nt
(ha* (ha*
(in lah
+s*
+esource-rich (K # ha* 3 #!%# )!)$ $!)?
(#,* (4$*
+esource- poor (up to #
ha* 5? $!%5 4%!?5 4!)5
(?3* (?$*
Total %% - ,4!55 ,!,4
(#$$* (#$$*
2ote6 =igures 'ithin the parentheses indicate percentages to the total!
1hinnappa et al!6 Public Interventions for Amelioration of Soil
Degradation ,?,
Table )! Distribution of income among unreclaimed and
reclaimed farms of Tungabhadra project area
Decile 8nreclaimed farms +eclaimed farms
group Income
1umulativ
e Income
1umulativ
e
(+s-
ha*
percentag
e (+s-ha* percentage
of income of income
# 4%)?$ #!4# %,?%$ %!4%
4
##$>#
$ %!45 ##???5 ##!%?
,
44?%>
3 #$!3> 4$)%,# 4$!#4
5
,?4$5
5 #?!$5 4?55$4 43!3#
%
%333%
4 43!4? ,?5$3% ,3!54
)
3??$>
? ,3!4# 53,%#) 5)!#5
3
#$4%$
4$ 5?!5# %>34>, %?!4$
?
#,#,4
3# )4!$# 3$>??) )>!#3
>
#)?)5
%# 3>!), ?%4)4) ?,!$3
#$
4##33?
$ #$$!$$ #$4)43% #$$!$$
9ini ratio
$!,4$4
) $!#?4)?
increase of 5!$5 per cent! This trend 'as maintained in
all decile groups! It 'as a positive aspect of public
interventions in land improvement! It clearly
demonstrated that the ine.uity in distribution of income
decreased during post-reclamation period!
1onclusions
The cost on amelioration of irrigation-induced degraded
soils due to salinity and 'aterlogging at #>>>-4$$$ prices has
been found to be +s #%>>4 per ha" 'hich is too high for a
majority of small and marginal farm households of
Tungabhadra Project area! The provision of subsurface
drainage through public interventions has increased the
productivity of land appreciably (#)) per cent* and has
provided a source of regular income (+s #,"),)-ha from
paddy* to resource-poor house holds! The study has indicated
high potential of subsurface drainage technology in boosting
productivity and profitability of degraded soils! The
subsurface drainage technology has been found to be cost
effective" socially desirable and economically feasible! The
government should aim at encouraging and educating the
affected farmers in adopting subsurface drainage technology
on a large-scale!
+eferences
Datta" K!K! and 1! Dejong" (#>>3a* Economic and financial
feasibility of technological options for managing salt-affected
soils in the conte0t of the ne' economic policy" Indian ;ournal of
Agricultural Economics" %4 (5* 6 %,?!
,?5 Agricultural Economics +esearch +evie' :ol! 4$
;uly-December 4$$3
Datta" K!K! and 1! Dejong" (#>>3b* Economic
consideration of agricultural land drainage for
managing 'aterlogged and saline soils" Indian
;ournal of Agricultural Economics" %4 (4* 6 4)$-43$!
Datta" K!K! and 1! Dejong" (4$$$* +eclaiming salt-affected
land through drainage in
@aryana 6 A financial analysis" Agricultural Hater
Banagement" 5)6 %%-3#!
Datta" K!K! and 1! Dejong" (4$$4* Adverse effect of
'aterlogging and soil salinity on crop and land
productivity in 2orth-Hest region of @aryana"
Agricultural Hater Banagement" %3 (,* 6 44,-4,?!
Datta" K!K! and P!K! ;oshi" (#>>,* Problems and
prospects of co-operatives in managing degraded
lands 6 1ase of saline and 'aterlogged soils" The
Economic and Political Heely" 4? (#4 L #,* 6 A#)-
A45!
=A< (#>>$* Cand degradation in South Asia 6 Its severity
causes and effects on people! Horld Soil +esource
+eport" #-3?p!
9hassemi" =!A!" (#>>%* 9lobal SaliniAation of Cand and
Hater +esources" @uman 1auses" E0tent" and
Banagement" 1entre for +esource and
Environmental Studies" Australian 2ational
8niversity!
;oshi" P!K!" (#>?,* &enefit-cost analysis of alali land
reclamation technology- An e0-post evaluation"
Agricultural Situation in India" ,? (3* 6 5)3-53$!
;oshi" P!K! and A!K! Agnihotri" (#>?4* Impact of input
subsidy on income and e.uity under land
reclamation" Indian ;ournal Agricultural Economics"
,3 (, *6 4%,-4)$!
;oshi" P!K! and A!K! Agnihotri" (#>?5* An assessment of the
adverse effects of canal irrigation in India" Indian
;ournal of Agricultural Economics" ,> (3* 6 %4?-%,)!
;oshi" P!K!" <!P! Singh" K!:!9!K! +ao and K!2! Singh" (#>?3*
Sub-surface drainage for
salinity control 6 An economic analysis" Indian
;ournal Agricultural
Economics" 53 (4 *6 #>?-4$)!
;oshi" P!K! and 2!T! Singh" (#>>$* Economics of
rehabilitating alali soils of the Indo-gangetic plains"
Iojana" ,5 ()*6 4$-4,!
;oshi" P!K! and K!K! Dutta" (#>>%* Saline and 'aterlogged
soils 6 Impact on agricultural economy and feasibility of
reclamation" +eclamation and Banagement of
Haterlogged and Saline Soils! 1entral Soil Salinity
+esearch Institute" Karnal!