Abstract:
The economic value of water is essential for rational allocation of scarce water resource as
its availability has become a problem in many countries of the world. Even though there are
four major water resources which could be suitable for irrigation purpose in Meskan district,
there is no well-constructed irrigation scheme and regulation. However, there was demand
for improved and sustained irrigation service in the area. The study was conducted in
Meskan district, Guraghe Zone, Southern Ethiopia with specific objectives; to estimate
farmers’ willingness to pay for improved irrigation water use and to identify determinants of
farmers’ willingness to pay for improved irrigation water use. The study was based on
primary data collected from 210 sample households selected through two-stage sampling
technique while it was also supplemented by secondary data. Double bounded dichotomous
choices with follow up open ended questions of contingent valuation methods were employed
to elicit farmers´ willingness to pay for improved irrigation water use. Both descriptive and
econometrics models were used for the analysis. Multiple linear regressions model was used
to identify the major determinants of farmers’ willingness to pay for improved irrigation
water use. Whereas seemingly unrelated bivariate probit model was used to estimate the
mean willingness to pay for improved irrigation water use. The result of multiple linear
regressions showed that households’ sex, age, educational level, credit use, distance to
market and irrigation scheme, and dissatisfaction with the existing irrigation scheme
significantly affected the willingness to pay for improved irrigation water use. On the other
hand, the result of the seemingly unrelated bivariate probit model from double bounded
dichotomous showed that households’ mean annual willingness to pay amount was Birr
3317.84 per hectare of irrigable land, while open ended format was to be 2906.20 birr per
hectare. The respective total aggregate value of improved irrigation water use in the study
varies from 33,421,300 birr in open ended to 38,155,160 birr from double bound. The result
of the contingent valuation survey revealed that all of the sample household heads have
shown their willingness to pay for improved irrigation water use. Therefore, as the result of
the study suggests good indicator for the concerned body to invest for expanding the current
irrigation projects and introducing proper irrigation water pricing, policy and program
intervention designed to implement improved irrigation water supply in the district should
take in to account factors determining households' willingness to pay
