Presented at the BFP Special session in the 13th World Water Congress, Montpelier, France

1. Identifying Water Poverty Links
Water-Poverty
At Plot Level
Lisa Bennett
i
Stephen Vosti
SFRB Team
Center for Natural
Resources Policy
Analysis -- CNRPA
September 2008 UCD/Embrapa

2. Presentation Overview
• Quick Overview of the SFRB
• Application of Land Use Systems Analysis
• Usefulness for Research
• Usefulness for Policy Guidance
UCD/Embrapa

3. Water Availability
UCD/Embrapa

4. Spatial
Distribution of
Rural Poverty
UCD/Embrapa

5. 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/Outcomes
• Inform Policy
• Modeling at Three Spatial Extents
– Plot-Level LUS Models
– Buriti Vermelho Models
– Basin-Wide Models
UCD/Embrapa

6. One Tool -- LUS Analysis
y
• Focus on Land Use Systems (LUS)
– Multi-year duration
– Different intermediate and end uses
• Estimate Economic Performance
– Discounted 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
– E.g., food security, labor requirements
• Highlight Institutional Impediments to LUS Adoption
• Compare Across LUS – Trade-Offs/Synergies
UCD/Embrapa

7. 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 end
technologies
date
– Annual time steps
– Multi year duration
Multi-year
– Different intermediate and end uses
Field #1
Year 1
Field #1
Year 2 Field #1
Year 3
Y Field #1
Year 4 Field #1
Year 10 Field #1
Year 15
UCD/Embrapa

8. Agriculture in the SFRB -- 1991
UCD/Embrapa

9. Agriculture in the SFRB -- 2004
São Francisco River Basin Harvested Specialty
Harvested Grains Crops, 2004
2004
Petrolina
Harvested Area (ha) Harvested Area (ha)
at Município Level at Município Level
None None
1 - 2,000 1 - 2,500
Montes Claros 2,001 - 5,000 2,501 - 10,000
5,001 - 10,000 10,001 - 50,000
10,001 - 20,000 50,001 - 200,000
20,001 - 431,441 200,001 - 401,980
Sete Lagoas Scale 1:9,000,000
Ribeirao das Neves 0 50 100 200 300
Belo Horizonte
Betim Kilometers
Divinopolis
Lambert Azimuthal Equal Area
Projection, WGS-84.
Map by J A Young, 12 September 2007
UCD/Embrapa

10. LUS Under Evaluation in
Petrolina
• S ll S l G t/Sh
Small-Scale Goat/Sheep Production
P d ti
– 46 hectares, rainfed, low-tech, some fodder
• Mango Production – Flood Irrigation
– 4 hectares, two years annual crop production
• Mango Production – Micro-sprinkler
g
Irrigation
– 4 hectares, two years annual crop production
UCD/Embrapa

11. Assessment of Small-Scale
Goat/Sheep LUS
Labor Requirements
Economic Performance Total Family
y
Ratio of Wage Labor Used
Rate paid to
NPV of the Excess that Sets NPV (both
NPV of the Returns to Family Labor Establish- Operational
LUS per Returns to to Zero to Establishment
LUS Land that sets NPV ment Phase
hectare Family Labor Wage for Day and
to Zero
Labor Operational
$R/ person- $R/ person- Phase)
Ph )
$R $R/ha day $R/ha/year day person-
-12 0 0 0 16.99 1.00 person- days/ha/ person-days/
days/ha year ha/year
70 6.3 7.8
Water for Irrigation
Cost of Cost of Water Employment
Water
Establishing Establishing Productivity
Operational Productivity
Irrigation Irrigation Water Use Operational Phase
Costs
System on System on (kg produced/ (Contracted Labor)
(NPV/ 1000m³)
the Property the LUS Plot 1000m³)
person-days/ha/year
0
1000M3/
$R $R/ha $R/ha/year ha/year $R/ 1000m³ kg/ 1000m³
0 0 5.5 4 0.00 14.20
UCD/Embrapa

12. Assessment of Small-Scale Irrigated
Mango LUS – Flood Irrigation
Economic Performance Labor Requirements
Ratio of Operational
Rate paid Establishment Total Family
Excess Wage that Phase (Family
NPV of the to Family (Family Labor Labor Used
NPV of the Returns to Returns to Sets NPV Labor and
LUS per Labor that and Contracted (Operational
LUS Family Land to Zero to Contracted
hectare sets NPV Labor) Phase)
Labor Wage for Labor)
to Zero
Day
Da Labor
$R/ person- $R/ha $R/
Person-days person-days/
$R $R/ha day /year person-day
Person-days /ha /ha/year ha/ year
2,512 628 1 31 18.70 1.10
35 138 45
Water for Irrigation Employment
Operational
Cost of Cost of Phase
Water
Establishing Establishing Water (Contracted
Operational Productivity
Irrigation Irrigation Water Use Productivity Labor)
Costs (kg produced/
System on the System on the (NPV/ 1000m³)
1000m³)
Property Plot
person-days/ha/
year
1000M3/
93
$R $R/ ha $R/ha/ano ha/year $R/ 1000m³ kg/ 1000m³
553 138 1,177 8.64 2.50 1,424 UCD/Embrapa

13. Assessment of Small-Scale Irrigated
Mango LUS – Micro Sprinklers
Economic Performance Labor Requirements
Ratio of
Rate paid to Operational
Wage that
g Establishme
NPV of the Excess Family Phase Total Family
Returns to Sets NPV to nt (Family
NPV of the LUS LUS per Returns to Labor that (Family Labor Used
Land Zero to Wage Labor and
hectare Family Labor sets NPV to Labor and (Operational
for Day Contracted
Zero Contracted Phase)
Labor Labor)
Labor)
$R/ person- $R/ person-
$R $R/ha day $R/ha /year day
Person-daysPerson-days person-days/ ha/
2,897 724 1 36 19.10 1.21 /ha /ha year
44 100 32
Water for Irrigation
Cost of Cost of Water Employment
Water
Establishing Establishing Productivity
Operational Productivity Operational
Irrigation Irrigation Water Use
Costs (kg produced/ Phase
System on System on (NPV/
1000m³) (Contracted
the Property the Plot 1000m³)
Labor)
$R $R/ ha $R/ha/ano 1000M3/ ha/year $R/ 1000m³ kg/ 1000m³ person-days/ha/
4,212 1,053 973 6.3 6 1,811 year
69
UCD/Embrapa

14. Cross-LUS Comparisons
LUS Economic Performance Labor Requirements Water for Irrigation Employment
NPV of Zero-
Operational
NPV the Profit Opera- Establish- Establish- Opera-
Returns Establish- Water Water Phase
of the LUS Wage to tional ment Costs ment Costs tional
to Land ment Use Productivity (Contracted
LUS per Market Phase on Farm on Plot Costs
Labor)
hectare Wage
$R/ha Person- Person- $R/ha/ 1000M3/ NPV (R$)/ person-
$R $R/ha /year ratio days /ha days /ha $R $R/ ha yr ha/year 1000m³ days/ha/ year
Goats and
Sheep -12 0 0 1 70 6.3 0 0 5.5 4 0 0
Mangos --
g
flood
irrigation 2,512 628 31 1.10 35 138 553 138 1,177 8.64 2.50 93
Mangos --
micro
sprinkler 2,897 724 36 1.21 44 100 4,212 1,053 973 6.3 6 69
UCD/Embrapa

15. Effects of Uncertainty and Risk
Effects f Mortality Uncertainty
Eff t of M t lit U t i t
on NPV per Year
Effect of uncertainty in output prices
for mangoes on NPV per year
UCD/Embrapa

16. Conclusions and Policy Implications
• Irrigation-Led Intensification:
Irrigation Led
– Can increase farm profits
– Can increase water productivity
– Requires investment capital
– Can reduce on-farm employment
p y
• None of these LUS Can Lift a Family of 4
y
Out of Poverty
• Asset Poverty
– Financial capital
p
– Family labor
UCD/Embrapa

17. Benefits to Researchers
• Quick and Easy
• F ilit t Interdisciplinary Interaction
Facilitates I t di i li I t ti
• Help Non-Economists Speak ‘Policy’
– P t an economics overlay on biophysical processes
Puts i l bi h i l
– Provides quantitative estimates of key variables
• Allows for Introducing Uncertainty and
Assessing Risk
• Help Assess the Effects of Policy Changes and
Public Investments
– Water price p y
p policy
– Technological change
UCD/Embrapa

18. Muito Obrigado!
UCD/Embrapa