Degree

Master of Business Administration Executive

Faculty / School

School of Business Studies (SBS)

Year of Award

2023

Advisor/Supervisor

Dr. Heman Das Lohano, Professor and Program Director BS (Economics), Department of Economics

Project Type

MBA Executive Research Project

Access Type

Restricted Access

Keywords

Irrigation water pricing, Sindh irrigation system, Agricultural water use, Water Tax in Pakistan

Executive Summary

The Sindh Irrigation System is one of the fifth largest irrigation networks in the world and it is crucial in supporting agricultural activities, which are a major contributor to the regional economy. The revenue from Abiana Recovery (a water tax for supplying irrigation water to agricultural land) is significantly lower and it is one of the most critical water governance issues in Sindh province. Current abiana rates are as such that as it is not able to meet the expense/budget allocated for Maintenance and Repair (M&R) budget in Sindh Irrigation Department. This discrepancy is because the abiana/water rates, which were last set in 1999 and not updated since, are quite low, and based on flat-rate system. Addressing the revenue deficit can help in stimulating economic growth by ensuring the sustainability of agricultural practices, enhancing rural livelihoods, and protecting food security.

An analysis of the average annual abiana collection over four years (2018-19 to 2021-22, excluding 2022-23 due to it being a rain flood year) reveals that the combined collection by the Board of Revenue, Sindh and the Sindh Irrigation and Drainage Authority (SIDA) from the irrigation network of 14 main canal command (total canals in Sindh Province) is approximately Rs. 528.45 million. This amount is 8.5 times lower than the average annual maintenance and repair (M&R) expenditure of the last five years, which stands at Rs. 4,464.77 million. The current irrigation water fee is notably low and does not accurately reflect its true value. The objective of this research is to determine the optimal Abiana price by finding the actual economic worth of supplying irrigation water. The economic valuation of water is a complex phenomenon because of its social, economic, legal, and political aspects. The shadow price of irrigation water will be evaluated, treating it as an intermediate input in the production function. In this technique, the contribution of each crop production i.e., input to output will be considered to measure the residual value of irrigation water based on water productivity concept. This will demonstrate how much PKR value should be in actual in providing 1 cusecs of water to a land. Lastly, this study also aims to qualitatively assess if Abiana tax and determine of this economic value is feasible for meeting the Maintenance and Repair (M&R) budget of Sindh Irrigation Department.

The study has been mainly carried out in the region of Thatta, Sukkur, Mirpurkhas, Ghotki and Khairpur regions of Sindh, covering Guddu, Sukkur and Kotri barrage regions. With the main study crop being wheat, primary data is collected from framers and landowners of the specified area through questionnaires, in both the local tongue (Sindhi) and English. The questionnaire is mainly targeted towards the inputs that are required in the analysis comprising of, but not limited to, the land area, land quality, labor hours, seed, pesticides, water utilization and the use of fertilizers. The collected data is then utilized to run multiple regression analysis, with varying inputs to determine the marginal product price of water. The study is carried out on farm/plot level as well as area(acre) level. The marginal price of water thus calculated is then compared to the present abiana rates in Sindh. This provides a comprehensive analysis and comparison of the actual rates and the present economic values of the irrigation water in Sindh, showing that the average consumption of water by the wheat growing farmers is around 1264m3/acres and for this according to the abiana calculated they should pay about 1200Rs/acre in water tax, which is significantly higher than the current rate proposed by the Sindh government which is 106 Rs/acre.

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Pages

ix, 41

Notes

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