Strategic Policy Options to Improve Irrigation Water Allocation Efficiency: Analysis on Egypt and Morocco

regions using LSI and PRI irrigation systems and government revenue from each scenario in
these regions are presented.

The irrigation policy goals of Morocco are 1) to allocate irrigation water from low profit
crop production to more profitable crops, such as fruits and vegetables, and 2) to collect revenue
in order to meet the M&O costs and investment needed for supplying more irrigation water to
balance increasing demand.

Scenario design for Morocco

Three policy scenarios for Morocco were simulated using the Moroccan Agricultural
Sector Model (MASM) (Doukkali): 1) a water pricing scenario, 2) a tax on energy use for
pumping; and 3) an output tax on cereals and industrial crops. Table 4 describes the policy
scenarios for Morocco.

The water pricing scenario increases the base water tariff to its cost recovery level for
regions using water from large scale irrigation systems (Table 5). Historically, improvement of
the recovery rate of the water fee has had positive aspects with respect to the objectives of
financial viability, economic effectiveness, and equity. From the institutional perspective, this
scenario approximates Morocco’s anticipated future water tariff system.

An energy tax for pumping lies in the category of taxes on water complementary input
factors. Taxes on N-fertilizer and pesticide are not tested for the Morocco case because these
inputs are used both on irrigated land and in rain-fed production. There is no realistic way to tax
these inputs only for irrigation production.

Output taxes are equivalent to a price reduction on certain crops. Output taxes are levied
on cereal crops and industrial crops grown in LSI land. Among all the crops cultivated on LSI
land, durum wheat uses about 8.3% of total water demand, while bread wheat uses about 16.5%

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