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

Conclusions and Policy Implication

This research intended to provide a better understanding of alternative irrigation policies
compared to water pricing by examining irrigation policy options for Egypt and Morocco. The
profiles of the countries used in this analysis are considerably different. Egypt is a country
characterized by irrigated agriculture for most of its land. Morocco is representative of countries
who use mainly rain-fed land for agriculture with a tendency of increasing irrigated land. The
analysis confirmed the effectiveness of alternative irrigation policy options in Egypt. For the
purpose of reducing irrigation water demand, conserving water, and meeting the financial
scarcity of irrigation development and promotion of water saving technology, using high water
shadow pricing should not be an automatic policy response. Rather, it may be appropriate to find
alternative ways: 1) output tax on rice and sugar cane could be used to reduce irrigation water
demand on these two crops. This would promote cultivation of less water-intensive but more
profitable crops such as sugar beet and other vegetables; 2) a very high tax on N-fertilizer and
energy may not be possible at the present time. However, these policies demonstrated positive
impacts and potential in directing the cropping pattern towards more profitable ones, such as
lentils and vegetables. In the long run, increasing of N-fertilizer and energy taxes could be
considered as a supplementary policy for Egypt for adjusting irrigation water application; 3)
alternative policies could also be effective in terms of generating revenue for government or
irrigation administration. If cost recovery water pricing or higher price levels can not be
implemented in Egypt, lower levels on water complementary input factors taxes and output tax
policy can meet this goal as well. However, output taxes may not be able to work on this purpose
if it takes the form of reducing subsidies on sugar cane and paddy rice.

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