Lecture 7 - Farmers’ willingness to pay for treated wastewater in the Jordan valley
Lecturer:
Dr. Amani Alfarra, water management
Land and water division
Food and Agricultural Organization of the United Nations
Rome, Italy
amani.alfarra@fao.org
This lecture investigates the potential use of treated wastewater (TWW) in the agricultural sector as a key scenario to reduce the strain on water resources. Jordan Valley (JV), is an important regional supplier of crops and vegetables, where much of the freshwater resources are consumed. A stratification sample based on location, crop, and the water quality of 401 farmers was asked if they would accept TWW, their willingness to pay (WTP) and the reasons behind these decisions. Almost all the farmers accept TWW and more than 55 % of the farmers are willing to pay more than five times the price of fresh water. An ordered logit model for the entire sample shows that higher farm profits increase the bids while concern about water tariff is the second highest factor that influences farmers’ decision. Yet, overall model results were weak and separate models for the Northern, Middle and Southern regions of the JV have a larger predictive power and present better-hit ratios. The results indicate that it is recommended to implement site-specific pricing and extension programs when the use of TWW is introduced or further expanded in the JV.
Also, we simulated various pricing regimes for four archetypes of farming systems considering nutrients in TWW for its cost-saving effects on fertilizers and crop-specific effect of salinity. The results show that additional TWW volume increases farmer incomes considerably and while fertilizer costs could be saved saline TWW levels affect citrus and banana production negatively. We also found that it is difficult to cover the costs of new TWW plants and sewage infrastructure with farmer contributions alone. The conclusion was that there are good prospects for further agricultural development in the JV when the use of TWW in Jordan is expanded. A gradual increase in farmer contributions seems justified as additional profits per water volume outweigh the increase in costs by far.
A practical assignment versus the students in collections cross-validation and processing of data on the WTP for treated wastewater.
Presentation:
Practical: