Importance of Irrigated Agriculture to the Ethiopian Economy: Capturing the direct net benefits of irrigation

Abstract

This study is an attempt to quantify the actual and expected contribution of irrigation to the Ethiopian economy for 2005/06 and 2009/10 cropping seasons using adjusted net gross margin analysis. After obtaining adjusted gross margin values for rain-fed and irrigation systems under different typologies, irrigation’s contribution was calculated to be about 5.7 and 2.5 percent to agricultural and overall GDP during the 2005/06 cropping season. By the year 2009/2010, irrigation’s contribution to agricultural and overall GDP is estimated to grow to about 9 and 3.7 percent, respectively. After relaxing some of the underlying assumptions, the future contribution of irrigation to agricultural GDP will rise to about 12 percent while the contribution to overall GDP will be about 4 percent. Recommendations for enhancing irrigation’s contribution and policy implications for cost recovery and sustainability of irrigation investment are drawn.