Estimating the economic value and economic return of irrigation water as a sustainable water resource management mechanism

Estimating the economic value of irrigation water in monetary terms is a crucial water management tool to address water scarcity, shortage, and overuse problems. This study seeks to couple remote-sensing-based, biophysical water productivity with empirical economic valuation of water to estimate irrigation water's near real-time economic value and the gross return that farmers can earn from using the irrigation water. The study was done at the Koga large-scale community-managed irrigation scheme in the Blue Nile Basin, Ethiopia. Water productivity based on open sources remotely sensed data (WaPOR) datasets and Hedonic Pricing Method (HPM) were used to analyze near real-time crop water productivity (CWP), and determine irrigation water's economic value. Results showed that the average CWP was 1.08 kg/m(3). Farmers were willing to pay 0.074 US$/m(3), which ranged from 7.5 to 23.5% of their gross benefit from irrigation water. The study evidenced that coupling the remote-sensing-based CWP data with an empirical analysis of farmers' willingness to pay for irrigation water can generate an agreeable estimate of the economic value of irrigation water and showed the income generated from the irrigation business. Therefore, the method and result help to plan a suitable water pricing modality, which enhances sustainable irrigation management and water productivity.