Smallholder Farmers' Willingness to Pay for Improved Access to Irrigation Water Supply in Egypt : a Contingent Valuation Approach

Abstract: The agriculture sector in Egypt is heavily dependent on the River Nile's water. However, the country is facing a severe water scarcity problem, affecting crop yields, farmers' income, food security, and the environment. To address this issue, recent irrigation projects require farmers to contribute financially to enhance the financial sustainability of the projects, improve water management practices, distribute the benefits more equitably, and increase the efficiency of water use. This study examined smallholder farmers' willingness to pay (WTP) for improved access to irrigation water supply, which has not been studied before in Egypt. A survey of 313 smallholder farmers was conducted using a double-bounded dichotomous choice contingent valuation method in the Nile Delta region's Fayoum province. The interval regression model was used to estimate the determinants of farmers' WTP and their mean WTP. The results indicated that farmers are willing to pay a significant amount of around 1230 Egyptian pounds (409 SEK) per feddan (roughly 0.42 hectares) per year for improved irrigation water supply. Factors such as attitudes towards improved irrigation supply, efficient irrigation practices and adoption of new technologies, and average income from agriculture have a significant positive influence on WTP. On the other hand, access to loans has a significant negative impact on WTP. The results have substantial implications for policymakers and other stakeholders as they provide a better understanding of the smallholder farmers' behavior, who play an important role in water use and agriculture production in Egypt. Furthermore, it offers realistic estimates to design and implement well-structured water pricing in the country.