UNIVERSITI PUTRA MALAYSIA

THE ECONOMICS OF CENTRAL LUZON DRY SEASON IRRIGATION SCHEME

Gaspar Britania Bimbao

FEP 1984 2

It is hereby certified that we have read this thesis

entitled "The Economics of Central Luzon Dry Season

Irrigation Scheme" by Gaspar Britania Bimbao, and in our

opinion it is satisfactory in terms of scope, quality and

presentation as partial fulfilmen t of the requirements

of the degree of Master of Science.

P. ZAINUDDIN, Ph.D.

Associate Professor/Dean of Graduate Studies

Universiti Pertanian Malaysia

(Chairman Board of Examiners)

�.VL. J.C. FLINN, Ph.D.

Agricultural Economist & Head, Department of Agricultural Economics,

The International Rice Research Institute,

PHILIPPINES.

(External Examiner)

E.T. GIBBONS, Ph.P. Professor,

Faculty of Resource Economics and Agribusiness, Universiti Pertanian Malaysia.

(Internal Examiner)

IN, Ph.D.

Associate Professor & Dean,

Faculty of Resource Economics and Agribusiness,

Universiti Pertanian Malaysia.

(Internal Examiner & Supervisor)

This thesis was submitted to the Senate of Universiti Pertanian Malaysia and was accepted as partial f�lfilment of the requirements for the degree of Master of Science.

July 1984

A���ate Professor/ Dean of Graduate Studies

THE ECONOMICS OF CENTRAL LUZON DRY SEASON IRRIGATION SCHEME

Gaspar Britania Bimbao

A thesis submitted in partial fulfillment

of the requirements for the Degree of Master of Science (Resource Economics) in the

Universiti Pertanian Malaysia

1984

ACKNOWLEDGEMENTS

The author acknowledges with profound appreciation and sincere

gratitude the kind assistance rendered by the following persons and

institutions:-

UNIVESITI PERTANIAN MALAYSIA:

Dr. Mohd. Ariff bin Hussein

Prof. Eric T. Gibbons

Dr. Mohd. Ghazali bin Mohayiddin

AGRICULTURAL DEVELOPMENT COUNCIL, INC.:

Mr. Gerard Rixhon and Staff

CENTRAL PHILIPPINE UNIVERSITY:

Prof. Enrique S. Altis

Mr. Ricardo Patricio

INTERNATIONAL RICE RESEARCH INSTITUTE:

Dr. Robert W. Herdt

Mr. Domingo F. Tabbal

Mr. Geronimo Dozina, Jr.

Ms. Linda Bantillan-Gloria

National Irrigation Administration:

Engr. Ernesto Frayna and Staff

Dr. Syed H amid Syed Aljunid

Prof. Ahmad Mahdzan Ayob

Dr. Mat Yusoff bin Abdullah

Dr. Agustin A. Pulido

Mr. Ernesto Elefan

Dr. Sadiqul I. Bhuiyan

Ms. Mariquita Lopez-Sipin

Ms. Leila Herbano

Ms. Peidad Moya

UNIVERSITY OF THE PHILIPPINES AT LOS BANOS:

Dr. Tirso Paris Dr. Gerald Nelson

CDEM Librarian and Staff

All views expressed and any errors of factual interpretations

are those of the author. Apology is offered to anyone whom the author

may have inadvertently omitted.

iii

TABLE OF CONTENTS

Page

ACKNOWLEDGEMENTS

LIST OF TABLES

ii

vii

LIST OF FIGURES x

ABSTRACT

ABSTRAK

CHAPTER

xi

xiii

I. INTRODUCTION

The Problem

The Objectives

Organisation of the Thesis

II. CAMRIS SOCIO-ENGINEERING BACKGROUND

6

8

9

The CamRIS Area 10

Factors Affecting Water Sharing and Distribution in CamRIS 13

Socio-physical Factors Motivating the Con-struction of Illegal Turnouts 13

Design Parameters Affecting Water Distribution 15

III. REVIEW OF RELATED LITERATURE

Benefits from Irrigation 19

Measures of Relative Income Inequality 25

Factors Affecting Extent of Dry Season Irrigated Paddy Cultivation 26

IV. METHOOOLOGY

Conceptual Framework

Analytical Framework

Area Planted, Yield, Production and Cropping

29

34

Intensity 34

Level of Resource Utilisation

Level and Distribution of Income

Paddy Production Model

Determination of Resource Use Efficiency

Area Determination Model

Survey Design and Data Collection

Limitations of the Study

V. RESULTS AND INTERPRETATIONS

Ef fects of the Scheme on Mean Area Planted and

37

39

43

50

51

56

59

Yield 60

Effects of the Scheme on the Total Area Cultivated and Total Production 70

Effects of the Scheme on Cropping Intensity 77

Impact of the Scheme on Utilisation of Selected Farm Inputs 79

Chemical Inputs 80

Material Inputs 83

Labour Inputs 83

Impact of the Scheme on Paddy Income 84

Impact of the Scheme on Income Distribution 87

Impact of the Scheme on Production Funtion and Resource Use Efficiency of Selected Farm Inputs 95

Production Function Analysis 95

v

Resource Use Efficiency Analysis 98

Determinants of the Extent of Paddy Cultivation Under the Scheme 102

VI. SUMMARY AND CONCLUSION

Policy Recommendations

Further Research

LITERATURE CITED

APPENDICES

vi

III

113

114

120

LIST OF TABLES

Table Page

l. Mean area planted and yield of farmers by sections and by cropp ings, CamRIS, dry season 1978 and 1980 61

2. Mean area planted and yield of farmers by sections and by croppings, CamRIS, dry season 1979 and 1981 63

3. Mean area planted and yield of farmers by sections and by croppings, CamRIS, dry season 1978/1979 and 1980/1981 64

4. Mean area planted among the different section, CamRIS, dry season 1978-1981 66

5. Mean area planted among the different section, CamRIS, dry seasons 1978/1979 and 1980/1981 68

6. Yield per hectare among the different sections, CamRIS, dry seasons 1978-1981 69

7. Yield per hectare among the different sections, CamRIS, dry season 1978/1979 and 1980/1981 69

8. Total area planted and production by sections and by croppings, CamRIS, dry season 1978 71

9. Total area planted and production by sections and by croppins, CamRIS, dry season 1979 72

10. Total area planted and production by sections and by croppings, CamRIS, dry season 1980 74

11. Total area planted and production by sections and by croppings, CamRIS, dry season 1981 76

12. Total area planted and cropping intensity of farmers by sections and by croppings, CamRIS, crop year 1978-1981 78

13. A two-year comparison of selected inputs used by CamRIS farmer s , dry season 1979 and 1981 (Pesos per hectare ) 81

14. A two-year comparison of selected inputs used by farmers , by sections , CamRIS , dry season 1979 and 1981 ( Pesos per hectare ) 82

15. A two-year income comparison of farmers, CamRIS, dry season 1979 and 1981 ( Pesos per hectare) 85

16. A two-year income comparison of farmers by sections , CamRIS , dry season 1979 and 1981 ( Pesos per hectare ) 86

17. The distribution of net income per farm , CamRIS , crop

18.

19.

20.

21.

years 1978/1979 and 1980/1981 88

The distribution of net income per farm , CamRIS , crop year 1978-1981 91

The distribution of net income per farm , upstream , CamRIS , crop year 1978-1981 92

The distr ibution of net income per farm , midstream , CamRIS crop year 1978-1981 93

The distribution of net income per farm , downstream, crop year 1978-1981 94

22. Estimates of production function for paddy , CamRIS , dry seasons 1979 and 1981 96

23. Geometric means of selected farm inputs and output , CamRIS , dry season 1979 and 1981 99

24. Marginal value product of inputs at their geometric mean level s , CamRIS , dry seasons 1979 and 1981 100

25. The average market price of per unit of input and output , CamRIS, dry season 1979 and 1981 100

viii

26. Ratios of marginal value products to factor costs, CamRIS, dry seasons 1979 and 1981 101

27. Estimates of area determination function for paddy, CamRIS, dry season 1981 103

ix

LIST OF FIGURES

Figure Page

1 . Distribution of Irrigation Schemes in the Philippines and the Study Area 2

2. The Camiling River Irrigation System 7

3. Hypothetical Total Product Curves of Input X Under the Unimproved and Improved Dry Season Irrigation System Managment 31

4. Schematic Diagram Showing How Increased Paddy Production can be Achieved, Particularly in the Dry Season, by Im-proving the Irrigation System Management 32

5. The Lorenz Curve 41

6. Lorenz Curves Showing Distribution of Income Among Six Income Classes 90

Abstract of thesis presented to the Senate of Universiti Pertanian Malaysia in partial fulfillment of the requirements for the Degree of

Master of Science

THE ECONOMICS OF CENTRAL LUZON DRY SEASON IRRIGATION SCHEME

By

Gaspar B. Bimbao

July, 1984

Supervisor: Mohd. Ariff bin Hussein, Ph.D.

Faculty Resource Economics and Agribusiness

This study was undertaken to evaluate the impact of Camiling

River Irrigation System (CamRIS) in Central Luzon, Philippines on the

total dry season paddy production, the resource use efficiency, the

level and distribution of paddy incomes; and to examine the factors

which determined the extent of paddy cultivation by farmers under the

scheme.

Results of the study revealed that the mean area cultivated and

yield per hectare increased significantly under the scheme, hence,

the total area planted, production and cropping intensity.

Nevertheless, the scheme failed to reduce the variability of these

factors among the various sections of CamRIS.

Farmers considered seeds, hired labour and total labour among

other inputs of utmost importance in attaining higher paddy production

under the scheme as only in these inputs that expenditure per hectare

significantly increased. Nevertheless, the paddy net income before

and after the scheme were not significantly different. In addition,

the scheme failed to reduce income inequality among the

farmer-participants as depicted by their almost identical Lorenz

curves before and after the scheme and corroborated by the equal

values of their Gini coefficients of 0 . 47.

Resource use efficiency analysis revealed that expenditures on

seeds and family labour were adjusted to their optimum values after

the scheme . In contrast to fertilizers which were allocated

efficiently before and after the scheme , expenditure allocations on

chemical inputs for crop protection and hired labour were inefficient

as indicated by their ratios of marginal value products to factor

costs which were significantly less than unity. Thus , reducing the

allocation of these inputs would have increased- their production

efficiencies .

Regression analysis showed that the profitability of dry season

irrigated farming and the availability of famil y and hired labour were

the major determinants the in farmers' decision to increase paddy

cultivation under the scheme . On the other hand , working capital

carried forward from the wet season , tenure status , non-mechanisation

of land preparation were factors that worked against the farmers to

increase their paddy cultivation.

xii

Abstrak tesis yang diserahkan kepada Senat Universiti Pertanian Malaysia sebagai memenuhi sebahagian dari syarat untuk keperluan ijazah

Sains Master

EKONOMI SKIM PENGAIRAN MUSIM KERING DI LUZON TENGAH

Oleh

Gaspar B . Bimbao

Penyelia : Mohd . Ariff bin Hussein , Ph . D.

Fakulti : Ekonomi Sumber dan Perniagaantani

Kajian ini dibuat un tuk menilai kesan Sistem Pengairan Sungai

Camiling (CamRIS) ke atas jumlah pengeluaran padi musim kering ,

kecekapan penggunaan dan aras serta pengagihan pendapatan padi di

Luzon Tengah , Filipina . Faktor-faktor yang menentukan sejauh manakah

penanaman padi dijalankan oleh petani-petani di bawah skim itu juga

diselidik dalam kajian ini.

Keputusan yang diperolehi daripada kajian ini menun jukkan min

kawasan yang ditanan dan hasil sehektar menambah secara bererti di

bawah skim itu . Ini bermakna berlakunya penambahan jumlah kawasan

penanaman, pengeluaran dan juga intensiti penghasilan . Walaubagai-

manapun , skim itu juga gagal mengurangkan variabiliti berkenaan dengan

faktor-faktor yang tersebut di atas di beberapa kawasan CamRIS .

Petani-petani menganggap input-input seperti biji-biji benih ,

buruh upahan dan jumlah buruh adalah di antara yang paling mustahak

untuk mencapai pengeluaran padi yang lebih tinggi di bawah skim itu

sebab perbelan jaan sehektar telah meningkat secara bererti untuk

input-input ini sahaja . Walaupun sedemikian , pendapatan bersih padi

sebelum dan selepas skim itu tidak memberi perbezaan yang bererti .

Tambahan pula , skim itu gagal mengurangkan ketidaksamaan pendapatan di

kalangan petani-petani yang mengambil bahagian di bawah skim itu. Ini

boleh ditunjukkan oleh keluk-keluk Loren z yang hampi r sarna sebelum dan

sele pas skim itu serta nilai-nilai koefisyen Gini yang sarna , iaitu ,

0.47.

Analisis kecekapan penggunaan sumber menunjukkan bahawa

perbelan jaan- perbelan jaan ke atas bi ji-bi ji benih dan buruh keluarga

telah diubahsuaikan untuk mencapai nilai optimum selepas skim itu .

Pertentangan dengan baja-baja yang telah diperuntukkan , perbelan jaan ke

atas input-input kimia untuk pemeliharaan tanaman dan buruh upahan

adalah tidak cekap. Ini telah ditun jukkan secara bererti oleh

nisbah-nisbah nilai keluaran sut dengan kos-kos faktor yang kuran g

daripada satu . Oleh yang demikian , pengurangan dalam peruntu­

kan input-input ini mungkin akan meningkatkan kecekapan pengeluaran

mereka .

Analisis regresi pula menun jukkan bahawa keberuntungan

penanaman dengan cara pengairan musim kering dan buruh upahan serta

buruh keluarga yang sedia ada merupakan perkara-perkara yang penting

bagi pihak petani-petani untuk menentukan penambahan penanaman padi di

bawah skim itu. Disebaliknya , modal kerja yang dibawa dari musim

basah, taraf hakmilik tanah serta persiapan tanah tanpa bantuan

jentera adalah faktor-faktor yang menghalang petani-petani dalam usaha

mereka untuk menambahkan penanaman padi.

XlV

CHAPTER I INTRODUCTION

The Philippines ( Figure 1 ) , like many other countries in South

and South-East Asia , considers irrigation to be a key factor in

attaining self-sufficiency in food grains . Irrigation in the country

can be classified into three major categories : ( 1) national gravity ,

( 2) communal gravity , and ( 3 ) pump. A total of 919 , 461 hectares were

irrigated by the systems ; 37 per cent by national systems; 47 per cent

by communal , and 16 per cent by pump systems in 1978 (Moya et al . ,

1980) . About 67 per cent ( 5 . 2 million metric tonnes) of the total

paddy production ( 7 . 7 million metric tonnes) is produced under

irrigation .

Massive investments have been made in irrigation development in

the country . The total investment for the 1978-87 is expected to be

P14 . 34 billion (U . S . $1 . 91 bi llion). An additional , P6 . 05 billion

(U . S . $0 . 81 billion) is due to be invested during the 1988-2000 . At

the above rates , the average cost per hectare irrigated annually is

P10 , 315 (U . S . $1 , 375) for the 1978-87 and P15, 370 ( U . S . $2 , 409) over

the 1988-2000 period ( Capule , 1980) .

Although considerable investment has been committed to

infrastructural development and other management programmes , the

problem of achieving equitable and efficient irrigation performance

remains. In most gravity ir:igation systems in the Philippines ,

irrigation water is al located and distributed to different irrigation

blocks through the continuous method with minimal control from the

source . Water is thus supplied Simultaneously to all fields of a

.­ ' - . "- ' -, _ ........ . ( ) PANqASINAN ;

tt· ..... ,. ,. J • . I , .

. -....... _. \

I I TARLAC

I \..

'-. ._'-. ..J , . .... " ZAMBAL&s'· _. / '\" . ..,..-(') PA,t\PAN GA )

, .

i

o &50 ;00 t(lll�S �I --------�I�--------��

2

("" . ./ �

o +00 '00 klU).--, T£Il& �I ZAL.

\

Figure 1. D i stribution of Irri gation Schemes in the Phi l ippines and the Study Area

3

particular system.

Four important consequences can arise from this method of water

allocation and distribution (Wickham , 1971 ; Tabbal and Wickham , 1976;

Valera and Wickham , 1976; Moya and Early , 1981 ) . Firstly , inequitable

and inefficient distribution of water occurs along the length of the

supply canal . Over-irrigation is usually experienced in the upper

reaches and under-irrigation in the lower reaches . The problem of

inequitable distribution in most gravity systems in the Philippines is

associated with the irrigation structures needed for water control

and effective distribution . Canals are usually heavily silted and

overgrown with thick vegetation , embankments are constructed below

standard and the structure outlets are seriously eroded . Outlet

channels ( turnouts) are mostly ungated and they have no control over

measuring devices . Farm irrigation and drainage ditches for the

movement of the optimal volume of water to the farm plots at the

proper time , are generally insufficient and very often are absent

(Miranda , 1975) . Consequently , there is a delay o f u p to 3 0 days

between the date when water is first released until the time it

reaches the last farm plot ( Early et al. , 1978) . As the distance

involved varies between 5 kilometres to 20 kilometres , the last factor

mentioned is critical from such standpoints as evaporation and

schistosomiasis.

1 . Schistosomiasis ( Bilharzia) is a very serious disease for human beings in some parts of the Philippines which is transmitted by water-borne snails . The snails multiply when host waters are warm and slow moving . The disease is easily obtained from drinking or even washing or bathing in slow-moving water with carrier snails .

4

Secondly, farmers in the lower reaches interfere in the ope-

ration and management to seize illicitly what they consider to be their

water share . They do this by checking canal flows, breaking embank-

ments, closing and opening turnout gates at will, and tampering with

devices such as the check structure and diversion boxes . These

behaviours are found to be posi tively associated with the distance from

the water source (Moya and Early, 1980) . Farmers most distant from

the source usually engage in these activities because they want to

obtain sufficient water in the shortest possible time . There is

little evidence of of ficial control and coordination of water supply

scheme or part of the conveyance network and other aspect of the

system, especially under conditions of water shortage.

Thirdly, as flood control is not practised in most systems in

the country, paddy yield per hectare attained by farmer-participants

are less than the potential, frequently by as much as 30 to 60 per

cent.

Fourthly, most systems operate at low irrigation efficiency, be-

ing far less than the efficiency in a surface irrigation . In general,

on-farm water-use efficiencies range from 30 to 38 per cent even in

areas with adequate supply . About 62 per cent of the total water

supply during the wet season and 32 per cent in the dry season are

wasted as surface drainage (Wickham, 1971) .

2 . Water-use efficiency is defined as crop yield per unit of water use (Stewart, 1979) .

5

The above problems of water allocation and distribution have

been well-documented and evidence shows that the efficiencies of water

utilisation can be improved substantially wi th better management of the

system (Greenland and Bhuiyan, 1980) . Greater water-use efficiency

will result in both higher and more stable yields per hectare on pre-

viously cropped area , an increase in the cropped area under paddy

production , or both over the system . The increase in yield is made

possible either because of reduced water stress days , increased use of

complementary inputs e. g . , fertilizer , or better timeliness of planting

and other cultivations. An improved system of management means more

water would be available to farmers to expand their land cultivation

( Small et al . , 1980) . Improvement in management are also likely to

reduce the variability in yields among the different blocks of the

system, thereby spreading the benefits of irrigation less unequally

among the farmers concerned .

In an attempt to alleviate the above problems and to improve

the management of gravity systems , two joint projects were initiated

by the National Irrigation Administration (NIA ) and the International

Rice Research Institute ( IRRI ) in 1978. The general purposes of

3 . Water stress days are defined as the number of observation paddy is not flooded or without standing practice is to exclude 2-3 days when a field wi thout the number of stress days .

days a water . water in

field or A standard

counting

4 . Gravity system usually include an obstructing barrage on the river to raise the elevation of water as well as diversion and canal networks to serve the low lying command area by gravity flow (Miranda, 1 975) . There are two types of gravity systems : ( 1 ) run-of-the-river and ( 2) reservoir. The former has low weir-type dam and unlike the lat ter has no means of water storage .

6

these projects were: (1) to increase knowledge about the requirements

for improved water management , ( 2 ) to modify the management of the

main systems in order to obtain better balance between water deliveries

and water demands, and ( 3 ) to study and evaluate the results of the

efforts to change the system management . One of the sites for the

projects is the Camiling River I rrigation System (CamRIS) , Tarlac ,

Central Luzon , Philippines , the area of this study .

The Problem

Improving irrigation management in CamRIS (Figure 2 ) involves

determining the optimal location and timing of irrigation and then

allocating and distributing the water to the target areas . The

present scheme of allocation and distribution of irrigation supply

in CamRIS raises acute problems of equity and productivity . Rural

inequality which traditionally is associated with differing sizes of

land holdings rather than accessibility of farm inputs such as

irrigation water , does not necessarily hold true when a farmer with

access to irrigation is able to crop his land at least twice a year

than another farmer relying only on one irrigation. Given that the

attainment of increased food production is a major objective , any

remedial measures have to strike a balance between equity to

individual small holder and the total productivity from the scheme as a

whole .

5. "Scheme" refers to improved dry season irrigation management in CamRIS.

o �f\tSn Dom _ 1M in C(inal

- �o14rOI Sl.'blQttr(11 - . - �o\l.,/\dary p( ----L- rQO r

� '�(.r / Creek. e f-Io�� aral)S

Cornmond

o \2�O ,SOO 1150 l.OOO I

Figure 2 . The Camiling River Irrigation System

7

8

Some pressing questions arise from the issues of equity and

productivity resulting from

scheme in CamRIS . Firstly ,

the present allocation and distribution

will the scheme lead to higher paddy

yield , production , area cultivated and cropping intensity? Secondl y ,

will the scheme increase dry season input use for paddy produc tion?

Has it resulted in greater income from dry season paddy production in

the whole system? Thirdly , will the scheme reduce income inequality

among farmer-participants? Lastly , what are the limiting factors ,

both economic and non-economic , to the extent of paddy cultivation in

dry season irrigated farming under the scheme?

The Objectives

The chief objectives of this study of CamRIS were to evaluate

the scheme's impact on the level of production , productivity and

efficiency of selected farm inputs ; the level and distribution of farm

incomes; and lastly , to examine the factors which determine the extent

of paddy cul tivation by farmers in dry season irrigated farming under

the scheme.

The specific objectives were :

(1) to estimate the dry season's net increase ( or decrease) in

paddy yield per hectare of farmers and total paddy pro­

duc tion in CamRIS after the scheme's inception;

( 2) to calculate the dry season's net increase (or decrease )

in mean area planted with paddy , total area cultivated

and cropping intensity of farmers in CamRIS after the

scheme ;