Agriculture Reference
In-Depth Information
reduces their economic value and productivity annually (Lund, 1989). The
annual capital costs of the irrigation facilities are estimated using a discount
rate based on the National Central Bank discount rate of December 2007
(Ghana - 13.5%/yr and Burkina Faso - 4.25%/yr, CIA - The World
Factbook, 2009). The economic lifetime of small reservoirs is chosen as 25
years based on the fact that many of the reservoirs that were constructed in
the 1950s, 1960s and 1970s in the Upper East Region of Ghana were non-
functional by the 1980s and had to be rehabilitated in the 1990s by the
World Bank and FAO. The economic lifetime of the large reservoir was
chosen as 50 years based on the design life of the reservoir and that of the
remaining technologies were obtained from field interviews.
The annuity factor, a, was determined from the following equation:
 
  1
n
i a (Equation 6.1)
1
i
n
1
i
where i is the discount rate and n is the economic life (years).
The annual capital cost or depreciation is then calculated by multiplying the
investment cost with the annuity factor a . The sum of the annual
maintenance cost, annual depreciation cost and the operating and
maintenance cost of the facility gives the total annual expenditure on
irrigation water by the technology (Grant et al., 1990).
Table 6.2 shows that the small and large reservoir are the most expensive
technologies in terms of investment, operation and maintenance of irrigation
water infrastructure and technology with the riverine water irrigation being
the least (about 20% of the small reservoirs). Interestingly, the less expensive
technologies in terms of investment are developed privately while small and
large reservoirs are mostly developed by the government. This shows that
irrigation development policies should aim at promoting more affordable
shallow well technologies compared to very expensive small and large
reservoirs.
Also the seasonal expenditure on water-use by farmers, which includes the
amount of money spent on water abstraction and maintenance by the
farmers either as water levy, on fuel, pump repairs or digging every season,
reveals that the riverine alluvial dugout technology and temporal shallow
well are the most expensive technologies with the cheapest being the small
and large reservoir irrigation (25% of the riverine alluvial dugout) which are
mostly developed by government and development agencies. The major
contribution to the high seasonal expenditure on water for these irrigation
technologies is energy and labour.
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