Analysis of the Response of Small and Medium Farmers Incentives for Investment in Water Saving

Abstract

The review of current water balance of Tunisia as a result of increasing demand and a stagnant supply reveals a situation of water stress, an endowment of nearly 450m3/an/habitant. The irrigated sector, the largest consumer of this resource (80%) would be the first affected by this situation. To reduce the effects of water scarcity on irrigated agriculture, the government has designed and implemented since 1995 a national program of water conservation. Significant positive incentives have been decided to encourage farmers to adopt new irrigation techniques offered by this program. It is clear that despite the importance of subsidies for investment in water-saving equipment (60% of the amount invested), the equipment rate remained below the expected objectives. The present work aims to define a methodological approach and test to explain the slow growth of water-saving program and analyzing adoption decisions of the proposed techniques by small and medium farmers. The data used to estimate the model specified is collected by survey of 40 small and medium farmers belonging to a private irrigated area Abida Kairouan Governorate. The results show that the effects of eliminating the interest subsidy is higher than the subsidy rate of capital. So the reaction of small and medium farmers is slow vis-a-vis technological change, and must be supplemented by other types of interventions. Thus, the instrument implemented is not effective. The remainder of paper is organized as follows: In the first section, we will present the general framework and then the specific context and the background information in order to introduce the problem and the research methodology. The second section will develop the background literature of our work. In the third section, we will discuss the various results of the work. Finally, the last section talks about the findings and to remember the different political implications of this research.