Irrigation Costs to be Increased – Water Minister


Water and Housing Minister, Donald Buchanan has said that the rates charged for irrigation water to the island’s farmers are to be increased to $3.19 per cubic metre of farm up from $0.62 per cubic metre.
The Minister made the announcement at Tuesday’s (Nov. 5) sitting of the House. The increased cost, he said, would be phased in over the next five years. Irrigation rates were last increased in September 2000.
Explaining the reason for the increase, Minister Buchanan said, “in light of the fact that government’s budget cannot continue to subsidize the farmers, the rates charged for irrigation have to be increased to reflect the real operational and maintenance costs.”
Mr. Buchanan said that the current irrigation rates of 62 cents and 82 cents per cubic metre for small and large farmers respectively, represent 19.6 per cent and 26 per cent of the real operational and maintenance costs for irrigation.
He said that the Government’s projected subsidy for the financial year 2003/04 was approximately $229.5 million, which is 59.39 per cent of total cost and 78.68 per cent of operational cost.
Turning to the expansion of the sector, Minister Buchanan said that the main thrust of the National Irrigation Development Plan (NIDP) was to expand the irrigation sector and recover the operational and maintenance costs of new and rehabilitated irrigation systems.
As such, he said, all new and rehabilitated irrigation systems would be required to pay the full operational and maintenance costs. The Minister disclosed that the 51 projects in the NIDP have economic rates of return in excess of 10 per cent with positive and healthy cost benefit ratios.
The projects, he said, should cost US$106.3 million for construction and were set for completion by 2015. The projects are expected to increase irrigated areas of 25,000 hectares by some 60 per cent and directly benefit over 6,900 farm families.
The initiative is expected to generate an average increase of US$55 million in annual income, consisting of US$32 million of income to farm families and US$23 million in wages to farm labour. It is also expected to increase total annual agricultural production by US$132.5 million.

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