Abstract

The government of Uganda is currently rehabilitating its irrigation schemes. The largest of these is Doho Rice Irrigation Scheme (DRIS), where farmers will after rehabilitation bear the costs of its maintenance through payment of user fees. This study analyzes farmer’s willingness to pay (WTP) user fees and its determinants, using data gathered from 200 rice farmers at DRIS in 2012. The contingent valuation (CV) bidding game approach and Ordinary Least Squares (OLS) methods were used to elicit WTP and analyze the determinants of WTP, respectively. The study findings show that while farmers are willing to pay Ush 20,000 (USD 8)/acre/season on average, Ush 15,000 (USD 6) acre/season is actually needed to cover maintenance costs as per the 2013/2014 work plan for DRIS. The study recommends charging Ush 15,000/acre/season, however, which not only generates sufficient revenue to cover the maintenance costs, but also lies below the average WTP, which several farmers should be willing to pay without coercion. However, because not all farmers are willing to pay Ush 15,000, it is necessary to incentivize voluntary payment and strong enforcement of penalties against non-payment among those with low WTP. The OLS regression results suggest need for additional intervention that enhances private benefits to farmers, such as improved access to credit, markets and training in soil/water management and rice growing.

Key words: Irrigation water, user fees, willingness to pay, rice, Uganda.