UHOH

1. ISSER UTalca WRI UfZ UHOH IFPRI INIA IFU-IMK

2. Participation in Water Users Associations and Impacts on Crop Revenues Nancy McCarthy, IFPRI

3. Irrigation in the VIIth Region, Chile • (what % dependent on irrigation, basic rainfall?) • Predominant annual crops: wheat, maize, rice, beans • Predominant perennial: raspberry • Irrigation Organized • Slide from somewhere? CdA • Junta de Vigilancia

4. Collective Action in Water User Associations • At community level, households participate by: • Providing Money • As dues to the Junta de Vigilancia, where relevant • For WUA-specific activities • Providing Labor • Clean canals of weeds • Make small repairs or improvements • Attending Meetings

5. Factors Affecting Participation • Household: • Human Capital • Age of Household Head • Total Adults in Household • Average Years of Schooling of Adults • Physical Capital • Agricultural Assets Held by Household • Truck Ownership • Natural Capital • Landholdings • Water Rights • Altitude • Shifters • Wealth (# Consumer Durables) • Distance to Nearest Paved Road • WUA: • Belongs to Junta de Vigilancia • Number of Water Users • Formal Organization (at least hold meetings, have recognized leader(s) of group) • Organizational Characteristics • Heterogeneity in Landholdings of WUA members • WUA Connectedness (# of meetings with others involved in Irrigation System (JdV personnel, other WUA leaders, etc.) • Consensus Decision-Making (dummy, =1 if decisions made by consensus versus by vote)

6. Descriptive Statistics: by Membership in JdV Membership in JdV: Households with more schooling and knowledge of “Good Agricultural Practices” closer to main road, and in CdA’s with more members, greater heterogeneity in landholdings, but that are more connected to other irrigation organizations and who rely more on voting versus consensus to reach decisions

7. Descriptive Statistics: by Membership in JdV Membership in JdV: Much lower Provision of Labor and Cash to the CdA, but overall, higher total paid, due to higher cash outlays to the JdV – for both quotas per water right as well as additional expenditures on investments. Higher Net Revenues per Hectare

8. Descriptive Statistics: by Formal Organization Formal Organizations: Households with more schooling and more land, but with less knowledge of “Good Agricultural Practices”, fewer agricultural assets and consumer durables, and who are further from main road, and CdA’s with more members who belong to JdV’s

9. Descriptive Statistics: by Formal Organization Formal Organizations: Much higher Provision of Cash to the CdA and dues to the JdV, but somewhat less labor; overall higher value of outlays to CdA and JdV in cash and labor. Higher Net Revenues per Hectare But note: Only 48 HH’s in 5 CdA’s without formal organizational structure

10. Summary of Descriptive Statistics

11. Econometrics • Heckman Selection Model for Amount of Money Paid to CdA, Labor Days provided, and Total Value of Labor and Cash Outlays. • Econometric Results presented for those with full information on functioning of JdV (285 households in 31 CdA’s); summary of results for model using all CdA’s • Results presented both for all households, and for only the subset of households that know the number of water rights held (with and without water rights) • Regression and Frontier Models for Net Revenues per hectare • Regression Model explaining Technical Efficiency from Frontier Model

14. Summary: Provision of Cash and Provision of Labor • Amount of Cash Outlays higher where: • More Owned Land • Closer to Road • Do Not belong to JdV • Decision to give Cash higher where: • Older Heads of Household • CdA Connectedness greater • Consensus in Decision Making • Days Labor higher where: • More Owned Land • CdA Connectedness greater • Less Heterogeneity in Landholdings • Decision to provide Labor higher where: • More Schooling • More Owned Land • Fewer Agricultural Assets • Do not belong to JdV • Fewer Members in the CdA • Less Connectedness

15. Summary: Total Value of Cash and Labor • Total Value Higher where: • More Schooling • More Owned Land • More Water Rights • Does not belong to JdV • Less Heterogeneity in Landholdings • Greater CdA Connectedness • Decision to Provide Cash/Labor Higher where: • More Adults • Greater Schooling • More Owned Land • Greater Wealth • Less Heterogeneity in Landholdings • Greater CdA Connectedness

16. Summary: Participation in CdA • As Expected, belonging to JdV, reduces the value of cash/labor provided to CdA • Households with more land and wealth provide more cash/labor to the CdA, even after controlling for the number of water rights held • Heterogeneity in Landholdings decreases the likelihood and value of cash/labor provided • Connectedness of the CdA increases the likelihood and the total value of cash/labor provided • Household in CdA’s with Formal Organizations are more likely to provide greater amounts of cash and total value of cash/labor (results not shown above) • Cash Outlays are relatively more important in larger CdA’s with formal organizational structure and who belong to JdV’s, with more heterogeneous landholdings and more members. In other words, cash outlays become more important in more complex CdA’s.

17. Net Revenues Per Hectare, Regression

18. Net Revenues: Regression and Frontier • Net Revenues per Hectare Higher where: • More adults and More Owned Land • Bookeeping and Knowledge of Good Agricultural Practices • Fewer Agricultural Assets and Consumer Durables • More Members in the CdA, Greater Connectedness of the CDA, less Heterogeneity in Landholdings, Formal Organizational structure (latter not shown) • Production Frontier (using only “inputs”): • At first increasing then decreasing in Age of HH Head • Adults and Schooling, but • Negative impact of Agricultural Assets • No effect of receiving water on time

19. Technical Efficiency, Regression

20. Technical Efficiency • Technical Efficiency Higher where: • Bookeeping and Knowledge of Good Agricultural Practices • More Owned Land • Greater Connectedness of the CDA • Less Heterogeneity in Landholdings • Formal Organizational structure

21. Summary: Net Revenue Per Hectare; Average Returns on Technical Efficiency • Heterogeneity reduces Net Returns whereas greater CdA connectedness leads to higher returns. Similarly, less heterogeneity and greater connectedness increase technical efficiency • Larger Membership has a positive effect on average net returns, but no effect on technical efficiency. • Households in areas with more formal CdA organizational structure have higher net returns, and achieve greater technical efficiency

22. Simulated Impacts of Improved CdA Performance on Net Returns and Technical Efficiency • Using the maximum observed # of connections (3) and the lowest heterogeneity in landholdings (5.75), with average values of all other variables, • Net returns per hectare increase by 42%, from 960,063 to 1,363,605 • Technical Efficiency increases by 26%, from .47 to .58 • If all CdA’s moved to a more formalized organizational structure • Net returns per hectare increase by 31%, 960,063 to 1,264,133 • Technical Efficiency increases by 14.5%, from .47 to .55

23. Concluding Comments • Larger CdA’s are more likely to have a formal organization structure, and members are more likely to provide cash in place of labor, so that overall, membership size has little impact on the overall value of cash/labor provided to the CdA, and no impact on Net Returns or Technical Efficiency • However, Heterogeneity in Landholdings reduces the overall value of cash/labor, and has a negative impact on Net Returns and Technical Efficiency • The Connectedness of the CdA president to other players in the Irrigation System (meetings with other CdA leaders, attending meetings at the Junta de Vigilancia) increases the value of cash/labor provided to the CdA, and has a positive impact on Net Returns and Technical Efficiency • The Main Issue confronting smaller CdA’s is reducing fixed costs of establishing more formal organizational structure with greater links to other players in the Irrigation System • The Main Issue confronting larger CdA’s is managing heterogeneity amongst CdA members thereby increasing the value of cash/labor provided to the CdA.