רב - אכל ניר ראשים ויש נספה בלא משפט Abundant food is in the fallow ground of the poor, But it is swept away by lack of

1. Decision Support System for assessing full cost recovery of water development in rural AfricaAdam AbramsonDoctoral Candidacy Examination16 March, 2010Under the supervision of: Prof. Eilon Adar*, Prof. Alon Tal** and Dr. NaftaliLazarovitch**** Zuckerberg Institute for Water Research** Institute for Dryland Environmental Research*** French Associates Institute for Agriculture and Biotechnology of Drylands

2. רב-אכל ניר ראשים ויש נספה בלא משפטAbundant food is in the fallow ground of the poor, But it is swept away by lack of judgmentProverbs 13:23

3. Outline • Overview • Cost Recovery • Beta Site • Appropriate Technologies • Research Objectives • Hypotheses • Methodology • Timetable

4. Rural Water Development: A brief history Three major periods: Water as a human right (1960-1992) Top-down, mostly donor or government funding, health-based approach Water as an economic good (1992-present) Sustainability, demand-driven approach Cost recovery (2002 to present) “Golden standard” for sustainability, yet deemed next to impossible in resource poor areas

5. Cost Recovery • In theory, the idea of recovering ALL costs is emerging as a sustainable way to achieve water service goals in rural areas (UN, 2002 and World Water Council, 2004). Benefits include: • Economic payback for project replication • Community ownership • Poverty reduction • In practice, however, this is rarely achieved. China appears to be the only developing country to demonstrate a successful cost recovery strategy (World Bank, 2004).

6. Sub-Saharan Africa: Rural Water Trends • One of the lowest rates of access to improved water sources in the world. • Slowly making progress: • in 1980, 35% of the population had access to improved water sources. • In 2008, this figure had reached 46% • UN Millennium Development Goal: 70% by 2015 • Water projects in SSA are systematically unsustainable. Many sources are unusable within a few years of installation. One study found between 35-80% of water sources in 11 different SSA nations to be non-functional (Sutton, 2004). • Challenges include technical failures, lack of ownership, lack of financing and capital, inaccessibility.

7. Beta Site Overview: Simango, Zambia • 57 km North of Livingstone • Avg Rainfall: 700 mm / yr • Groundwater depth: 15-20 m • Mean Income: 1,320,000 Kwacha = $280.50 Mean Bags Maize Sold = 13.48 = $186 Total Mean Income = $466.50 / household • 32.7% report Health Problems from Drinking Water • Mean Time to Fetch Water: 30.4 minutes 50% of the population spends more than 20 minutes each trip In dry season, mean household time fetching water/day: 92 minutes

8. Beta Site: Water Sources Hand-dug Well (Traditional) Dam / Reservoir Sand River Extraction Hand Pump / Borehole

9. Appropriate Technologies Hand-drilling Techniques Hand Auger “Baptist” Sludging Technique

10. Appropriate Technologies Pumping Rope and Washer Pump Treadle Pump Access 2

11. Appropriate Technologies Treatment BioSand Filtration – Household Use Slow Sand Filtration – Community Use

12. Appropriate Technologies Income Generation Low Cost Drip Irrigation (LCDI)

13. Research Objective 1 How feasible is achieving full project cost recovery of rural water development for meeting sufficient water supply standards in resource poor areas of SSA: • With various levels and technologies of water development, treatment and delivery? • With and without additional income generation? • At the household and communal level? • Hypotheses: • In many cases, low-cost, small-scale technologies will enable full cost recovery through user payments in resource poor areas of SSA. • Where cost recovery is not feasible through user WTP due to financial limitations, incorporating additional income generation will enable users to generate enough income to pay back costs. • Household level interventions are less financially viable, yet may be more socially acceptable than communal approaches.

14. Research Objective 1- DSS Methodology Decision Support System (DSS) to analyze cost recovery feasibility of various technological and financial approaches under site-specific environmental and social parameters. DSS modes allow for comparative analysis of various policy approaches for any given set of environmental parameters: • Economic Goals: Cost Effectiveness, Cost Recovery, Profit Maximization • Financing mechanisms: User demand (WTP), Income generation • Technological approaches

15. Policy Approach Economic Goal Payment Mode External Source Status quo WTP Additional Income Additional Income DSS Modes Policy approaches for meeting water standards

16. Research Objective 1- Field Methodology • Implement the DSS to make recommendations for cost recovery at numerous locations at the Beta Site. • Micro Loan Program (MLP) to disburse loans according to recommendations of the DSS and recover payments over 2 years. • For Income Generation approaches, MLP will purchase back produce at a fixed rate during the duration of the study. • Success rate of loan repayment will be documented for each loan given, as well as additional income generated. • Surveys both before and after interventions will be conducted to document baseline and treatment effects with regard to peripheral benefits of food security and income generation as well as health impacts associated with improved water services.

17. Research Objective 1- A sub-question Is Low Cost Drip Irrigation (LCDI) an effective source of income generation for rural SSA communities or households? How does it compare to other income generating activities? “Effective” Technology => Income generation => Policy objective • Hypothesis: LCDI is an effective technology for achieving both cost recovery and significant levels of profit in rural SSA communities and households.

18. Research Objective 1- Sub-question Methodology Methodology: • Develop a crop model for yield predictions of produce. Incorporate the model within the DSS framework. • Use model to predict yield and expected income generation within the decision-making process. • Test theoretical model predictions at the beta site. • Calibrate crop model. • Make conclusions regarding effectiveness of LCDI. Use DSS to input relevant parameters for LCDI in order to make predictions of its efficacy to achieve cost recovery and significant profit under various environmental situations.

19. Research Objective 2 How effective is a simple analytical nutrient-irrigation crop model in a rural SSA setting in identifying optimal fertilizer and irrigation applications? What field-level management implications do the results of the model suggest? • Hypothesis A: The crop model will be able to predict yield and income generated to a reasonable level of accuracy for small scale gardens at the Beta Site and will serve as an effective tool for making income predictions within the DSS. • Hypothesis B: Expected management implications are that water-saving approaches to irrigation, and efficient fertilizer applications are economically rewarding even on a small scale.

20. Research Objective 2- Methodology • Develop a sub-module within the DSS that will predict yield of suitable income-generating crops for the beta site environment under various environmental conditions. • Apply sub-module to a diversity of water interventions at Beta Site. • Compare predicted income with actual income and assess the performance of the sub-module.

21. Research Objective 3 What are the policy implications of the DSS and fieldwork results with regard to cost recovery? How does the full cost recovery approach compare to conventional grant-based water development efforts as well as profit-maximizing approaches in SSA in achieving human development goals? Policy Objectives: • Cost Effectiveness • Cost Recovery • Profit Maximization • Hypotheses: • Profit maximizing approaches achieve the greatest benefit, where feasible, since they achieve cost recovery as well as additional income. They are most often limited by lack of access to initial capital. • Where full cost recovery is achieved, benefit to users will be greater than in the status quo, cost-minimizing approach.

22. Policy Approach Economic Goal Payment Mode External Source Status quo WTP Additional Income Additional Income DSS Modes Policy approaches for meeting water standards

23. Research Objective 3- Example Some examples of policy comparisons: • Mode1: When costs are minimized, meeting water standards costs an average of $300 / household. • Mode2: User demand can account for 20% cost recovery in 2 years, leaving an average net cost of $240 / household. • Mode3: When cost recovery from 50% of income generated in the first 2 years is considered, 80% of costs are recovered, leaving an average net cost of $60 / household to reach water standards. Full cost recovery is achieved when 60% of income generated is recovered the first 2 years. • Mode4: When profit maximization is the global constraint, users can theoretically earn an average of $500 / household in profits per year.

24. Research Objective 3- Methodology • Run the DSS under all 3 economic objectives (cost effectiveness, cost recovery and profit maximization) in various situations at the Beta Site. • Implement recommendations. • Calibrate DSS and apply it to other hypothetical scenarios common in Sub-Saharan Africa. • Analyze trends with regard to scale, technological aspects, and social constraints. Perform sensitivity analysis to investigate the effects of various parameters on DSS output. • Make policy conclusions.

25. Timetable A1: Compile DSS literature A2: Develop DSS A3: Run / assess DSS B1: Preliminary Assessment B2: Run / assess DSS for Field Site C1: Fieldwork Preparations C2: Research Objective 1 C3: Research Objective 1.1 C4: Research Objective 2 D1: Research Objective 3 Paper 1

26. Questions?

27. Appendix 1:The DSS framework Some Guidelines • Water source improvements take precedent over new water development. • All participating households are required to pay for improvements or new developments according to the average level of service achieved at that source. • Average Willingness to Pay values for the community are applied to each household • Full construction costs are to be recovered during the 2 year duration of fieldwork. • WTP take precedence over income generation where feasible. • Water standards for 3 attributes can be input into the DSS: • Time to Fetch water • Quantity • Quality

28. DSS Flow Chart - Revised Comparative economic analysis of various policy objectives for any set of environmental parameters, technologies, and other constraints Output Inputs DSS Processes Inputs

29. DSS – Example Modes 2-3: Meet Standard, Recover Costs 40 minutes Households: 11 Water sources: Hand dug well (1) 20 minutes Step 1: Improvement Water quality: Needs treatment Constraint A: Fetching time standard = 20 minutes Constraint B: Quantity = 200 Liters / household / day 10 minutes Unserved = 4 Constraint C: Quality = drinkable 5 minutes Unserved = 6 Feasible improvements: Option 1: - Slow sand filtration at household - Rope and washer pump Option 2: - Cap well - Rope and washer pump Option 3: - Slow sand filtration at household - No pump improvement Option 4: - Cap well - No pump improvement MSY = 3,000 L / day Pumping yield = 1,000 L / day 2 minutes 20 minutes 10 minutes 15 minutes 40 minutes 30 minutes 40 minutes

30. DSS – Example - Distribution - New sources Step 2: New source development Fetching Time: Determine minimum number of sources required to meet fetching time standard Quantity: For each source, how many households served? How many sources needed to meet quantity standard? Quality: Do the sources need treatment to meet standard?

31. Suppose Option 1 costs $900, and yields 3,000 L / day. Step 3: Payment – for each technological option DSS – Example Step 4: Subject to constraints: - Political / legal - Development Impact - Social Acceptability of Technology User WTP for various levels of improved water services – conjoint analysis results Does WTP cover costs? Step 5: Final Output: All feasible options with comparison of policy objectives Communal Garden Avg WTP = $1 / household / month = $168 in 2 years No. Income Generation Module to predict expected profit from gardening Which options achieve policy objective (cost recovery, benefit maximization)?

32. Income Generation – Example Income is to be generated through drip irrigation of dry season tomatoes. The income-generation module is used for a garden of a given area. In this example, 500 and 1,000 m2. A($) = YB1 – (IC1 + NC2 + C3) where A($) = Profit from gardening ($) Y = Yield (Kg) B1 = Benefit function for tomato ($/Kg tomato) I = Irrigation applied (m3) C1 = Irrigation costing function ($/m3) - Labor component for pumping (hours / week) N = Nitrogen fertilizer applied (Kg) C2 = Fertilizer costing function ($/Kg) C3 = Other inputs (seed, fencing material, etc)

33. Income Generation – Example To solve, maximize A($) subject to costing functions. Output of the module will look something like this: Area = 500 m2 Area = 1,000 m2 A = $450 A = $400 I = Irrigation Water (m3) I = Irrigation Water (m3) A = $200 A = $200 A = $210 A = $100 A = 0 A = 0 A = $-200 A = $-100 N = Nitrogen Fertilizer (Kg) N = Nitrogen Fertilizer (Kg) While User WTP is insufficient to recover costs, income generated through 2 seasons of gardening is sufficient to recover costs for an improved water source serving 7 households.

34. Appendix 2: Recent Findings • Preliminary Assessment: Simango, Zambia 26 October 2009 – 10 January 2010 • Choice-Based Conjoint Analysis • Survey Distribution (N = 403) • Elicit part-worth utility (and marginal WTP) for various attributes of water service improvements for Simango, Zambia • Attributes include: • Water Quality • Water Quantity • Time to Fetch Water • Water Distribution • Financing Method • Cost

35. Recent Findings Figure: Relative Utility attributed to various water service attributes for Simango, Zambia Normalized Utility Quality Quantity Time to Fetch Pump Financing Cost Minutes roundtrip 20 L containers / household / day Low = Not for drinking Medium = Needs Treatment High = Drinking quality 1 = 5,000 K 2 Hrs / wk 2 = 25,000 K 5 hrs / wk 3 = 50,000 K 10 hrs / wk 4 = 100,000 K 20 hrs / wk 5 = 200,000 K 40 hrs / wk

36. Recent Findings Multinomial Regression: Utility = Intercept + αX1 + βX2 … + ε

37. Recent Findings • In order of relative importance, these attributes are valued by the community: • - Increasing quality, especially the jump from low (not for drinking) to medium (drinkable with treatment). • - Financing: Labor hours as a form of payment are preferred to cash. • Increasing quantity, with greater value placed on going from 50 to 500 containers / household / day. • Decreasing Fetching Time, with a zero value (source at home) of less preference than expected. • Cost appears to be less important compared to other factors, especially above Level 2 = 25,000 Kwacha / month or 5 hours / week labor. • Pump: Whether the water is delivered by a hand pump or in a tap does not appear to elicit a strong preference.

38. Appendix 3: Proposed Publications - 1 “Using choice-based conjoint analysis to characterize user demand and financing preferences for water services of a rural, underserved basin in Sub-Saharan Africa.” Goals: 1) Determine the marginal WTP for various attributes of improved water services in a typical rural, underserved population of SSA. 2) Determine the relationship between user demand (WTP) for improved water services and access to various financing options, including water tariffs (control), a micro loan (alternative 1) and communal labor (alternative 2). 3) Provide insights into the feasibility of these options to achieve full cost recovery of rural water improvements

39. Proposed Publications - 2 “Is Low Cost Drip Irrigation an effective source of income generation for cost recovery of water improvements in rural SSA communities or households? A case study of Beta Site, Africa” Goals: 1) Use DSS to make theoretical predictions on income generation of LCDI systems with various crops, fertilizer applications, scales, sizes and water service packages. 2) Implement several recommendations at the beta site. 3) Compare income levels of LCDI adoptors and non-adoptors. 4) Discuss results, especially in the light of cost recovery.

40. Proposed Publications - 3 “Appropriate policy approaches to sustainable water development in rural basins of Sub-Saharan Africa” Goals: 1) Use DSS under various scenarios at the beta site for various policy goals to make theoretical recommendations. Compare results, especially in the light of economic sustainability, poverty reduction, and health benefits. 2) Implement recommendations at the beta site, providing feedback for the DSS. 3) Make recommendations for various environmental parameters common in other parts of SSA.

41. Appendix 4: Feasible Technologies for Beta Site   4 Feasible     2 Feasible    =Available in Zambia = Availability Not confirmed  5 Feasible 

42. Feasible Technologies for Beta Site      =Available in Zambia = Availability Not confirmed

43. Appendix 5: Expected Distribution of Interventions

44. Number of Replications Additional Income User WTP Total Fieldwork Expected distribution of interventions

45. Appendix 6: Academic Background Undergraduate: Harvard University, A.B., Environmental Science and Public Policy, 2004 Graduate: Albert Katz International School for Desert Studies, MSc in Desert Studies, Specializing in Water Resources and Management Relevant Coursework: Hydrology Introduction to Arid Land Hydrology Groundwater Microbiology Field Methods in Hydrology Groundwater Hydrology Agriculture Advanced Modeling of Water Flow and Contaminant Transport in Porous Media using HYDRUS Software Package Hydrometeorology Crop Modeling A Mechanistic Approach to Plant Nutrition Soil Physics Crop Irrigation Regimes Management Intro to Remote Sensing and GIS to Assess Desertification A Quantitative Approach to Water Resources Management in Desert Areas

46. Reading Material (on order) DSS: Bendoly, Elliot, Excel Basics to Blackbelt: An Accelerated Guide to Decision Support Designs, Cambridge University Press, 2008. Albright, S.C., VBA for Modelers: Developing Decision Support Systems Using Microsoft Excel, South-Western College Pub, 2006. Water Development: Arlosoroff, S. Community Water Supply: The Handpump Option, The World Bank, 1987. Cortruvo, J, Craun, G. and Hearne, N., ed. Providing Safe Drinking Water in Small Systems: Technology, Operations and Economics, CRC Press, 1999. Hussey, S and Shaw, R., ed. Water from Sand Rivers: Guidelines for Abstraction, WEDC, 2007. Lancaster, Brad, Rainwater Harvesting for Drylands and Beyond: Water-harvesting Earthworks, Rainsource Press, 2007. MacDonald, Alan, Developing Groundwater: A Guide for Rural Water Supply, Practical Action, 2005. Skinner, Brian, Small-scale Water Supply: A Review of Technologies, Practical Action, 2003.