A READING IN 'S WATER-I,A}.ID FILE TOSIARDS A STRATEGY FOR THE NEW CENTURY

DR. RAOUF f. XIIOUZAI'!

CLIRO, BGTPT irufrI, 199{ COPYRIGIIT RAOUF KHOUZAI,I 1994 PROTECTED BY PERNE COI{VENTIOI{ TABI,E OT CONTENTS

l_ 1- r_ LIST OF FIGURES iii LIST OF TEXT BOXES l- l_ r.

I. BASIC PROBLEI,I 1

II.LAND.... 3 II.A. VERTICAL EXPANSION 3 II.B. FORCES BEHIND ENCROACIIMENT 4 II.C. TREE ZONES 7 IT.D. NEW CITIES 7 II.E. LAND RECLAMATION: THB SPEARHEAD 9 9 II.E.2. RESOLUTION OF A CONFLICT t4

III. WATER L9 III.A. RECENT WATER BUDGETS 19 III.B. WATER POLTCY 2A ITI. C. FUTURE SCENARIOS 22 III.D. ALTERNATIVE SCENARIOS 26 III. D. t-. Supply Sources 26 III.D.1.a. The Nile: inter-national aspects 26 IfI.D.1.b. The NiIe: upper Nile proiects 27 III.D.l-.c. 28 III.D.1.d. 29 III.D. 1.e. Aquifer water 31 III . D. 1. f . Reuse of drainaqe lrater 32 IIf .D. 1. g. Groundwater 33 ffI.D" 1.h. Recyclirlg_sewaoe water 34 III.D.2. WATER NEEDS 34 III.D.2.a. Irrigation: Old Land 35 III . D .2 .b. f rrigation: New Land 36 III.D.2.c. Municipal and Industrial USes 36 Iff .D .2.d. Non-Consumptive Uses 37 III. E. POLICY IMPLICATIONS 37

IV. RECOMMENDATIONS 39

REFERENCES 40

1l- LXST OF IABLES Table 1: The Egyptian population in census years and projection for the years 2000 and 2O25. . Table 2; Ernployment and investment in free zones until 3LlL2lL992 (vatues in million Us$). 7 fable 3i EmplolnneTll.investment and production in new cities (values in million LE). . o Tab1e 4: Reclamation areas identified by LUP. 11 Tab1e 5: Land Reclamation Contribution to the Growth of the Agriculture Sector (million L986187 LE) L7 Table 5: Average sectoral growth L987 /88 L989 leO (percentage) .18 Table 7: Water budgets for the years L987, 1990, 2OOO and the committee's scenarios for 2025. .20 Table 8: Differences in committee's scenarios. . ' . .23 Table 9: The author's optinistic and pessimistic water budgets. . 25 Table 1O: The contribution of upper NiLe tributaries. -26 Table 1L: River flovr at HAD and water discharged to the sea. 32 Table L2z Evapotranspiration estimates. . 36

LISIT OT I.IGURES Figure 1: Yield of major cereals 1960-1990. Figure 2: The area of agriculture land Ls77-L992 in thousand feddans. . 10 Figure 3: Decreasing trend of the Nile's annual natural yield. . . o 28

LIST OF TEXtr BOXES 27

tt t- PREFACE

This paper is an activity within ttthe First National Conference on the Future of Land Reclamation and Development in Egyptt' held in Minia University, Egypt in Z-s November 1-992. The assignment was to review the literature on the economic feasibility of land reclamation. However, the findings of the review invited a reorientation of the study scope. A conmon shortcoming in the reviewed material is the use of partial equilibrium analysis to evaluate land reclamation in Egypt. This type of analysis neglects the fact that today's Egypt is the outcome of series of successive Iand reclamation processes carried out generation after another. So will be future Egypt. Furthermore, those studies miss the significant structural changes which the reclamation of three mittion feddans in various fgyptian deserts. An appropriate evaluation has to be imaginative and creative. Taking the present situation as a reference point on the time scaler BD appraisal of land reclamation in Egypt has to go back a century in the past to uncover the value of one million feddans reclaimed in the De1ta prairies. The inquiry has also to move one century in the future to unveil how Egypt will survive with population increasing year after another, old land being encroached, and no land reclamation. OnIy then one ean see that land reclamation is not just a project in some area, it is a continuation of national endeavor which had started centuries ago. Today's Egypt owes its existence to God,s gift: land and water. The presence of these two natural resources in this particular place was a prerequisite for the birth of one of the earliest civilizations on earth. Furthermore, it is because of their endurance the Egyptian civilization outlived it's contemporaneous ones. Evenmore, Egypt's survival over the coming decades depends in the first place on how weII this precious endowment is preserved today. This work is a natural first step towards understanding the sustainability of land-water management; it is a partial assessment of the current status of this two resources and related issues. Over the past decades, Egypt was overwhelmed by four wars. Successive governments were engagea in creating a socialist regime, then switching-fixing back, after a titter experienie, to a free market economy with structural inbalances are the hot floating issues. In the aftermath, todayrs worries overweighed the concerns which may not affect our generation yet will surely inflict upon the coming ones. Last but not least, the honorarium provided by the Ford Foundation to support this work is acknowledged. The author expresses his appreciation of the discussions of the early phases of this work which hrere provided by Dr. David Nygaard (then the Representative for the Ford Foundation in the Middle East and North Africa) and Professor Mohammad Attef Kishk of the Soil Sciences Department, Facurty of Agricurture, Minia university and the Head of the conference organizing committee. The author sta-ys sorily responsible for all the personal opinions expressed in this volume. They do not necessarify represent those of the institutions he is assdciated with. ---1

Raouf Khouzam , 7gg4 r. BASIC PROBLBM

A corner stone of the analysis in this volume is that ngypt,s top priority objective is to arrange for a decent livinghood for its increasing population. In 1991, the Eglptian population was estimated at 54.7 nillion supported with an agriculture area of about 7 million feddans (MoA&LR 1993 25,2't-281 .r As such, the agriculture land/man ratio is O.1-3 feddan. By 20251 the population is expected to reach 92 million.z The basic concern of an intergeneration developmental strategy is the quality of the food producti-on base this generation can leave for future ones. Todayrs behavior determines the quantity and quality of the resources available for use in the coming century. Land and water are the only two factors of production which have endured destructive forces since the beginning of history. over the centuries, their endurance has been threatened by series of Table 1: The Egyptian population shortsighted utilization in census years and projection policies. Mareotis (the coastal for the years 20OO and 2025. belt west of ) was an important. agriculture zone in the Greco-Roman and early Christian times. By the loth Century it gradually desertifiLd (Kassas J.991:9). In a subsequent era, horizontal expansion has raised the agriculture area from 4.7 nillion feddans in L877 (Radwan Lg74) to about 7 nillion feddans in L99L. rn spite of these attempts, data on the area of agriculture land over the past century indicates

11 feddan : 1.o4 aere : 42oo m2 approximately. 2Another projection for 2O25 is 9O.4 nillion (Wor1d Resources Institute L992 z 246 , table t-6 . L 2 that Egypt has tost vast stretches of fertile soi1.3 Historical actioni-itso shapes today,s water rights which were arranged with Ethiopia as earlf as 1891, then in fgOZ, Lg25 and with the Sudan by the a-greements of Lgzg and 1959 (Waterburry L979t74-751 . That is what history tells. A number of studies overlooked the fact that water and land are technically complementary factors of production. Considerable effort has been made to answer the redundant question whether land or water is the binding constraint to both horizontal and vertical expansion. For exairple, Biswas indicated that rrthe. major coirstraint to developmeirt,' especially agricultural production, is water and not landfr [Aiswas fggf:3). Another study stated --under the subheading r.water or Land as the Major constrainttr-- that rrwater supply was not the limiting factor, Et least through the year 2OOOr (USDA L976t91. The fundamental water-land ir"ropf"*Lntarity invited addressing their issues in this volume.

3rhis can be seen clearly by examining a time series data on the cultivated area from L877 to 1966 Provided in (Radwan L974227O; table A-10). 3 II. LAI{D To maintain the meager per capi.ta. share of agriculture land at its 1991 level of O.13 feddan, the agriculture area has to be raised to t2 milLLon feddans by 2025. Assuming, unrealistically, that no further old-land encroachment takes placer dh area of 5 million feddans need to be added. Notwithstandinq, old land area is decreasing under the pressing need for urban-expansion. In other words, Egypt has to minimize encroachment and reclaim new lands. An increasing population needs more food, more shelter, and more job opportunities. Sincere efforts are being made in those directions. To raise food production, the Ministry of Agriculture and Land Reelamation (I.{OA&LR) is heavily investing in riising and productivity (and, subsequently, that of water); the outcome is reviewed in section II.A. Land encroaehment is offsetting these effortsl forces behind encroachment are addressed in section rrII.B.rr To reduce the population pressure on the o1d land and to create new job opportunities the government is adopting four-prone policy: establishing free zones, constructing new industrial cities, creating new desert communities through land reclamation programs, and utilizing coastal zones to build tourism villages. The first three components are reviewed in sections fI.C-If.D. A review of the fourth component (touri.sm villages) has not been covered in this work due to time and resource linitations.

II.A. VERTICAIJ EXPAI{SION MOA&LR is making every endeavor to catch up with population increases: expanding the area of agriculture land via land reclamation (discussed in section fLD), intensifying cropping pattern, raising yields, and introducing'new crops ana nign Viefa varieties. The efforts to raise the yield of the major ceieals over the past three decades succeeded in raising the overall yield of cereals from an average of t.32 tons/feddan in Lg6o-64 to an average of 2.24 tonslfeddan in 1986-90 with average annual increase of 2.38. Figure 1 displays yield trends of the main cereals. crop intensification can be traced through the change in the cropped area. rn L877, it was 4762 thousand feddans; with agriculture area of 4742 thousand feddans the cropping intensity was 1.oo4. By the end of the 19th century the cropping intensity reached t.37 and kept increasing to 1.63 in the nid of the twentieth century (Radwan L974:27o1. rn 1991", the cropped area was 11648 thousand feddans with an o1d-land area of 6297 thousand feddans (MOA&LR l-993:27) i the cropping intensity is 1.85. A number of factors has impeded accruing the gains of vertical expansion: the disastrous excavation of the feitite top soil to 4 make bricks, rising water table, increasing soir sarinity, degradation of water resources, neglecting vertical expansion i; the- past, and the adoption of unrewarding agriculturil pricing policy. These factors are rather tecnnicltty surmountabl-e; but encroachment is more difficult to overcome because it gains its momentum from the population increase. The folJ-owing section addresses that phenomenon.

Figure of major cereals 1960-t-990.

II. B. I'ORCES BEIIIND ENCROACHUENT At the national level land is in fixed suppry. yet, if it is looked at as a source to be allocated among econornic sectors then its supply to any of those sectors can vary. Land owners will be interested in directing it to the highest tria available r*ithin the region. To simplify the analysis, demand for fertile land is classified into two competitive categories: demand for agrJ-culture use and demand for nonagriculture uses. The latter is the force behind the land encroachment. Both demands shifts up continuously under the pressure of the increasing population which is congested i-n the Nile valley and delta (about-a* of Egyptrs area). the betravior of the two competiti-ve demands detefmine the efficacy of the encroachment force. Land demand for agriculture use is derived from the demand for agriculture productl. Unlike the demand for non-agriculture uses, Iand demand for agriculture use has a special 5 feature that it can be satisfied by local or foreign sources. In that, ds population increases demand for food increases.a Part of that demana-is satisfied by local production, the rest is imported. Hence, a drop in domestic-agriculture production can be fulfilled by importing Another feature of land demand for agriculture use is that its value is bound by a ceiling imposed by the price level of the imported substitutes which price may be comparable with that of.the doirestic market especially with the elimination of trade barriers by the new GATT agreement. Contrarily, value of land demanded for ninagriculture us6s is unbounded. Pil-ing-up population pressure on Iand for urban use makes its value surqe to levels that persuade land owners to divert it to the more profitable nonagriculture uses. A constraint on that diversion is the fact that land is an immobile source. so the severe competition between urban and agricultural use affects lands at the outskirts of the expanding metropolitans, towns, and villages. But, it has to be clear that as those centers expand they encroach new agriculture land. An alternative $ray to assess the competition over land is to estimate the relaiive size of demanders in each category- As mentioned above, one agrieulture feddan provides food for I persons. For each I persons demanding the output of one lgricultural feddan, there is more than one thousand persons d6manding the same feddan for urban use.5 Demand for fertile land at the outskirts of population centers is due to the fact that new families have to live close to their own comrnunities, close to centers of social services, and to labor markets; aII available only in the delta and valley. Moreover, year after another, the governrnent itself has to continue shifting ireas from agriculture use to erect projects for the improvement of the rural life. Schoo1s, hospitals, electrical stations, drinking water stations ...etc. have to be built close to the rural communities which they will serve. Given that situation is not strange thaL laws against encroachment have failed to protect the agriculture land. During L984-93, more than half a million lawsuits were filed against violators. Only half that number was processed by Lgg3. Of the processed cases,

aDiscussion is confined to population as the only variable of interest to this work. sone feddan : 42oO m2 which is enough to build L4 ten-storeY apartment blocks each 3oo m2. If each storey consists of two apartments, then there will be enough for 260 families. Assuming a small family size of 4 members, then there is at least 1o4O persons using this feddan for housing. 6 8Ot were dismissed, the other 2oZ were fined a total of LE 104 million. Hardly, any fines has ever been collected (AlMussawar 1993-a) . Incompetence in facing that phenomenon is attributed to a number of factors. First, the severe control in the agricul,ture markets which used to be followed for decades depressed the return to agriculture land at the time when return to land from non- agricultural uses has been rising. Second, Ioopholes are being skillfully played with by violators. Third, some officials overlook the violations in order to avoi.d tension in their areas. Fourth, favorism and nepotism play a role in securing the gains accrued by the privileged violators. fifth, bureaucratic procedure to take effective legal action against violators is so long that, by the time a penalty is enforceable land is not cultivable anymore. Sixth, the fine on the infraction of encroachment is sma1l (LE IOrOOO/feddan) compared to the land prices for housing (ranges from LE 360-720 thousands per feddan) (AJ-Mussawar 1993-a) . As a consequence of the above factors, eneroachment is still going on. There is no accurate figure for that rate, hut 3O thousand feddans is considered a good educated guess (Biswas 1991). Indeed, encroachment is a conflict between the Egyptian man and hinself. Land use to satisfy urban needs comes at the account of food production. Since it is practically impossible to stop encroachment, future grenerations have to be compensated for the damage. Encroachment has to be legalized and subjected to high annual tax which revenues are to be dedicated to works that improve the life of future generations. Housing and social services necessities erode the effectiveness of vertical expansion as a path which concentrates on meeting the rising food needs. To alleviate the pressure on vertical expansion, provide nerr, job opportunities, and give new space for shelter, adjustment of the borders of the De1ta governorates are proposed to give them access to the desert for their expansion (AlMussawar 1993-b). Furthermore, Eqypt has initiated a number of activities: the construction of free zones, ne$, industrial cities, new land communities, and tourism villages; all are established out in the desert. These independent activities would have been better if integrated under one [construction and development policyrr since that will enhance satisfying their common onjectives. Apart from the benefits known to result from such considerations (such as raising emplolnnent, exports...), they have a unique feature in the Egyptian context. They lead to geographical redistribution of the Egyptian population from overly populated and valley to almost unpopulated areas. 7 The following section briefly review the free zones and new industrial cities. Since land reclamation is the most controversial issue, it ltill receive special attention.6

II.C. TREE ZONES By L992, Egypt has established five free zones in Alexandria, , , Ismailia, and Nasr City in Cairo in addition to three more zones under construction. Besides, a number of private free zone (PFZ) are permitted outside the declared regions. Together they provide more than 26 thousand job opportunities in 365 factories with total investment of $z billion (tabIe 2', . Investment per worker range from $30-L7o thousand with an overall average of $8o thousand. Table 2: Enploynent and investment in Iiiir,iiii&):"rt' 3LtL2t Lee2 (varues in

II.D. NEW CITIES The objective of this policy is to establish economically independent urban centers in the unpopulated. Those centers are expected to use the underutilized deserts and coastal resources to the utmost and to become centers of attraction to the Egyptian population. The Tenth of Ramadan, Sadat city, Sixth of october, New Borg El-Arab, New Nubaria, New Sa1hia, and Badr are centers for regional growth. In addition, towns which are economically dependent on regional centers are also built; examples are the ten small gatherings built around Great Cairo, (e.9. Fifteenth of May),

6There is no data readily available on tourism villages so it is left to a future phase of work. 8 New , El-, Nev, Beni-Suef, New Minia, AI-Safa (New Assioutt), Akhmeem (New ), Tiba (New ), New - By the end of Sept. Lgg2 (i.e. after 11- years from the beginninq of the program), about 68 thousand jobs trave been created witlr: a wage bill of LE 1-3-4 rnillion, production over LE 4 biIlion, l-nvestments of LE 3.75 billion, and about quarter a million inhabitants have moved to the new cities (I,{ORNCH 1,992:15-1-8).

Table 3: Emplolrment, investment and production in ne!, cities (values in rnillion LE) .

II.E. I,AIID RECLA}IAIION3 TIIE SPEARUEAD Tlre development of the agriculture area since L877 is shown in figure 2. Early reclamation efforts were made in the prairies at the outskirts of the old land where irrigation relied mainly on gravity. Currently, reclamation has been directed to high- elevation desert lands where extensive energy is needed for water tifting.

Result of land reclamation efforts can easily be seen in the upward trend of the agriculture area in spite of continuous encroachment. In addition to those efforts, the Land Master Plan (tMP) identified Figure 2: The area of agriculture land L877-L992 in thousand feddans. an area of 2882 thousand feddans as reclaimable using surface water (LI,IP l-986:vi) . The geographical distribution of those areas is shown in table 4.

II. E. 1. IJI:TERATURE REVTEIT A number of studies assessed the economic feasibility of }and reclamation in Egypt. They are made by a variety of authors (academic researchers, consulting firms, international organizations) with different degrees of support or disapproval with land reclamation policj-es. Thls section reviews a sample of those studies.

El-Abd (1979) indicated that inadequate marketing facilities, deficient communication with markets, the absence of understanding between settlers and administrators, and the lack of financial facilities are beyond the failure of new farms.

Ilassona (1979) highfighted the importance of selecting the appropriate institutionat model from a continuum of two extremes: (1) a participative mode1, and (21 non-participative model. Participative model is believed to be slow in yielding the expected results, yet in the long run they are more persistent than the non-participative one because it is built by the community members themselves whereas the non-participative model is the creation of the bureaucracy. irasson (1979) stressed the freedom of choice. Instead of leaving new settlers to produce the $ray of life they wish, they are treated as if they were rrsoldiersr who have to play a predetermi.ned roIe. Alternatively, self-development and collective action should be emphasized in new land development.

The Water Master plan Table 4: Reclamation areas identified by (WUP 198O-b) evaluated land reclamation LMP. follotrring traditional cropping patterns. The study assumed: (a) an initial reclamation period 5 years, yLeld will be one third the national average on the 6th year and reach 60? in 10 to t-5 years, (b) a per-feddan water requirem_ent of Trooo m3 for surface irrigation and 5rooo m3 for sprinkler,' (c) field application efficiency was assumed to be 7aZ for surface irrigation and 858 for sprinkler irrigation and conveyance losses from Aswan to the field $ras assumed to be 1O8!.

Elcluding payment for land and using 1988 shadow prices, IRR of different projects ranged from 8-222, returns to water was negative in some plots in the New VaIIey.

Pacific Consultants (1980) performed financial and economic cost- benefit analyses. The analyses captured economic values of water, energy, other inputs and outputs. The study was made in South Tahreer in lrlest Delta. ft covered four patterns of management

TDrip irrigation was not considered on the ground that it was, at that time, still in the adaptation phase. l- l- Ismall-holders (SH) 5 feddans, _graduates (GR) 20 teddans, iomesteaders (HS) 5O feddans, and joint ventures (JV) 6000 feddansl and four irriiaation techniqties (clnter pivot, drip, sprinkler and surface irrigation). Lack of reliable data, especially- yields, was the major obstacle faced by the study team. SourcLJ used are: farmers estimates, coopera€ives, redords, visual observation by telm members, dislussion with specialists, and national data. Adopting a rather optinistic targeC yields, the main conclusions of the study s'ere3 l-. Under subsidized prices, a farm financial return is generally positive. 2. State farms show heavy losses as a result of poor management, lack of operation andhaintenance funds, and low output prices irnposed 6y the government to keep consumer prices low. 3. JV and HS have the highest return. JV achieve a financial IRR of iZt using center p1vot, and 17t using drip irrigation. 4. HS make about 9t if target yield is reached within 10 years and L2.52 if reached in 5 years. If a feddan is sold at LE 2OOO, speculation can achieve a financial IRR of 148 and 288 if tirglt yield is reached in 1O and 5 years; respectively. 5. GR put 26* of their farms und.er orchids. Because of the fenltfr of the gestation period, most of them are in financial difficulty. 6. If lifting height exceeds 20 meters, a negative. ra-te of return r"s-ult= -"ren with the most optimistic- crop yields and with excludi-ng cost of social serviees. 7. A number of factors depress the feasibility of land reclamation: management inltficiency, absence of extension service, irrigatioir regularities, ancl short supply of maLerial inputs, labor and finance.

8. . The study indicates the impact of technology. choice on the 'profitanifity of an enterprise. SH using sprinkler manifold lras negative-economic ratl of return (ERR) at target yield. If sH use surface irrigation, ERR goes up to 6* (5 years development period, zero lift & zero economic water cost) ' with aiip irfigation, target yiel.d has'to be raised by 258 in order to maintiin .t' of 6*. JV get negative ERR if they use center pivots (at target yields); ERR rises to 9.62 if target yield is raised by 25*. L2 Tadros (1982), in agreement with El-Abd, Hassona and Jasson (L?7?), exPlaine-d thP using North' ilestefn Delta area as a study ca-se - probiem in new lands by the lack of communication and feed back Letr^reen the government designers and settlers. When a settler arrives to his new farm it is too late to make a compromise between a designer's model and a settler's needs-

Iomich (198{) collected data to examine financial and socia} feasibility of private land reclamation in Lake Idku in Beheira Governoratl, n"€,.i"y. (drained section of Lake Manzala) , Salhiy-a in Sharqia Governorate, Assaf Reclamatiotr coop-rative'in eizi Governora€e, Kom osheem and Khawagat both itr Eayoum Governorate. Two essays hrere developed: the first dealt wittr the feasibility studies in lake areas based on representative farm budget studies and multiperiod Lp. He found thaL lake reclamation involved high cost and deferral of positive returns.

The second study concentrated on the prevalence of adaption _and innovation within communities in nel, land. Illuminating Tadros (Lge2) results, Tomich attributed the difficulti.es faced by- land reclamation projects to the absence of adaptive behavior which was eliminated i-n elrty land reclamation efforts by design rigidity'

classburner and otherg (1987) made one of the toughest statements against land reclamation at the end of a four-day workshop held in Ciiro in 1981-. In a paper, or rather a declaration --which is described as rr... an imifgam of many views attained a high degree of consensusrr- it itatea (Glassburner 1-987:1 & 4)'. *It ie evldent to moat observers, if not all, that Egypt'E great effort to elpand- "horizontally" .by creating new land regourceE through desert reclamatl-on hae yieided only the mogt modest bf reeulte, and that potentLal beneflte of further large efforte In that hlrection ls llkely to be meagter, aJ compared wLth what mtght be accompliEhed by a greater concentratLon of efiort and regourceg on the "old landg". Indeed, we aE a lftoupr regard it as imperatlve that the nation's pri-rnarf effo-rt be toward raistng output Pef feddan, iather: than ln attempting to raise aggregate output through l-nteneification of land resources."

The study, based on Ricardo,s argument, concluded that horizontal expansioir'should be pursued if ana onty if the cultivation of.neY faia yields a marginil net benefit greater than that to be obtained from -intensive 6ultivation of the old land. Apart from the anbiguity of the definition of that rrmarginal ngt benefit[, !h" repoit nLglected an important departure from Ricardo: Egyptian 13 supply of fertile soil is decreasing in area due to encroachment and natural factors, and in fertility due to external diseconomies (waterlogging, salinity, ... ) .

Prior (1988) interviewed 25 farrners whom he classified into four categories: a) inforured farmers, b) uninformed farmers, cl informed speculators, and d) uninformed speculators. He concluded that the problems facing land reclamation are: inappropriate management, Iack of support services, unsuitable market institutions, poor infrastructure, and lack of desert research activities. Besides, he found that 8ot of the farms are operating at a low level of inputs far below that corresponding to maximum yield, 5* just before maximum and 158 beyond maximum. Older desert land are generally about 25* more productive, under the same circumstances, than the new land. Prior did not explain how he reached those conclusions especially the ratings. Moreover, field observations are not in complete agreement with some of Prior's findi-ngs. Many new lands are capital i.ntensive and adapt modern technology that makes it more productive than the relatively o1d ones.

IBRD geatoral Review (1989, 1990) described land reclamation as rr. . . engineering success but an agricultural fai-lurerr (IBRD 1989:iii-iv). Land reclamation programs emphasized project initiation rather than completion. Out of a total area of 9L2 thousand feddans reclaimed between L952 and L97L, only one third was productive, another third hras marginally productive, and the last third reverted back to desert. Failure of land reclamation was attributed to poor management associated with the two ways the government opted to benefit from economies of scale; specifically, retaining large state farms and introducing cooperatives to private farms. Statal farms secured job opportunities to a fair sLgunent of the Egyptian working force. Cooperatives failed to support small farmers to benefit from scale advantages. However, smallholders achieved a level of productivity close to the national averages (IBRD 1-989:4). Another reason for failure is waterlogging. The yield of wheat and barley declined in Tahreer due to watLrlogging and salinity by 4ot within four years: wheat yield dropped from 4.L ardab/feddan in L972173 to 2.42 in 1975/76. Barley yield fell from 3.1 to 1.88 ardab/feddan during the same period. The report stresses the lack of coordination in ttre design between drainagre and irrigation. In agreement with Prior, the review ascribed the c,ifficulties the new lands are facing to the lack of production technology suitable for the desert environment which totally different from that of the deltaic environment where new land farmers lrere raised. The L4 problem is aggravated by rrweak post-implementationrr extension and training.

The above review revealed a general disbelief in the feasibility of land reclamation as an effective development. path. In contradiction with that thesis, the land reclamation sector has been witnessing a rush of public and private investments. .{oT instance, the A6u Dhabi Fundtor Arab Economic Development provided ; Ioan oh i72 million to finance the reclamation of 14o thousand feddans. The Kuwaity Fund for Arab Economic Develop-ment contributed $2OO rnillion in the reclamation of 380 thousand feddans i" si""i (the total cost of the project is $3e1 million) - TIr" European Investment Bank provided $eO miffion loan to finance the reclimation of 50 thousand feddans in Nubaraya which total cost is $140 nillion (ErU L9eO:15). Furthermore, public investment has been playing a-pivotal role in all land retlamation projects. It- i; used to implement infrastructure work in thl r6gion under reclamation. In settlement projects, it is extended to include, in addition to infrastructure, iociaf services and personal support. In youth projects carried out by the Upper rqypl Agricultuie Company in West El-Fashn in Governorate ana Samalloutt in Minia Governorate, a youngster received 5 feddans, a house, a cow or a buffalo and 1 s!'ipend of LE So/month- for a year. Moreover, land price is paid in installments over 30 years witn 4 years grace period (Al-Ahram _Jan. 5 and 6, 1990). dni= explains ipending aUout 4ot of the development budget for tn" agrieuiture-iriigation sector in the t982187 Five-Year PIan on land reclamation (IBRD L989:1). fn that situation, it is imperative to explain the conflict between the positive attii.ude of thl qovernment and Egyptian the investors, on tire one hand, and the geneially negative findings of the studies produced by diiferent sdholarsr oD tne other hand. A number Of -xplanation can be introduced. 1. pioneer private investments are allocated on the gr-ound of subjectiie expectations due to the lack of reliable data and inf6rrnation. Such behavior may be enhanced by the lack of alternative investment channels in the absence of a stock market capable of absorbing available capital (.the scandal of rrMoney Allocation Companiesrt is an evidence).o

sstock markets have been activated but not readY Yet to attract investors away from investing in real state. L5

2. Land is purchased as a store of value in face of souring inflation, or for speculative purposes. In such case an investor puts funds barely enorlgh- to keep some activities going on.e 3. Having many farms continuing in business does not necessarily iurply- their financial soundness. Once fixed costs are inluired, a firm may operate anywhere between the shutdown and the breakeven points aecruing, that WaY, a short-run profit. That enphasizes the importince of long vs. short-term analysis. 4. Most of the studies looked at the issue from a micro perspective and based on partial equilibrium analysis (see for Lxamlte: IBRD 1989, Prior 1988, Tomich L987, Mansour & El-Zbghby 1987, the itmerican Chamber of Commerce Slrnposium on Land neclamation published in the Business Monthly of Jan' t_990, DDC 1985, DD-C 1"986, and DDC I"987). N.eg.te.qted macro aspects may have great cotribution to the feasibility of land rellarnatio-n.

:o

il:i::i::iAU€

Table 5: Land Reclamation Contribution to the Growth of the Agriculture Sector (million ]-s86/87 LI.)

5. Some scholars (as Glassburner et a}. ) evaluate land reclamation on the bases of the return to the resources

'ngypt has succeeded lately in brinqin inflation under control. 16 allocated to that sector. This .is a valid criterion. But the point is that they rely on short-term indicators instead of long term one that capture the inter-generation benefits. For example, the contributj-on of the land reclamation sector to the growth of the Egyptian eeonomy is modest. The expected growth in the land reclamation sector (f-18) is far greater than that of the old land (2.62t (tab1e 5). Few points have to be brought to attention. Whereas the growth in the agriculture sector is the result of improving land productivity, that of the new land is a combination of two factors: improving the productivity of existing new farms and the addition of newly reclaimed lands. Besides, the growth rate in land reclamation sector is related to a small base while that of o1d land is related to far larger foundation. Conseguently, the relative contribution of the new land to the growth of the agri.culture sector is small: less than l-& and even smaller towards the growth of the whole economy.lo A contribution of less than 1-8 to the agriculture sector translates into even smaller contribution ,r:::riii:i:Ai,f-431{,,'i::ii.i.i.:.:ifie to the growth of the whole economy; the whole agriculture sector is less than 38 (MoP 1990:33-4O). Given the modest contribution of land reclarnation towards the economic growth of Egypt, a couple of intriguing questions are due: how one justifies withdrawing resources from other sectors to support the land reclamation sector?, and how night have that slowed down the growth in those sectors?. For Table 6: Average sectoral growth example, irrigation water LggT/gg LgBglgo (percentage) is withdrawn from the - agriculture sector, enerqy is withdrawn from the industrial sector, capital from all other sectors... etc. No doubt, the answers would favor resource reallocatj-on towards sectors other than land reclamati-on. This conclusion

locrowth in ne$, land production is LE 97,6 million which is O.76* when related to 1989/90 production of the agriculture sector. t7 in particular brings up the argument raised at the beginning of inis volume. Land reclamation benefits are not of short term nature. Hence, it can not he rateel using annual rate of growth. Its beneiits can be seen after decades; a live 6xample is the old land today which were reclaimed in the past centirry and South Tahreer iegion which was reclaimed about four decades ago. 6. The long-term nature also casts doubts on the suitability of cost-benefit analysis to evaluate land reclamation. Cost- benefit analysis fould discount those benefits to the present using the diJcounting rates which diminish significantly after twenty years. In tnis respect, a man wonder if cost-benefit analy;il were known in USA two hundred years a9o, would the West had been flourished as it is today! !. 18 III. WATER The grievance of the water situation is succinctly described by an authoritative report stating that: rrlf present management practices and cropping patterns prevail, this could mean that up to 60? of the agricultural land will not be irrigated" (Abu Zeid and Rady 1991:57-58). This part reviews the current and future situations of water resources in terms of its availability, constraints and needs. Furthermore, it explores the efforts made to secure future needs.

III.A. RECBNT ITATER BUDGETS The water budget of 199O (table 7) shows a total avai-lable water of 63.5 billion m3 (BcM). The nature of that magnitude deserves some clarification. It comprises fresh and reused waters. Total fresh water is 56 BCM of which 55.5 BCM is Egypt's share of the Nile's water and o.5 Bcl{ is an estinate of water extraction from aquifers. The remainder (7.5 BCM) is nothing but reused quantities of the fresh volume. Actually, the increase in reused water is the main source of the rise in-total available water in 1990: 824 of the increase in total available water came from the rise in reusing drainage and sewage water. Sinilarly, the increase in avaj"lable water in future scenarios relies on raising water recycling as discussed below. Four fifth of total available water is used for irrigation. Comparatively, other uses are of minor magnitude. A negligible surplus is shown (2* of total available water in 1-990) although water shortage is used to be observed in different o1d- as well as new-Iand regions (DDC 1985, 1986, and lgAT; Skold et al. 1984, and Bowen and Young 1982). One explanation of this discrepancy is that observed shortage is a result of unequal water distribution; if inequality is corrected such shortage will not be observed. Another interpretation is that the water budget is balanced using unverified secondary sources (reused drainage water and extraction from an unknown nurnber of shallow wells). A third explication is the lack of accurate measurement on both sides of the water budget. For example Biswas noticed that the estimated irrigation requirement is nothing but the difference between releases at Aslran and other outflows and usages. Hence, estimated irrigation requirement includes, in addition to crop consumptive use, any unaccounted-for water (Biswas 19912421 . The above factors altogether suggest that it is equally possible that a shortage, instead of a surplus, could have taken place. Anyhow, regardless whether it is a negligible surplus or a shortage, a water issue that reguires immediate attention is eertainly present. The water issue tras a number of facets: riqid 19

Table 7: Water budgets for the years L987, L99o, 2ooo and the comrnittee,s scenarios for 2025. supply in face of rising needs, deteriorated irrigation-drainage network, Iack of proper management, and degenerating water quality. Such situation requires a cognizant policy geared to water shortage situations.

III.B. WATER POI,ICY The guidelines of a water policy is drawn by a rrsupreme Ministerial Committee'r (Abu Zeid and Rady 1991:IV). Accordingly, the Ministry of Public Works and Water Resources (MPWWR) allocates available 20 vrater among the economic sectors via a quantity-rationing approach. The last few decades have witnessed a sharp change in the main features of water policy. For centuries, water was abundant; the main concerns of policy makers $rere flood protection, expansion of the irrigation-drainaqe network to serve the larger agricultural area, enlarge the storage capacity as a precaution against drought and as a devise to balance the distribution between the flood and the dry seasons, intensifying agriculture, andrin addition, polrer generation. Naturally, structural works were the most suitable to achieve the sought objectives.rr subsequentry, a series of dams and barrages were built and the irrigation-drainage network has been expanded tremendously from 9.8 thousand km in 1885-89 (Radwan L974r361 to reach, in 199O, 31- thousand km of public canals, 8O thousand km of field channels, and 17 thousand km of public drains (fsPAN 1990:2). such comprex system cost Egypt a total of LE z3o million at 1960 prices accumulated during the period L8'17 to 1967 (Radwan Lg74:34). Investments have been continuing with significant foreign support (most notably USAID and IBRD). More recently, a number of factors forced a significant shift in water policy. on the suppry side, a decade of drought brought down the average river yield down to an average of 49.6 BcI{ (auu zeid and Rady 1991236,47 and Abu Zeid L992-bzL2-L4). The drought was accompanied by a comprete stop in the works on the Jonglei-r project which would have provided Egypt with precious 2 BcM. on the demand sider dr ambitious program to reclaim 15o thousand feddans annually has widened the gap between supply and demand a tortiori. These factors necessitatea a tight wa-Cer policy. Measures of the tight water poricy comprised (Abu zeid and Rady 1991247-48 and Abu Zeid 1990): (1) the elimination of special water release for the purpose of generating hydroelectric power, (2) the construction of Isna barrage to save water release made in order to reduce the head increase resulting from river bed erosion, (3) prolongation of the winter closure period, (4) rninimization oi water release through branch, and (5) modifying the current cropping pattern in order to reduce its water reqriirernent. obvi-ously, top-dictated structural measures are still the main water policy vehicles. This is a normal extension of a school- of thought which prevailed for over a century and which has not lost its momentum. As a consequence, non-structural measures, which is needed more nowadays to induce conservative water use by individual users are not effectively utilized

rrlt includes the Delta barrage, Aswan dam, Assiutt barrage, Zifta barrage, Esna barrage, Sennar dam, Nag-Hammadi barrage, Edfina barrage, GabaI EI-AwIia dam, the High Aswan Dam (HAD) (Radwan t974222-26 & 26L1. 2L Notwithstanding, quantity-rationing is still the allocation vehicle. Although cheap in terms of its explicit cost, quantity- rationing suffers a number of serious shortcomings. First, it fails to provide decision makers at various hierarchical levels with signals necessary to induce optimization and/or conservation of water allocation at the system,s level whether in time or space dimensions. Second, if every user is forced to take whatever quantity available to him, excess demand (or supply) gap will not be revealed. As discussed above, water shortage has been reported in many regrions though current water budgets show a surplus. As such, system users are motivated to race to appropriate whatever quantities they can get in order to secure their needs. Hence, rationing fails to induce water users to optimize or conserve on water appropriation. Fourth, quantity-rationing approaeh fails to internalize externalities (especially pollution) ; this undermines the sustainability of the water resources system. What makes these reservations more critical is the forecasts for the year 2025.

III.C. FUTTIRE SCENARIOA An early systematic effort to forecast future water budgets htas that of the Water Master PIan (WMP). Since its inception in 1978, it comprehensively addressed various components of water resources in about 60 volumes. A continuation of WII{P is the work of an interdisciplinary committee formed by IIIPWWR. The committee presented three scenarios for the year 2025 (shown in the table). The three scenarios are based on a number of assumptions which are similar with respect to some elements but differed in others. All scenarios anticipated the completion of Jonglei I by the year 2025. As a result, Egypt's share of the Nile water is assumed to rise by 2 BCM. Furthermore, the extraction of aquifer water is assumed to increase seven folds its 1990 level. As for the other supply elements, the scenarios assumptions differed significantly. The quantity of extracted underground water is held constant in seenario l, and allowed to increase by 888 and 388 in scenarios I and Ci respeetively. Similarly, the quantity of reused drainage water is kept fixed in scenario A; those of scenarios B and C are left to rise by 70* and 6*i in order.r2 Recycled sewage water is assumed to rise by 5 to 12 times. Given this set of assumptions, the scenarios forecast that total available water will range from 7O-76 BCM. Obviously, they rely on the hopeful satisfaetion of so many trifsrr: The increase in water availabifity is mainly obtained from raising the reuse of drainage

l2surprisingly, groundwater and reused drainage water are allowed to drop in the year 2025 below the level anticipated in the year 2000. This implies a contradicting trend!. 22 water, from boosting water extraction from unverified groundwater, from promoting recyclinq sewage water, and from the completion of phase I of the Jonglei canal project. Whereas totat available water is assumed to increase by 1O-2Ot of that of 1990, corresponding changes in total water uses are anticipated to fluctuate from a drop (saving) by 118 to a modest increase of 7*.

Table 8: Differences in committeers scenarios.

As shown in table 8, the rise in total available water has unverifiabry been assumed to exceed that of totar water use. Moreover, the three scenarios are biased towards optimistic hypothetical situations leaving aside realistic pessimistic possibi-Iities. When total water uses was assumed to drop to its minimum in scenario 14, the corresponding total available water had increased slightly. on the other extreme, when total water uses was assumed to rise to its naximum in scenario 8, total available water was assumed to reach its greatest value. Furthermore, the lray the scenarios are set up implies that both total available water and its counter part the total water use are under the fuII control of MPWWR such that if the first drops the latter can be reduced and vise versa. Such critical tacit assumption drastically narrows the planning horizon of water resources and deprives the decision makers from perceiving and planning for a posslble water crisis regardless how remote or close it might be.13-

. l3Assumptions underlying various water uses are discussed-below in the corresponding sections 23

tabl-e 9: The author's optimistic and Pessimistic water budgets.

In addition to the above shortcomings, the committee's scenarios did not address a number of importanC issues. Some of those issues invite a rath&-"pii.i=ti" aftitude, others call for pessimistic concerns. On tne'optirnistic side there is: (a) the possibility of all or soie of the upper Nile projects other than Jonglei "r"",rlingT, and ffol water savings thiC could be made as a result of the inevitable encroachment of the old-land. On the pessimistic side, th; ;";;iuirity of a decreasing trend of annual Nile yierd as a 24 result of a south shift in the rain zone has been ignored. Taking these aspects into consideration would allow a more flexible planning practice; this is a focus of the following section.

Future scenarios are nothing but a graduated shades of optimism and pessimism blends. A scenario with rather optimistic shade lnticipates fulI success in all efforts to improve the system as well ls positive behavioural attitudes of the users and bureaucratJ. Clearly, a pessimistic version assumes the opposite- Table 9 presents two extremes which rationale i-s discussed below.

III.D.1. Supply Eources Chances to increase available water is very limited indeed. They comprise raising Egypt's share in the Nile's water via upper Nile pro-jects, assesinent-of safe yield of extraction from aquifers and irna6rground water, raising the rate of wateE lecycling, improving the etficiency of various water uses, minimization of releases especially mahe for non-consumptive uses, and- more sensitive re3ponse to land encroachment. The following sections address each of these elements. rII.D.1.a. The Nile: inter-nationaL aspects. The great Nile river basin has an area oi about 3 nrillion Km2 which impinges upon 10 African countries: Burundi, Rwanda, Tanzania, Uganda, Zaire, Central African Republic, Kenya, Ethiopia, Sudan, and Egrypt. of these regions, the Ethiopian highlands is the source of nearly 858 of the water of both Egypt and the Sudan. Historica1ly, Egypt's water rights Table Lo: The contribution of were arranged by a number of upper Nile tributaries. agreements: a protocol signed in 1891 between the United Kingdom and Italy (on behalf of Egypt Lnd Ethiopiai respectively), il L9O2 betw6en Britain and nrnplror Menelek fl when ltaly left Ethiopia, and in LgzS with Tta1i when Ethiopia fell under its domination again (Waterburry LgTsizd-ls1 . tfater is distributed between Egypt and the Sudan according to the 1959 tAgreement for the FulI Utilization of the Nile Waters.tl 25

Assuming a mean annuar discharge of the Nile at Aswan of 84 Bcu, 10 BCM is assumed rost in the High Dam Lake, Egypt receives 55.5 icu, and the Sudan 18.5 BcI,{. In addition, Egypt got an annual rrtrater roanrr of 1.5 BCM from the sudan through the water year ending in the fall of L977 (waterburry L9792't2-731 and Abu zeid and nady 1991: 5) . 14 AccordinglY, it is assumed that the share will stay constant until the year 2025. However, it is alrowed to rise on the ground that all upper Nile projects are carried out as discussed in the next sectionl this is a component of the optimistic scenario Y. on the other hand, a drop berow the agreed upon share is assumed under a set of pessimistic conditions discussed and shown in scenarLo Z.

rrr.D.l.b. lrhe Nile: upper Nile projects. with all -Nile basin countries.9r i""i"i=i"g. H;;";,-;; country wilr be abre to give water concessions to lnother. As =!9|l - the onry way to rai.se Egypt,s share of the Nile uater, in addition to that of other countiiLs, is through the implementation of_ upper Nile projects. Action 6n such pr6jects i; subject to p-olitical .negotiation in the f irst place ana to the recognilion of the benefit to be gained by alr paities. Even if initiated, the compretion of a project is stitt uncertain due to poriticar instabilities in- the region; the Jonglei canar project is a rive example: The construction of that pro;i.ssg startea in Lg76 yet abandoned in 1983 because of the erupt of national war that

Complications involved in the initiation and the completion of upper Nile projects were behind the failure of some of the wup projections. Phase f of the Jonglei project was anticipated to be completed by l-985, Mashar MarchLs i; :.gso, Jonglei ptiase rr and Bahr Er-Ghazal projects by the year 2ooo (rnrp rseo-f:74-76,1o1). Uncertain as they are, MPWwn eonmittee overlooked the completion of any projects other than the first phase of the Jonglei cairal in aII its scenarios. projections nraaL by LMp (r,Mp 1986:5-G), and, subsequently, those of LMp had the same fate. Though the committee's tendency is supported by rear rife experience and by the on-going contlicts, it is not uirrealistic to b9 optiuristic about the compietion of air upper Nile projects by the year 2025. This optimistic attitude is-Lased on i number ot factors: a) improvement in the rerationship between Egypt and most of the NiIe basin countries, b) the continuing coopdiition among Nile basin countries since Lg67 to implemeit a comprehensivi hydrometeororogical survey for the Nile uaLin (Ezzat. and buf Lgg3, ,

laEarlier, the L929 agreement provided the Sudan and Egypt with 4.5 and 47 .5 BCM; respectively. 26 c) available time span is long enough to negotiate and implernent those projects, and d) the surviving ITNDUGU which Inga-Aswan electrical connection is an outcome (Henery and Androsov 1989:3). Cooperation in the area of hydroelectric power would eventually lead to cooperation in the area of water management. Neverthelessr dS not all the ITNDUGU members are NiIe basin countries, special arrangements have to be negotiated outside TTNDUGU (ECArrN L992'.) . Assuming Upper Nile projects yield get equally split between Egypt and the Sudan, these projects, if Text Box Upper Ni }e Lmplemented, brings Egyptrs share Projects. of the Nile water up by 9 BCM as shown in scenario Y.

Figure 3: Decreasing trend of the Nilers annual natural yield.

III.D.1.c. . Taking an optimistic extreme can only be balanced by explor a pessimistic one as well. ft is known that the annual river yield fluctuates significantly from a 27 year to another depending on the rainfall in the upper NiIe basin. Data of the annual river yield over 116 years suggests a decreasing trend over time.rs Another study of the same series took'the percentage of long-term mean as a reference point. It showed that the river flow was high during the period 1871-1905, less than the long-term mean during 1905-1965, and significantty lower during the post-197o period (Abu-Zeid and Biswas, L99Ll. A third proposition suggested that river flows during the post-197o period is a reoccurrence of dry conditions prevailed in the 19th (Biswas 1991t7o,721. These ideas are in agreement with a proposition that a climatological change is shifting rainfall in the upper Nile region to the south (Hulme 1990!59). If that trend is accepted, the Nile's water may drop to 50.25 BCM by the year 2025.

III.D.1.d. frrLgation efficienay. The average cost of obtaining an increnent of one BCM vLa upper Nile projects is estimated at tE 3oo-35o million (Abu Zeid 1992:8). Such high cost makes other ways such as improving irrigation efficiency. current irrigation efficiency is in the vicinity of 558 with some field studies estimating it as low as 438 (MPWWR 199o-c:3.3). Factors underlying the system,s 1ow efficiency are summarized in a number of studies (Abu Zeid L992r4i Abu Zeid and Rady 199L:35i IIPWWR 1991-att't-L9; MPWWR 1991-b:3.2i MPWWR 1990-a:18-19; MPWWR 199O-c: 3. 2 i DTPWWR 199O-d: 3. 3-3 . 4 ; L99O-ezL6-29; 1990-f z2O-26i 1990- g:i-ii; MPWWR 1988:IfI.4-III.5). Those factors are either the result of system's deficiency, or due to farmers behavior. With respect to the first category, the system suffers insufficient structures, poor repair and maintenance, flat canal grades, loose observation of rotation schedules, and inadequate monitoring of water leve1s, withdrawals, discharges and quality. Farmers themselves have their role in depressing the system's efficiency. Atthough the system is designed for 24-hours irrigation, farmers tend to avoid night irrigation. As a conseguence, considerable quantities of water wastefully overflow at canal ends. Besides, poor land }evellinq raises withdrawals to cover high points in the field. To make it even hrorse, inequitable water distribution induced farmers to over-irrigate as a precaution against uncertain water delivery. Moreover, negligence of clearing water courses leads to significant losses. Those losses are magnified by the misuse of canal banks which result in wldening canals cross section. Furthermore, large variations in crops

rsThe time trend presented in the figure is of the form Y=a+b&i it is not known whether the record used to plot the trend in figure t has been adjusted for silt deposit or erosion. some estimates of the slow accretiohe i regular feature of the Nile region, amount to L2-L3 cm/1OO years (Evans 1990:13). 28 coupled with land fragTmentation make it very difficult to follow a thrifty irrigation schedule. Recognizing the delicacy of the situation, ltPmrIR has been carrying out a large-scale ambitious scheme to rehabilitate the irrigation- drainage system, and to improve its management. To handle farmer- related aspects, II{PW$IR initiated ttEgypt Water Use and Management Projectrt luwUP) . t6 EWUPTs f indings hrere materialized in the Irrigation Improvement Program (IIP). IIP was originally planned to renovate local system's components, develop frrigation Advisory Service to help farmers to adopt modern wa€er managemenl techniques, and organize Water User Associations. If successfully l-mplemented, IIP is expected to raise land productivity by 3Ot and, meanwhile, makes water savings of 1O-158. If really achieved, then IIP will satisfy the charming formula: produce more using less resources. Unfortunately, IIP is progressing at a rate below the planned (Abu Zeid 1,992241. Target area is found unrealistic given the time and budget constraints (ISPAN 1990). IIP is just one component of a greater comprehensive project known as the Irrigation Management Systems Project (IMS) which hras designed to deal with both system- as well as farmer-related obstacles. IMS received a USAID contribution of 9340 million and is to be completed by September 1995. It consists, in addition to IIP (which receives 23* of the foreign fund), of a number of components: Structural Replacement project (222'), Preventive Maintenance (f-18), Main Systems Management (12t). The rest (32*l is distributed over Planning Studies and Mode1s, Professional Development, Project Preparation, Survey and Mapping, beside other components (ISPAN 1990: 1-) . IMS components which focus on improving the system itself are the Structural Replacement, and tha Preventive Maintenance/Channel projects. They are directed to the rehabilitation of small and medium structures, and the reduction of maintenance cost through improved management. The Main Systems Management component aims at building an information system (e.9. telemetry, data management,... ) to support critical decision making, To utilize the collected information, the Planning Studies and Models component has been designed to support modeling efforts with the assistance of the U.S. Bureau of Reclamation to forecast the inflows to Lake Nasser, to estimate irrigation demands and return flows, and to assign the demands to canals (ISPAN 1990:15-19).

t6EwUP started in 1976 with a UsAID fund of $13 rnillion and was eompleted in 1985. Its purpose was to develop and demonstrate replicable farm water management practices which raises system's efficiency and, at the same time, boosts agriculture growth. It was carried out in three different regions (USAID 198?:46). 29 Given the above efforts, scenario A assumed that irrigati'on wirl improve to 75t by the y,!ar 2025. Hence, irrigatlgl- "iii"i"""y from }g.t BcM to a1.S B-M naking a saving of 6 BcM "["""-aio[s(12t). Scenario B takes the other extreme alsumingr no change in field irrigation efficiency on the ground that socio-economic constraints ,iii impede ani irptor"*e--nts. As sueh, irrigation requirem"nt ,iii stiy at iis culrent level. Scenario C takes a middle gro,rnd, irrigation efficiency will reach 65t' Thus, l-rrigation r"qlfrl*""i- will drop to- eZ.e BCM makingr a saving of f€ is worttr ,"r,tiotritg that water savings-in scenarios only 3 BC!,t. of rrP ;'-'"";7---"r"-ual"a "i trr" furt imprenentation III.D.1.€. Aduifer water. Generally, Egyptla.n aquifers. are l9t rechargeab1e.@[Ga1Iy,theyarespieadinfiveregionsith9 Desert, thl dast"tn-b!="it, Sinai, the North Western Coast Western preliminary estimates of safe and the Red Sea Coast. The fT9' withdrawals are-not confirured and fluctuate drastically "T: source to anoiher. The capacity of the Western Des-ert aquifer Ls BCIi{ (6,fu Zifa and Rady and Abu Zeid estimated at ao,OOO -ZeLd'1991:10- and Biswas Lggz-b; with salinity or zoo-ioo ppm-ZaO qlr., Lggz-b 1991:38-40); estimate is BCM which allows an annual extraction up"""itt"r to 2.59 BCI,{ *n11" it-is curi"nify at 1'58 nillion mr iid;i= and NLur leeo). The Eastern desert test wells resulted in an artisian flow ranging from 6s-2ooo ;r-d"y ,itn salinity of 150o-2000 ppm (Idris and Nour leeo) In North sinai, reasonable groundwatel iq found in wadi EI-Qaa'-.An estimate of the pres".,t is about 5'5 million ,ilG". lraiis ani Nour r-eeoj."clrii Nevlrthel?==,""pf"itation quality deterioration is encounterea--int" Zeia 1.6gZ-nzS and Abu Zeid and Rady 199L:12- i5l.---i" s""it di""i;-"q"if"i ,.t"t is found at a limited scale' The North l{estern coastal aquifer is rechargeg nV rai.n fal1 (90-250 rnn/year). To protect the a'quifer_from seawater contamination the optinal not e1^ce.ed 50 $l^*on m3 (Idris and Nour"rrrrrrut-l"pi"it"Ii""'=tt""ld 1990t.- tiri"ity ranges from 2ooq to reach.9o.0o ppp-close to the sea (iUu Zeid fgbz-n:-s) . The Red Sea coastal aquifer is rather limited (Idris and Nour 1990) At the national level, officialiairl estimates aclimatpa of the annualannua extraction ii", itt 1990 is O-.S BCM which is assumed to rise 5 folds by the"g"if"r" year 2OOO, then by 7 tines by 2025 in scenarios A'Ci -that i"t" i; also quoted i. scenario Y. Howeverr. scenario accornrnodated the lossibility -Jf that the rate of extraction reverts.to that of 199O level because withdrawals. This is-quite p"="ill" ,ittr the lack of knowledge"*""=sive concerning th9 s3f. yields of [t"""-iq"ii.i" and the arsence of regulating institutions' 30 Before concluding this section, a number of crucial questions have to be emphasized: * The economic safe yield that supports an economic activity for the longest possibl-e time need to be determined. The importante of tnis kind of Lnformation emanates from the fact that the long-term heavy investment needed in desert farming requires securing a sizeable stream of positive net benefits in order to assure its feasibility. The lack of such information boosts the risk involved in such investments. another vital concern is the depth of extraction. This variable directly affects the cost of energy required to lift water. Energry cost, by its turn, influences the irrigation cost significantly and, subsequently, the feasibility of aquifer-dependent desert farming. Given L979 economic energy prices, Lt was found that the cost of energy required to lift water more than 2O meters renders land reclamation projects infeasible (Pacific Consultants 1980).17

Table 11: River flow at HAD and water discharged to the sea. IfI.D.1.f. Reuse of dral.naqe water. Another source for increasing available water is more reuse of drainage water. While about L2 BCM were discharged in the sea (Abu Zeid L99?-bz6l, only 2.8 BCM were reused in 1989 (Abu Zeid 1989:33). This quantity rose to 4.7 BCM in 1990 and is expected to reach 7 BCM by the year 2OOO, then to 8 BClt by the year 2025 according to scenario 8. Hohrever, the

l?such conclusion need to be reconsidered in the light of the present price levels in both input and output markets. 31 other two scenarios almost assumes no increase in reused drainage water above 1990 level!. The limitations the committee put on the reuse of drainage water.in the other two scenarios may be-understood knowing that the salinity of drainage water ranges from 1OO0 to TOOO ppm and F_\"t neither trigniy ;"i-i.r" nor se$rage-contaminated drainage water will be reused (Abu Zeid L992-bz7-8) . According to 1990 budget, the total drainage watar is L8.2 BCM;1t it reprelents about orie third the Nile's water. The total amount of ariir,age water depends on: the magnitude released at HAD, tl': pi"""iiirr{ pattern, and the Jystem's efficiency (Abu Zeid iggZ-f). The".opping Linount of reuled drainage water is qoverned by: * the quality of drainage water. Salinity of drainage water is indiiectty related to its quantity. Hencer. system's improvemeirt will raise its effiLiency atd, .neanwhile, reduce tha quantity as welL as the quality of drainage water. * the availability of fresh water to dilute the amount of drainage *it".- fo re reused, * the availability of funds to build the pumping stations required to liff and mi-x drainage water plus other opgrltiltg costs. That brings up another point, the Lconomic feasibility of investing in ieusing drainage water as well as the long- term impact on the environment- * the amount of drainage water which must be released to the sea to leach the salts coming in the Delta region (Abu Zeid L992:6-9) . None of the formal scenarios provided the quantity of water need to be discharged in the see for Lechnical consideratf-on (leaching and prevention of salt intrusion). Drainage requirement has been included in scenarios Y and Z on the ground that it should not be less than 10 BcM.le III.D.1.g. eroundwater. This term refers to the Valley^and !lr" Delta shallow re.servoir which is recharged by seepage from the irrigation-drainage system. A study by the Research Institute for erouidwater indicites-the presence of i high capacity reservoir of 5OO BCM with average satinlty of 8OO ppm underlie the Nile valley

It13.5 BCM is discharged j-nto the Mediterranean Sea and Northein laXes plus 4.7 BCM-reused drainage water re1otal drainage water is egtimated at 18 BCl,t, maximum recycled water given Ln the committee gcdnarloe iE 8 BClt. It ls, hence, assumed that the rest muEt be discharged into the eea. 32 and delta. The current annual rate of extraction of groundwater for all uses is estimated at 2.6 BcIt{. This can be increased to 4 - 9 BCM which is believed to be equdl to the rate of recharge (Bisuas 199r.:38) . An interesting feature of the extraction of groundwater is that it generates a p-ositive externality in the form of reduction in the level of water table. Hence, solvinq nrater logging problems (UF'F. 1988:14 and Biswas 1991:38): Nevertheless, the conjunctive use question may represent a negative externality. As pointed out, the Jhaltow reservoir dependi mainly on the seepage from the irrigration-drainage system, withdiawal from that reservoir may rais6 seepage fufther-. ft seems that this issue has not been studied yet. Since the available information does not provj-de a ground to make variations from the committee's scenarios, the highest and lowest values of the committee,s scenarios are adopted in scenarios Y and Zi in order. III.D.1.h. Recyclincr sewage water. The reuse of treated Cairo sewage watei was initiatea in 1915 in the eastern desert to cultivate 2,5OO feddans (Biswas 1991246). Recycled sewage water may reactr 2.5 BCI'{ pendingt upon the completion of sewage treatment plints in Cairo lits capaclty is expected to reach 1.93 BCM by iorO), Alexandria (2.2 BclM), aia tne rLst 9f the country which will produce up to 4.9 BCM (Abil'Zeid Lggzill .20 Ttris potential Fou-rce is not co-nsidered in tire committee's scenarios!. Hence, it has been added to scenario Y. In scenario Z, the 1990 level is kept unchanged. A couple of advantages is associated with the use of properly treated wastewater. first, it contains fertilizers like nitrogen, phosphorous and potassium, as well as some micronutrients. Hence, Lt is generally more useful for irrigation than fresh water. Second, dried siudge can effectively be used as a soil c-onditioner for agricultural iand; during 1986-8.9 about 46, OO0 rn3 of dried sludge was soLd at LB 138 thousand (Biswas 1991:47'491 .

III. D.2 . TTATER NEEDS Within Egypt, water is distributed and drained through a complex network. - as a consequence, there j-s a time 1ag of 1O days between

mTh""" add up to 9 BCM. Compared wlth the proJection of municJ-pal and industrial uees ranging from 9.6 to 14.6 BCM, lnduetrial uee which is returned directly to the syet-em presumably treated will range from O.6-5.6 BcM by the year 2025. In either caee munLclpal consumptive component le zeroll. 33 $rater release from the High Aswan Dam and the main drainage outlets. The time lag-require fimits the system's responsiveness to unexpected changes that irnmediate changJe in water release at points of control. Water needs include irrigation of old- and new-Iand, munieipal and industrial uses, non-consumptive uses for navigation and for power generation. III.D.2.a. Irrigation: OLdl f,and. The estimation of -per-feddan ,"t"t requiremerit-pattern, is complex issue. It differs according to.the cropping soil tfipe, weather, irrigation technique . . .9tc. IiIo wonaeJtfren to find slores of estimates some of which are shown in table 12. Old-land water requirements range from 67U.0 to 93OO ;tif;dd;lnat of the new-Iand ringes from 42oo to 112oo #7feaaan. For the general purpose-at of this pafer, average wale-r:equirelen_t_i1 arbitrarlly taken SOOO m3Tfeddan in the o1d-land and TOOO ,?r"aa"r, fn the new land Water saving resulting from old-land encroachment has not been considered 6V the cor,imitte". Assuming a moderate estimate of annual encroachment of 3O thousand feddans (Biswas 1991:18-19) and given an average water requirement of SOOO m3Tfeddan, encroachment i"r"" 24O nilllon m'7year.- This saving is cumulative; i.e. total annual saving reaches g.4 BCM by the year 2025. Hence, old-land iiiig;ti"" fequirenent would take a downward trend even if etfi6iency doei not change. AecordinglY, the o1d;land irrigation requirem"irt wift drop to ls.1 Bcl{ if irrigation efficiency improves to 75* or will fall to 41.3 BCM if it stays at 55*. Nevertheless, such savings cannot be realized unless the p}anned control improvements are achieved. Projects such as the Nile telemetry, stiuctural Replacement, and the Preventive Maintenance/Channel along with conlinuous surveying are necessary to practice effective control over water flow in various canals. 34

taUfe rz: nvapotranspiration estimates'

III.D.2.b. IrrLgation: New Land. LMP estirnates total reclaimable Iand at 3428 thousand feddans. of this area, 977 thousand feddans have been reclaimed by 1990. The remainder is, ttrus, 2457- thousand feddans still--[" t"'reclaimed. If the current annual rate of reclamation of 150 thousand- i"aa.t= is sustained, this area will about 17 years to re reclaimed. Given an average water requirement ]i;jg;'r,CE"Ja"r,, tt" ir.iqation iequiremenr for that area is about L7 BCM.

III.D. 2.c. ttunicipal and hitustrl,al Uses. .Based .on.ex-trapolat-ion of the WMP (1980-;) survey, industrial use is estimated at 4'5 BCI'{ in fsgo (Abri Zeid Lgg2:O).' Municipal_and industrial uses together are expected to rise above L990 lLvel by 25-9OZ depending on the adoptei assumptions (Abu Zeid Lgg|z62i Bisttras 1991t42, ^451.' Witit respect C" r""i"ipaf use, it is assumed that the efficiency of the use of potibie w"tLr will rise from the present 5OB to rise to 35 9ot in scenario A,i" to 8ot in scenario C whereas it will stay unaltered in Scenario 8. Taking the current Ievel of municipal use at 3.1 BCM; SOt loss means wasting another 3.1 BCM. Reducing waste to 20* means that consumptive use is raised to 4.96 BCM ott equivalently, 1.86 BCM increase in municipal consumptive use. That rate of increase was 0.5 BCM/year during the period 1988-90. If this rate continues, then by the year 2025 municipal consumptive use would be 17.5 BCM. As for the municipal use, it needs some elaboration. fn 199o, lt was 3.1 BcM. Given sot loss means that another 3.1 BcI{ is lost (back to the system). The rate of increase in that use was O.5 ricr'rTyear during 1984-90. If this rate is adopted; it reaches 2o.6 BCM in 2025. fncrease in municipat use is because of population increase, income increase, hygienic awareness, rise in the number of potable water taps in rural regions.

If I . D. 2 . d. Ilon-consumBtive Uses: t{avigatiou and Eydroelectrl.c Power. By the year 2OOO, water release especially made for non- consumptive uses will be minimized. Navigational water requirement is expected to drop to O.3 BCIII by better control of the Nile water level as a consequence of the construction the Esna Barrage (Biswas 1991:45). I{ater for the generation of hydroelectric power will be

, rii. g .-porrr cr u{PL r cAt[ r oNs The discussion of MPWWR,s scenarios led to the presentation of two other scenarios representing two different extremes. The optimistic extreme suggests a water surplus of about 35 BCI,{. The importance of that extreme is to hiqhlight potential means for easing water bottlenecks. The issues related to the pessimistic extreme (a shortage of 3 BCI,I) are more intriguing. For centuries, structural works have been the main policy tool to handle the problem of allocating scarce water among its uses. To Egypt this option can not work alone anymore especially that central control of water resources and enforced rationing is in direct conflict with the liberaL economic environment Egypt is actively advancing to. More reliance on nonstructural measuies in general and economic tools in particular would be a right option.

zlAnother estl"mate of distributlon rraete iE 60* which La expected to drop to 3O* (Negm L9922491. 36 I{hen a resource is scarce, an a narket economic-"-;;;;-# solution is obtained through mechanism. artnbuftr another of water has been rried r-n some iira -i"gi;;il markets stirl tremendous i,'"o (n.rrrttn ei ar. le'e), difficurties ii;;i;;' a-u-e (a) the diff applying margr-nar-cost pricinj --(-H#i;dahr'_ro _ - icupy of saunders and l{arford Lg7ir, (bi lna iri"""" Le74; (Young 1996).. itserf Fortunatery, an array"iriii"i"ri"tic"'or'r.t", of options is avairabre that avoids those obstacres. rh'ey depend t- ln"-p-"ii"ipi"l"lr,,"..fting institutions, ana aJoptiirg-itr" motivation (o9t599" -{trou.z.am_rsss1[.JI;'; of incentives, and serf- rg6r, . some rear rire exampres incrude the carifornia'orougnt rmertlncy water conservation (reirer ;i';i: Bank, and lfater management tranlfer.Ag_reeme:rts (xhouzin Lss2) in addition to rss11 ""a-i"=t recovery approaches. 37

IV. RECOMI,IENDATIONS The discussions made in the above parts yield a number of recommendations which are presented hereinafter: 1. If first things to come first, any effort to draw a land-water strategy for Lhe coming century must start with studying the Iessons- of the history. This has not been taken seriously. Recent studies concluded that drainage is one of the factors inrpeding development in both the new and the old land. This is-not new newsi more than eighty years ago same findings hrere reached: one study stated that the introduction of crop rotation and perennial irrigatJ-on resulted in the rise of water table in the niddle delta from 6-8 meters at the beginning of the 19th century to 3-4 meters in 1886-87 and to 1 meter in 19OB (Richards L9A2z72-74; after Crouchley 1938:157-160). Another study quoted Nubar Pasha: rr.-. it would be more difficult to drain the water off the land than to pour the water over the land...rr and that rrlrrigation without drainage always tends to injure the soil...rr (Richards l,g82:78 after Hollings L917:175). A century strategy has to start by putting a guideline based on a historical iich experienee in o1d-land cultivation, new Iand reclamatLon and intensive concrete background in water managernent. Repeating the mistakes of the past is very costly.

2. Imninently, extreme attention must be paid to the introduction of collective management and self-reliance to land-water users. Over decades of socialist system, an individual has qrrown depending on the government to come to the rescue for day-to-day problems. The liberalization of the econolny requires invLsting in disseminating the basics of collective action and self-reliance. This has to be initiated long before the government really withdraw from private economic activities. This is especially important for farmers who, unlike businessmen, live on inherited practices.

3. Major water consumptive use is that of irrigation; hence maximization of return to water is a function of water allocation and vise versa. Development, plannJ.ng and decision making have to be taken for both resources simultaneously.

4. Uses other than irrigation are minor in quantity yet have significant impact on the quality of water returning to the system. ' 38

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