Iowa State University Capstones, Theses and Retrospective Theses and Dissertations Dissertations 1976 An evaluation of water resource developments in Guyana: with application to selected drainage and irrigation projects Ashton Isardatt eV ramallay Iowa State University Follow this and additional works at: https://lib.dr.iastate.edu/rtd Part of the Economics Commons Recommended Citation Veramallay, Ashton Isardatt, "An evaluation of water resource developments in Guyana: with application to selected drainage and irrigation projects " (1976). Retrospective Theses and Dissertations. 5715. https://lib.dr.iastate.edu/rtd/5715 This Dissertation is brought to you for free and open access by the Iowa State University Capstones, Theses and Dissertations at Iowa State University Digital Repository. It has been accepted for inclusion in Retrospective Theses and Dissertations by an authorized administrator of Iowa State University Digital Repository. 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Silver prints of "photographs" may be ordered at additional charge by writing the Order Department, giving the catalog number, title, author and specific pages you wish reproduced. 5. PLEASE NOTE: Some pages may have indistinct print. Filmed as received. Xerox University Microfilms 300 North Zeeb Road Ann Arbor, Michigan 48106 77-1490 VERAHALLAY, A&hton Isardatt, 1940"^ AN EVALUATION OF WATER RESOURCE DEVELOP­ MENTS IN GUYANA; WITH APPLICATION TO SELECTED DRAINAGE AND IRRIGATION PROJECTS. Iowa State University, Ph.D., 1976 Economics, general Xerox University Microfilms, Ann Arbor, Michigan 48106 An evaluation of water resource developments in Guyana; With application to selected drainage and irrigation projects by Ashton Isardatt Veramallay A Dissertation Submitted to the Graduate Faculty in Partial Fulfillment of The Requirements for the Degree of DOCTOR OF PHILOSOPHY Major ; Economics Â^roved: Signature was redacted for privacy. ^ Charge of Major Work Signature was redacted for privacy. For the Department Signature was redacted for privacy. For the Goffluate College Iowa State University Ames, Iowa 1976 ii TABLE OF CONTENTS Page I. INTRODUCTION 1 A. Need for Drainage and Irrigation Developments in Guyana 1 B. Problem of Evaluating Drainage and Irrigation and Their Interrelationships 2 C. Objectives of Study 4 b. Procedures Used in Pursuing These Objectives 4 E. Concepts and Definitions 5 F. Organization of Study 8 II. THE AGRICULTURAL SECTOR WITHIN THE NATIONAL ECONOMY 10 A. Contributions of Agricultural Sector to the National Economy 11 B. Institutional Aspects of Agricultural Development 16 C. Importance of Water Resource Institutions to the Agricultural Sector 20 D. Agrarian Reform Within the Agricultural Sector 26 E. Water Resource Improvements Within Agrarian Reform 31 F. Role of Drainage and Irrigation in the Agricultural Sector 32 III. INVESTMENT CRITERIA FOR PROJECT EVALUATION 34 A. Development Strategy 35 B. Investment Criteria 39 C. Market Imperfections in Developing Economies 52 n i A va 4* *1 c 4 m or#*" 1 6A iii Page IV. MAJOR DRAINAGE AND IRRIGATION PROJECTS IN GUYANA 69 A. Evolution of Drainage and Irrigation in Guyana 78 B. Nature and Location of Major Drainage and Irrigation ' Projects 82 C. Constraints on Economic Use of Land in Existing Project Areas 106 V. APPLICATION OF INVESTMENT CRITERIA TO SELECTED DRAINAGE AND IRRIGATION PROJECTS IN GUYANA 109 A. Project Feasibility Studies 110 B. Benefit-Cost Analysis of the Projects 135 C. Internal Rate of Return 159 D. Social Marginal Productivity of Investment in Drainage and Irrigation Projects 161 E. Sensitivity Analysis 170 F. MacroeGonorrdc Analysis 190 VI. INVESTMENT PLANNING AT THE NATIONAL, SECTORAL AND PROJECT LEVELS 207 A. Guyanese National and Sectoral Objectives 208 B. Project Priorities and the Macroeconomic Objectives 218 C. Project Selection and the Investment Program 226 VIII. SUMMARY, CONCLUSIONS AND RECOMMENDATIONS 229 A. Summary 229 B. Conclusions 234 C. Recommendations 240 iv Page VIII. LITERATURE CITED 250 IX. ACKNOWLEDGMENTS 259 X. APPENDIX A: IMPORTS OF SOME SELECTED AGRICULTURAL COMMODITIES WHICH CAN BE PRODUCED IN GUYANA OR FOR WHICH SUBSTITUTES CAN BE HAD, 1966 TO 1970 262 XI. APPENDIX B: CROP WATER REQUIREMENTS 265 XII. APPENDIX C; PROJECTED CASH PLOW OF BENEFITS AND COSTS AND PAYMENT CAPACITY ANALYSIS OF FARMS 284 V V LIST OF TABLES Table Page 1. Gross domestic product at constant factor cost 1960- 1974 12 2. Value of exports and imports 1964-1975 23 3. Summary of estimates and expenditures for drainage and irrigation areas excluding special rate areas, 1972-1975 74 4. Income and expenditure on drainage and irrigation, 1960- 1974 81 5. Summary of construction and operation costs for Tapakuma project 88 6. Summary of construction and operation costs for Black Bush project 93 7. Estimated cost of headworks for Stage I of the Mahaica- Mahaicony-Abary project 98 8. Estimated capital cost of Stage I of the Mahaica- Mahaicony-Abary project 99 9. Estimated capital cost of Canje project ' 104 10. Acreages and costs of drainage and irrigation projects 123 11: Projected increase in income with and without project- 126 12. Foreign exchange costs and earnings as a proportion of project costs and returns 139 13. Discounted benefits and costs of projects in thousand Guyana dollars and benefit-cost ratios at alternative interest rates 141 14. Project ranking by benefit-cost ratios at alternative interest rates 145 15. Comparison of benefit-cost ratios at market and shadow wage and foreign exchange prices and at alternative interest rates 148 16. Sugar production, area and yields for 1965-1975 153 vi Table Page 17. Sugar exports and prices for 1965-1975 154 18. Rice production, area and yields for 1965-1975 156 19. Rice e:gorts and prices for 1965-1975 157 20. Internal rates of return and benefit-cost ratios of drainage and irrigation projects at market prices 161 21. Basic data for the calculation of the social marginal productivity of investment in drainage and irrigation projects 165 22. Social marginal productivity of investment by components in drainage and irrigation projects 167 23. Social marginal productivity of investment by components in drainage and irrigation projects 167 24. Social marginal productivity of investment by components in drainage and irrigation projects l&9a 25. Social marginal productivity of investment by components in drainage and irrigation projects 169b 26. Benefit, cost and transfer flows at market prices, Tapakuma project 192 27. Benefit, cost and transfer flows at market prices. Black Bush project 194 28. Benefit, cost and transfer flows at market prices, Mahaica-Mahaicony-Abary project 196 29. Benefit, cost and transfer flows at market prices, Canje project 199 30. Investment criteria values and ordinal rankings, drainage and irrigation projects 213 31. Investment criteria component values and ordinal rankings, drainage and irrigation projects 215 Grdxnâi project rankings by macroeconomic objectives and cardinal measures of projects' contributions to macro- economic objectives 222 vii Table Page 33. Alternative preference weights of the inarcoeconomic objectives 223 34. Project priorities under alternative preference weights of the macroeconomic objectives, ordinal and cardinal . methods 224 Al. Imports of some selected agricultural commodities which can be produced in Guyana or for which substi­ tutes can he had, 1966 to 1970 263 Bl. Consumptive use factors and climatic coefficients, Tapakuma area 266 B2. Irrigation requirements for double cropped paddy, Tapakuma area 267 B3. Irrigation requirements for vegetables and pasture, Tapakuma area 268 B4. Irrigation requirements for tree crops, Tapakuma area 269 B5. Consumptive use factors and climatic coefficients, Black Bush area 270 B5. Irrigation requirements for double cropped paddy, Black Bush area 271 B7. Irrigation requirements for