Importance of Irrigated Agriculture to the Ethiopian Economy: Capturing the direct net benefits of irrigation

This study is an attempt to quantify the actual and expected contribution ofirrigation to the Ethiopian economy for 2005/06 and 2009/10 croppingseasons using adjusted net gross margin analysis. After obtaining adjustedgross margin values for rain-fed and irrigation systems under differenttypologies, irrigation’s contribution was calculated to be about 5.7 and2.5 percent to agricultural and overall GDP during the 2005/06 croppingseason. By the year 2009/2010, irrigation’s contribution to agriculturaland overall GDP is estimated to grow to about 9 and 3.7 percent,respectively. After relaxing some of the underlying assumptions, the futurecontribution of irrigation to agricultural GDP will rise to about 12 percent while the contribution to overall GDP will be about 4 percent. Recommendations for enhancing irrigation’s contribution and policy implications for cost recovery and sustainability of irrigation investment are drawn.