THE IMPACT OF AN IRRIGATION PROJECT ON LABOR INTENSITY AND THE DISTRIBUTION OF INCOME: THE CASE OF THE SIBALOM IRRIGATION PROJECT IN ILOILO, PHILIPPINES

MARIETTA SAMSON ADRIANO, Purdue University

Abstract

Increasing attention is being focused on the equity issue in the Philippines, with expressions of concern that technological change brought about by irrigation may contribute to an increased concentration of income. To the extent that irrigation infrastructure projects in the Philippines are funded with public funds, they can have a pervasive effect on the distribution of income. The specific objectives of this study are: (1) to develop a conceptual framework with which the distribution of benefits from an irrigation project may be analyzed; (2) to analyze empirically the effect of a particular irrigation project on the distribution of income among economic agents affected by it; and (3) to draw policy implications from the empirical results obtained. Conventional neoclassical theory is used as the basis for developing a broad conceptual framework in understanding the impacts of an irrigation project on the distribution of income and on labor intensity. Making use of primary and secondary data, the main thrust of the research was focused on the effects of irrigation on the rice production system, on factor shares, and on labor use. Policy implications are drawn from the empirical results. The study was conducted in Iloilo, Philippines, on the riceland farms of 45 farmer-cooperators over a three-year period. The research used the data of the farm households collected by the International Rice Research Institute. All 45 farms were rainfed in 1975-76, 15 became irrigated in 1976-77, and the irrigation system served 24 of the 45 farms in 1977-78. The research showed that irrigation effectively increases the supply of land services. The availability of water allows farmers to plant a second crop, thereby increasing cropping intensity. Irrigation is complementary to the new rice technology, with substantial increases in the use of modern rice varieties and fertilizer use. As expected, the rice yields on irrigated plots are significantly greater than the rice yields on rainfed plots. By means of an accounting procedure, irrigated farms registered substantial increases in absolute income shares accruing to the landlord, hired labor, farmer-operator, and current inputs, except in the income share accruing to the landlord on leased farms. Leased rental rates to land have remained the same since 1972 due to government regulations. The relative income shares accruing to current inputs increased on irrigated farms. The increase in the relative share of the operators on leased farms was associated with a corresponding decrease in the relative share of the landlords. Decreases in the relative income shares of hired labor were observed on irrigated farms under all tenure statuses. With the use of a CES production function, the income of labor relative to capital in irrigated farms, was found to be lower than in rainfed farms. The study showed no significant differences in total labor utilization between rainfed and irrigated farms. In terms of labor use for rice production alone, hired labor was the biggest source of labor, while exchange labor provided the smallest labor component. A breakdown of labor use by operation and source for rice production showed no substantial changes in hired labor and exchange labor inputs on either irrigated or rainfed farms. Operator and family labor inputs on rainfed farms decreased significantly over time in all operations for rice production, while only operator labor input decreased substantially in irrigated farms. The increases in absolute income shares accruing to the farmers and hired laborers on irrigated farms are rather substantial; although in terms of relative shares, their shares on irrigated farms are less than those on rainfed farms. Thus, benefits from the increase in rice output are not evenly distributed among the direct participants of production.

Degree

Ph.D.

Subject Area

Agricultural economics

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