Value of Irrigation Water in Guadalquivir Basin (Spain) by Residual Value Method

This paper presents an application of residual value techniques to the economic analysis of irrigation water at the basin level for the Guadalquivir River (Southern Spain). The methodology is simple; the results are robust and consistent with alternative method findings. The average residual value in the basin is 0.31 €/m³ and according to the to Residual Value Method, the distribution of total Gross Value Added (GVA) of irrigated land is distributed between the different factors of production as follows: (i) water, 62% of GVA; (ii) land, 20% GVA (from rain-fed productivity), (iii) return to man-made capital, 5% GVA; and finally (iv) the pair ‘management + family-labour’ gets 13% of total irrigation GVA. The paper illustrates the use of this method for the whole basin and it shows that it may offer promise for supporting sustainable water management at the basin (or the local) scale. It may be used for the implementation of the Water Framework Directive.