THE IMPACT OF IRRIGATION DEVELOPMENT ON RICE PRODUCTION IN LAMPUNG PROVINCE

Wan Abbas Zakaria Dyah Aring H.L.

Yaktiworo Indriani

University of Lampung Bandar Lampung

June, 2004

Table of Contents

Background and Policy Issues.............................................................................................3

Research Methods ................................................................................................................3

Analysis and Results.............................................................................................................3

Input-Output Analysis.........................................................................................................3

Private Revenues and Costs ...............................................................................................6

Components ........................................................................................................................6

Social Revenues and Costs .................................................................................................9

Irrigated Rice....................................................................................................................11

Competitiveness and Efficiency.........................................................................................12

Conclusions .........................................................................................................................14

References ...........................................................................................................................15

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Summary

The Indonesian Government seeks to raise rice production by increasing irrigation. Irrigation infrastructure is being expanded in Lampung Province. This study examines the competitiveness (private profitability) of irrigated and rainfed rice production in Lampung.

According to the results of the study, carried out using the PAM methodology, rice production was competitive in both the irrigated and rainfed farming systems during both the wet and dry seasons. Rice production in the irrigated system had much higher competitiveness than that in the rainfed system.

The social returns to management and land (social profitability) of rice production in the irrigated system during both wet and dry seasons were about half of social revenues. The comparable returns in the rainfed system during the wet season were about one-third of social revenues, and those in the rainfed system during the (drought-affected) dry season were negative. But no conclusions can be drawn about efficiency until it is possible to make estimates of the social value of land used to grow rice during a year of normal rainfall.

The development of irrigation infrastructure could increase the productivity and competitiveness of rice farming. But no firm conclusions can be drawn from the results of this study about whether public investment in additional irrigation in Lampung Province is efficient. A complete benefit-cost analysis of irrigation investment in Lampung would require estimates of the social opportunity cost of land used for rice production in normal weather years and information on the investment and maintenance costs of the additional irrigation infrastructure.

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Background and Policy Issues

The Indonesian Government seeks to raise rice production by increasing irrigation. Irrigation infrastructure is being expanded in Lampung Province. This study examines the competitiveness (private profitability) of irrigated and rainfed rice production in Lampung. In Lampung Province, rice is produced in an irrigated production system (padi sawah) and in a rainfed farming system (padi sawah tadah hujan/gogo). The productivity of rainfed rice farming is lower than that of wetland rice farming. But the technology and yields of both rainfed and wetland rice farming were similar before the introduction of irrigation. Hence, the benefits of irrigation can be approximated by estimating the increases in profits that can be achieved through the introduction of irrigation in the rice-farming areas. The objective of this research, therefore, is to analyze the impact of irrigation development on the competitiveness of rice production systems in Lampung Province.

Research Methods

This study employs the Policy Analysis Matrix approach (PAM) to analyze the competitiveness of rainfed and irrigated rice production systems. The first task was to choose representative rice farming systems and study sites. The four principal rice-producing regencies in Lampung Province are Tanggamus, Central Lampung, South Lampung, and East Lampung. The research study was conducted in Central Lampung regency because both rice production (361,007 tons/year) and harvested area (81,747 ha)1 in this area was higher than those in other three regencies. Two villages – Sumber Rejo, Kota Gajah and Binjai Agung, Bekri – were selected to represent irrigated and rainfed rice production systems, respectively.2 Sixty households, chosen randomly – thirty in each village – were interviewed. The data used in this study were obtained from two sources – household surveys (primary data) and publications of government agencies, e.g., BPS (secondary data). Secondary data provided information on policies, foreign exchange rates, and other macroeconomic data. The household survey was employed to collect budgetary data on revenues, costs, and profits at the farm-gate level.

Analysis and Results

Input-Output Analysis

The primary aim of the development of irrigation infrastructure in Lampung (and throughout Indonesia) is to raise rice production through increasing the controlled supply of irrigated water. The increase of cultivated area under a regular water supply improves rice

1 Badan Pusat Statistik Propinsi Lampung, 2001 2 Badan Pusat Statistik Kabupaten Lampung Tengah, 2002

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yields. The impact of irrigation development on rice production technologies, described by input-output coefficients, during both wet and dry seasons is shown in Table 1. The highest productivity (yield) of rice was 5.12 ton gkg/ha (gabah kering giling or unhulled dried rice per hectare) in the technical irrigated system during the wet season. In contrast, the lowest productivity of rice was 2.03 ton gkg/ha in the rainfed system during the dry season I (first dry season). The degree of water control and the intensity of input use (described in Table 1) accounted for most of this yield difference. In addition, the yield in the dry season was unusually low because of drought in 2003. In the technical irrigation system, the irrigation channels were complete and usable, whereas there was no irrigation channel in the rainfed system. Therefore, the security of water supply of the technical irrigated rice farms was much better and more sustainable. Seed use and transplanting labor cost in the irrigated system was lower than in the rainfed system because there was less need for replanting. Farmers growing irrigated rice used more chemical fertilizers and pesticides than did farmers growing rainfed rice, because the more secure water supply allowed greater effectiveness of chemicals and thus provided higher yields. The labor intensity in the rainfed farming system was higher than that in the irrigated farming system, especially in land and nursery preparation and transplanting of seedlings. Because of the instability of water supply, he rainfed farmers had to replant more than the irrigated farmers did. Some farmers used portable water pumps to solve the lack of water in the rainfed system during the dry season I. The pumps were equipped with about 50 meters of plastic pipe to absorb water from small lakes, which was then applied on the farms. The average water pump used 74 liters/ha/season of fuel. Since water pumps were expensive, only a few farmers used them to plant rice.

Table 1. Input-output Relationships for Rice Farming Systems (Lampung Province)

Irrigated Rice Rainfed Rice Components Wet 2003 Dry I 2003 Wet 2003 Dry I 2003

Tradable Inputs Seed (kg/ha) 35,40 45,10 42,30 47,50 Fertilizers a. Chemical Fertilizers (kg/ha)

- Urea 259,50 253,10 276,80 253,33 - TSP/SP-36 199,90 188,70 172,30 126,67 - KCl 133,10 130,90 106,50 63,33 - ZA - - - - - NPK - - - - b. Other fertilizers (pack) 1,00 1,00 - - c. Pesticide (pack) 1,00 1,00 1,00 1,00

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Table 1. Input-output Relationships for Rice Farming Systems (Lampung Province)

Irrigated Rice Rainfed Rice Components Wet 2003 Dry I 2003 Wet 2003 Dry I 2003

d. Herbicide (Pack) - - - - e. Fuel (lt/ha) - - - 74,00 Domestic Factors a. Non-Chemical Fertilizers

(pack/ha) - manure - - 34,70 19,00 b. Tractor (pack) - - - - c. Draft Animal (pack) - - - - Labor (man-days/ha) d. Nursery (DK) (md) 10,50 10,50 18,00 e. Land Preparation (LK)

(md ) 22,70 24,20

29,60 f. Transplanting of seedling

(LK) (md) 10,20 10,00

23,30 g. Crop care (DK) (md) 10,40 13,70 15,00 h. Water irrigation (DK)

(md) 2,50 2,60

5,10 i. Harvesting (LK) (pack)

(md) 1,00 1,00

1,00 j. Post harvesting (DK) (md) 4,60 7,70 3,30 - Transportation - - - - Machine - - - - k. Tax (PBB) (pack) 1,00 1,00 1,00 1,00 l. Irrigation contribution

(pack) 1,00 1,00 - - m. Other payment (pack) 1,00 1,00 1,00 - n. Equipment (pack) 1,00 1,00 1,00 1,00 o. Water pump (pack) - - - 1,00 Working capital 2.479.143,03 2.321.907,04 2.112.059,17 1.977.545,29 Land rent (ha) 1,00 1,00 1,00 1,00 Production (kg/ha) (GKG) 5.12 4.79 3.46 2.03

Notes: Working capital is cash payment per hectare/season Because the degree of water control affected the intensity of input use, the rate of

rice productivity (level of rice yields) differed across the four farming systems. The irrigated system had the highest yields – 5.12 tons of gkg/ha during the wet season and 4.79 tons of gkg/ha in the dry season. In contrast, the rainfed system generated much lower yields – 3.46 tons of gkg/ha in the wet season and only 2.03 tons of gkg/ha in the drought-affected dry season. The availability of regular irrigation water and the higher use of chemical inputs thus increased yields by half in the wet season and more than doubled yields in the dry season.

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Private Revenues and Costs

The profit of rice production was obtained by subtracting costs from revenues. In PAM analysis, profitability is calculated first in private (actual market) prices and then in social (efficiency) prices. Table 2 shows the private prices of inputs and outputs in the four rice farming systems that were studied in Lampung Province.

The irrigated farming sites were closer to the central input market and more

accessible than the rainfed farming sites. As a result, the prices of tradable inputs, such as fertilizer, were less in the irrigated system than in the rainfed system. However, the wages paid to labor were higher for the irrigated system, because laborers had somewhat easier access to off-farm jobs.

Table 2. Private Prices of Inputs and Outputs (Lampung Province – Rp/hectare)

Irrigated Rice Rainfed Rice Components Wet 2003 Dry I 2003 Wet 2003 Dry I 2003

Tradable Inputs Seed (Rp/kg) 2.554,2 2.565,5 3.000,0 3.026,7 Fertilizers a. Chemical Fertilizers (Rp/kg) - Urea 1.224,3 1.225,3 1.200,0 1.200,0 - TSP/SP-36 1.626,6 1.657,5 1.700,0 1.650,0 - KCl 1.705,7 1.695,7 1.800,0 1.800,0 - ZA - - - - - NPK - - - - b. Other fertilizers 67.041,8 66.478,5 - - c. Pesticide (Rp/pack) 138.753,0 149.000,1 127.719,1 40.666,7 d. Herbicide (Rp/Pack) - - - - e. Fuel (Rp/lt) - - - 1.650,0 Domestic Factors a. Non Chemical Fertilizers

(pack/ha) - Manure - - 6.400,8 6.166,7 Labor : a. Tractor (Rp/pack) - - - - b. Draft Animal (Rp/pack) - - - - c. Nursery (DK), mandays 13.902,2 13.898,5 10.000,0 10.000,0 d. Land Preparation (LK),

mandays 13.885,5 13.862,9 10.000,0 10.000,0 e. Transplanting of seedling (LK),

mandays 13.885,7 13.870,4 9.956,9 9.487,2 f. Crop care (DK), mandays 14.001,1 14.022,4 10.000,0 10.000,0 g. Water irrigation (DK) mandays 15.000,0 15.000,0 - - h. Harvesting (LK), mandays 692.204,1 507.514,9 420.225,0 310.115,0

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Table 2. Private Prices of Inputs and Outputs (Lampung Province – Rp/hectare)

Irrigated Rice Rainfed Rice Components Wet 2003 Dry I 2003 Wet 2003 Dry I 2003

i. Post Harvesting (DK), mandays 15.000,0 15.000,0 10.000,0 10.000,0 - Transportation - - - - - Machine - - - - f. Tax (PBB) (Rp/season) 12.047,5 12.047,5 7.558,4 7.505,0 g. Irrigation contribution

(Rp/season) 11.269,7 12.254,0 - - h. Other payment (Rp/season) 52.962,8 52.142,4 20.000,0 - i. Equipment pack (Rp/season) 87.718,6 87.718,6 64.890,9 47.461,0 j. Water pump (pack) - - - 250.000,0 Working capital 0,02 0,02 0,02 0,02 Land rent (Rp/ha) - - - - Ouput price (Rp/kg gkg) 1.457,8 1.476,1 1.439,4 1.488,4 Notes: Water pump = cost of pump rent per season

The input-coefficients reported in Table 1 were multiplied by the private prices shown in Table 2. The results for the four irrigated and rainfed farming systems are presented in Table 3.

Table 3. Private Budgets of Rice (Lampung Province - Rp/hectare)

Irrigated Rice Rainfed Rice Component Quantities

Wet 2003

Dry I 2003

Wet 2003

Dry I 2003

Tradable Inputs Seed (Rp) 90.419 115.704 126.900 143.768 Fertilizers

a. Chemical Fertilizers (Rp)

- Urea 317.706 310.123 332.160 303.996 - TSP/SP-36 325.157 312.770 292.910 209.006 - KCl 227.029 221.967 191.700 113.994 - ZA 0 0 0 0 - NPK 0 0 0 0 b. Other fertilizers 67.042 66.479 0 0 c. Pesticide (Rp) 138.753 149.000 127.719 40.667 d. Herbicide (Rp) 0 0 0 0 e. Fuel (Rp) 0 0 0 122.100 Total tradable inputs 1.166.105 1.176.043 1.071.389 811.430 Domestic factors

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Table 3. Private Budgets of Rice (Lampung Province - Rp/hectare)

Irrigated Rice Rainfed Rice Component Quantities

Wet 2003

Dry I 2003

Wet 2003

Dry I 2003

a. Non Chemical Fertilizers (Rp)

- Manure 222.108 117.167 Labor (Rp) a. Tractor 0 0 0 0 b. Draft Animal 0 0 0 0 c. Nursery 145.973 145.934 180.000 120.000 d. Land Preparation 315.201 335.482 296.000 316.700

e. Transplanting of seedling 141.634 138.704 231.996 234.334

f. Crop care 145.611 192.107 150.000 50.700 g. Water irrigation 37.500 39.000 0 0 h. Harvesting 692.204 507.515 420.225 310.115 i. Post Harvesting 69.000 115.500 33.000 38.000 - Transportation 0 0 0 0 - Machine 0 0 0 0 Total labor 1.547.124 1.474.242 1.311.221 1.069.849 f. Tax (PBB) (Rp) 12.048 12.048 7.558 7.505

g. Irrigation contribution (Rp) 11.270 12.254 0 0

h. Other payment (Rp) 52.963 52.142 20.000 0

i. Equipment pack (Rp) 87.719 87.719 64.891 47.461

j. Water pump (Rp) 0 0 0 250.000 Total other expendces 163.999 164.163 314.557 422.133 Cost of capital 99.166 92.876 84.482 79.102 Land rent (Rp) 0 0 0 0 Output Ouput price (Rp) 7.468.134 7.067.567 4.974.912 3.016.481

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Social Revenues and Costs

The efficiency of rice production is determined by profitability in social prices. Several assumptions were used in estimating the social prices of inputs and outputs shown in Table 4 and used to create Table 5. 1. The nominal private interest rate was 12 percent per year or 4 percent per season, based

on the BRI savings rate, which was the private opportunity cost for self-financed working capital (BRI Lampung, 2003).

2. The nominal social interest rate was 23.9 percent per year (15 percent for the assumed

real social opportunity cost of capital and 8.9 percent for the average rate of inflation in Lampung Province) or 7.97 percent per season.

3. The official exchange rate was the average Rp/US Dollar exchange rate from December

2002 through April 2003, Rp8,861/US $. 4. The CIF price of rice seeds was equal to twice the FOB price of Thailand rice (World

Bank Development Prospects, Commodity Price Data Pinksheet-May 2003). 5. The CIF prices of fertilizer were an average of CIF fertilizer prices from January through

December 2002 (World Bank Development Prospects, Commodity Price Data Pinksheet-May 2003).

6. The FOB price of rice was the FOB price of 25% broken Thai rice from October –

December 2002 for wet season and in April 2003 for dry season I (World Bank Development Prospects, Commodity Price Data Pinksheet-May 2003).

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Table 4. Social Prices of Inputs and Outputs (Lampung Province - Rp/hectare) Irrigated Rice Rainfed Rice Component

Prices

Wet 2003

Dry I 2003

Wet 2003

Dry I 2003

Tradable Inputs Seed (Rp/kg) 3.181 3.253 3.181 3.253 Fertilizers

a. Chemical Fertilizers (Rp/kg)

- Urea 930 930 930 930 - TSP/SP-36 1.455 1.463 1.463 1.463 - KCl 1.206 1.206 1.206 1.206 - ZA 90 90 90 90 - NPK 1.570 1.570 1.570 1.570 b. Other fertilizers 53.633 53.183 0 0 c. Pesticide (Rp/pack) 111.002 119.200 102.175 32.533 d. Herbicide (Rp/Pack) 0 0 0 0 e. Fuel (Rp/lt) 0 0 0 2.240 Domestic factors

a. Non Chemical Fertilizers (pack/ha)

- Manure 0 0 6.401 6.167 Labor a. Tractor (Rp/pack) 0 0 0 0

b. Draft Animal (Rp/pack) 0 0 0 0

c. Nursery (DK), mandays 13.902,2 13.898,5 10.000,0 10.000,0

d. Land Preparation (LK), mandays 13.885,5 13.862,9 10.000,0 10.000,0

e. Transplanting of Seedling (LK), mandays 13.885,7 13.870,4 9.956,9 9.487,2

f. Crop care (DK), mandays 14.001,1 14.022,4 10.000,0 10.000,0

g. Water irrigation (DK) mandays 15.000,0 15.000,0 - -

h. Harvesting (LK), mandays

692.204,1 507.514,9 420.225,0 310.115,0

i. Post Harvesting (DK), mandays 15.000,0 15.000,0 10.000,0 10.000,0

- Transportation 0 0 0 0 - Machine 0 0 0

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Table 4. Social Prices of Inputs and Outputs (Lampung Province - Rp/hectare) Irrigated Rice Rainfed Rice Component

Prices

Wet 2003

Dry I 2003

Wet 2003

Dry I 2003

f. Tax (PBB) (Rp/season) 12.048 12.048 7.558 7.505

g. Irrigation contribution (Rp/season) 11.270 12.254 0 0

h. Other payment (Rp/season) 52.963 52.142 20.000 0

i. Equipment pack (Rp/season) 87718,6 87718,6 64890,9 47461

j. Water pump (Rp/hr) 0 0 0 250000 Working capital 7,97% 7,97% 7,97% 7,97% Land rent (Rp/ha) 0 0 0 0 Output Ouput price (Rp/kg) 1.131 1.154 1.131 1.154

Table 5. Social Budgets (Lampung Province - Rp/hectare) Irrigated Rice Rainfed Rice

Component Quantities Wet 2003

Dry I 2003

Wet 2003 Dry I2003

Tradable Inputs Seed (Rp) 112.595 146.724 134.541 154.532 Fertilizers

a. Chemical Fertilizers (Rp)

- Urea 241.254 235.304 257.338 235.518 - TSP/SP-36 290.767 276.148 252.148 185.372 - KCl 160.580 157.926 128.488 76.405 - ZA 0 0 0 0 - NPK 0 0 0 0 b. Other fertilizers 53.633 53.183 0 0 c. Pesticide (Rp) 111.002 119.200 102.175 32.533 d. Herbicide (Rp) 0 0 0 0 e. Fuel (Rp/lt) 0 0 0 165.740 Total tradable inputs 969.832 988.485 874.690 684.360 Domestic

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Table 5. Social Budgets (Lampung Province - Rp/hectare) Irrigated Rice Rainfed Rice

Component Quantities Wet 2003

Dry I 2003

Wet 2003 Dry I2003

factors

a. Non Chemical Fertilizers (pack/ha)

- Manure 0 0 222.108 117.167 Labor (Rp) a. Tractor 0 0 0 0 b. Draft Animal 0 0 0 0 c. Nursery 145.973 145.934 180.000 120.000 d. Land Preparation 315.201 335.482 296.000 316.700

e. Transplanting of seedling 141.634 138.704 231.996 234.334

f. Crop care 145.611 192.107 150.000 50.700 g. Water irrigation 37.500 39.000 0 0 h. Harvesting 692.204 507.515 420.225 310.115 i. Post Harvesting 69.000 115.500 33.000 38.000 - Transportation 0 0 0 0 - Machine 0 0 0 0 Total labor 1.547.124 1.474.242 1.311.221 1.069.849 f. Tax (PBB) (Rp) 12.048 12.048 7.558 7.505

g. Irrigation contribution (Rp) 11.270 12.254 0 0

h. Other payment (Rp) 52.963 52.142 20.000 0

i. Equipment pack (Rp) 87.719 87.719 64.891 47.461

j. Water pump (Rp) 0 0 0 250.000 Total other expendces 163.999 164.163 314.557 422.133 Cost of capital 197.505 184.979 168.261 157.544 Land rent (Rp) 0 0 0 0 Output Ouput price (Rp) 5.792.706 5.527.104 3.908.150 2.339.507

Competitiveness and Efficiency

Table 6 reports the Policy Analysis Matrices (PAMs) for the four Lampung rice-farming systems. Because the cost of land was omitted (and profits were defined as the returns to management and land), the cost of labor constituted more than four-fifths of the measured total production cost in all systems. All four systems were privately profitable and thus could compete at actual market prices. Based on private prices, the irrigated rice production system during the wet season earned the highest profit (Rp 4.5 million per ha), while the rainfed rice production system during dry season I had the lowest profit (Rp 0.5 million per

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ha). Private profits for rice produced under the irrigation system exceeded those for rainfed rice by Rp 2.3 million per ha during the wet season and by Rp3.6 million per ha during the dry season. Farmers thus benefited greatly from public irrigation investment.

Rice production in Lampung thus was competitive, but was it also efficient? The

social profits (the returns to management and land) for irrigated rice in both wet and dry seasons were about half of social revenues. These margins provide a wide scope for paying the social opportunity costs of land used for rice production. The social returns to management and land were only about one-third of revenues for the rainfed rice system in the wet season and were negative in the dry season (in part due to the drought in the year of the study). But no conclusions can be drawn about efficiency until it is possible to make estimates of the social value of land used to grow rice during a year of normal rainfall.

Table 6. Policy Analysis Matrices (PAMs) (Lampung Province – Rp/ hectare)

Revenue Tradable Domestic Factors Profit*) Component

inputs Labor Other Exp Capital Land Total

Rice irrigation

Wet 2003

Private 7.468.134 1.166.105 1.547.124 163.999 99.166 0 1.810.288 4.491.741

Social 5.792.706 969.832 1.547.124 163.999 197.505 0 1.908.627 2.914.247

Divergences 1.675.428 196.273 0 0 -98.339 0 -98.339 1.577.494

Dry I 2003

Private 7.067.567 1.176.043 1.474.242 164.163 92.876 0 1.731.281 4.160.242

Social 5.527.104 988.485 1.474.242 164.163 184.979 0 1.823.383 2.715.236

Divergences 1.540.463 187.559 0 0 -92.102 0 -92.102 1.445.006

Rice in Dry Land

Wet 2003

Private 4.974.912 1.071.389 1.311.221 314.557 84.482 0 1.710.260 2.193.263

Social 3.908.150 874.690 1.311.221 314.557 168.261 0 1.794.039 1.239.421

Divergences 1.066.762 196.699 0 0 -83.778 0 -83.778 953.842

Dry I 2003

Private 3.016.481 933.530 1.069.849 422.133 79.102 0 1.571.084 511.866

Social 2.339.507 850.100 1.069.849 422.133 157.544 0 1.649.527 -160.120

Divergences 676.974 83.430 0 0 -78.443 0 -78.443 671.986 *) Included land rent The private revenue from rice produced in the irrigated system during the wet season, Rp 7.5 million per ha, was higher than the social revenue, Rp5.8 million per ha. The ratio of these two valuations of revenue is the Nominal Protection Coefficient on Output (NPCO). As reported in Table 7, the NPCOs for the four systems ranged between 1.27 and 1.29. This output divergence was caused by the import tariff on rice of Rp 430 per kg..

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Table 7. Protection Ratios for Four Rice Farming Systems ( Lampung Province)

Irrigated Rice Rainfed Rice No

Component

Wet 2003

Dry I 2003

Wet 2003

Dry I 2003

1 NPCO [A/E] 1,29 1,28 1,27 1,29 2 NPCI [B/F] 1,20 1,19 1,22 1,10

The private tradable input cost of rice production for the irrigated system during the wet season, Rp 1.2 million per ha, was 20 percent higher than the social tradable input cost, Rp 1.0 million per ha. The ratio of these two valuations of tradable input costs is the Nominal Protection Coefficient on Tradable Inputs (NPCI). As reported in Table 7, the NPCIs for the four systems ranged between 1.10 and 1.22. The taxes on chemical fertilizers and pesticides outweighed the small subsidy on rice seeds and kerosene. The lowest NPCI, 1.10, was in the rainfed system during the dry season. That system used fewer of the taxed tradable inputs.

Conclusions

Rice production was competitive in both the irrigated and rainfed farming systems during both the wet and dry seasons. Rice production in the irrigated system had much higher competitiveness than that in the rainfed system.

The social returns to management and land (social profitability) of rice production in the irrigated system during both wet and dry seasons were about half of social revenues. The comparable returns in the rainfed system during the wet season were about one-third of social revenues, and those in the rainfed system during the (drought-affected) dry season were negative. But no conclusions can be drawn about efficiency until it is possible to make estimates of the social value of land used to grow rice during a year of normal rainfall.

The development of irrigation infrastructure could increase the productivity and competitiveness of rice farming. But no firm conclusions can be drawn from the results of this study about whether public investment in additional irrigation in Lampung Province is efficient. A complete benefit-cost analysis of irrigation investment in Lampung would require estimates of the social opportunity cost of land used for rice production in normal weather years and information on the investment and maintenance costs of the additional irrigation infrastructure.

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