Analytical investigation of the effects of dam construction on the productivity and efficiency of farmers

Abstract

Under drought conditions, by constructing dams, water resource management prevents the flow of water and helps sustain groundwater resources in the long run. On the other hand, dam construction affects the level and the patterns of cultivation, employment, rural livelihoods, and the productivity and efficiency of farmers. Given this approach, the effects of Baft dam construction on the efficiency and productivity of downstream agricultural land was studied in 2014. In order to achieve this objective, two groups of farmers were selected and evaluated; those that use Baft dam water, or the treatment group (80 farmers), and those who do not use the dam water, the control group (45 farmers). Tornqvists-Theil (TTP) index, Stochastic Frontier Analysis (SFA) and Matching method was used to analyze the information related to the two groups. The results revealed that the efficiency and the average of the Total Factor Productivity (TFP) of the treatment group is larger than control group. However, the difference between the average productivity of agricultural units in the treatment and control groups was not significant. Based on the cultivation of the farmers' products and experience in the two groups, the higher technical efficiency in the treatment group compared to the control group was related to scale efficiency. This fact has been confirmed by using the matching method. The results also revealed that the population of the treatment group increased from 145 to 431, with a growth of 197% after the dam construction. But the population of the control villages reduced from 147 to 116 people, a 27% decrease.