Economic Impact of Micro Catchment Development

In Sri Lanka, an island located near the southern tip of India, there are about 25,000 small reservoirs, commonly known as village tanks, whose irrigable area lies between 1 and 80 ha. About 50% of these tanks are abandoned and need rehabilitation. In the recent past, the Government of Sri Lanka received assistance from several donors to rehabilitate these tanks. Two of the objectives of the rehabilitation program are to increase the small farmer income and increase the paddy production of the country. When a large number of village tanks are located within the catchment of a major reservoir, rehabilitation can result in a negative impact on the economy. In this paper, a model is developed to assess such impact. The results of the four systems of reservoirs studied indicates that the maximum economic benefits are obtained when about 60% of the village tanks are rehabilitated. If rehabilitation is carried out beyond this critical level, there is a net reduction of paddy production from the system of reservoirs.