ABSTRACT
Abstract Water as a scarce economic input has become a major decisive factor in water pricing for the competitive sectors and especially for irrigation for which water is normally allocated on administrative and historic water rights. In Israel, agriculture is the major water consumer using about 65% of available water resources. A water quality factor and an Increasing Block Rate system related to the quality of water at source and the level of water used are applied for payment for the first 50, 80 and 100% of the allocation. The introduction of a progressive pricing system together with other efficiency measures have reduced government subsidy for water used in irrigation which was reduced from 40% in 1994 to 26% in 1996 and to a projected 19% in 1997. The new pricing system, although still subsidized has influenced water consumption pattern by making irrigation water a major expenditure (8-9%) of the total purchased agricultural production inputs. Further reform is being discussed in which the existing block rate and the non - tradable allocations are to be changed into a market negotiating systems. The Government is to further reduce direct involvement in water supply by privatization of the national water company and the creation of regional water systems which will operate as private corporations under government control. Shares allocation attracting dividends and voting rights will replace existing water rights. Some of the changes already experienced and those planned for the Israeli water Sector are discussed in this presentation. Keywords: Israel, water, irrigation, prices, subsidies, water economics, agriculture
Water: Economics, Management and Demand. Edited by Melvyn Kay, Tom Franks and Laurence Smith. Published in 1997 by E & FN Spon. ISBN 0 419 21840 8.
