Financial Analysis of Water Source Protection Work of Watershed Management

Abstract:
Water supply is critical in many areas of the Middle Mountains in Nepal. The major hardships in terms of the drinking water is being experiencing in the altitude at the winter season and in the rainy season effects the down stream due to the excess water. The water supply work is good in such situation its economic gain is of secondary importance while the first importance is to provide the safe services and care the people from difficulties. So that, activities implemented in the rural areas can be evaluated economically or financially to the measure the financial efficiency in terms of services. For the described situation, the research paper tries to evaluate the water source protection activity financially. This report basically reflects the different streams of costs and benefits for the targeted activity to review the financial benefits from the activity.
The study is based on primary and secondary data analysis. Primary data were collected from the field (Five Community Development Groups, Kanthekhola sub watershed management area of Baglung District). Methods were Participatory Rural Appraisal (Focus group discussion, semi structured interview, household visit and the direct observation of the construction works with CDG members. Secondary information were collected from different official reports, DSCO Baglung, District development committee Baglung, Baglung municipality and the five-year plan of the CDGs.
Financial analysis has carried out for the direct input and output of construction and benefit received from the water source protection work and agricultural practices (Home garden, Kitchen garden, Vegetable farming etc), for the calculation of Benefit Cost Ratio, Internal rate of Return and Net Present Value. Indirect input and return analyzed to check the service and the farmland benefits from the intervention. Basic statistical tools were used to analyze the socioeconomics and the evaluation of the best project. Strength, weaknesses, Opportunities and Limitations (SWOL) analysis is carried out in the field and documented.
On the basis of analysis it has shown that Water source Protection work has a huge advantage of health improvement and income generation. Viable option to maximize financial return is the replacement of conventional agriculture practice with the income generation activities like vegetable farming. The programme is equally beneficial to reduce the workload of people to the water collection for the domestic purposes. It is also worthwhile to conserve the soil and support to the environmental improvement by reducing the downstream defects in favour of the people's welfare. The profit is very attractive; investment on fruit tree plantation, kitchen gardening, and compost pit preparation started, income generation expected, the benefits are manifold as compared to the conventional agriculture.
Considerations for the improvement of the works might be welfare policies and special programs favourable to the people, awareness about the soil erosion and conservation, education of the positive effects of the downstream due to the intervention, explore the regional market for the vegetables, and design the integrated watershed management activities.