Abstract
This study was conducted to determine the impact of irrigation on income distribution: (1) among factors, (2) among earners, and (3) among farm families. The study was carried out in a drought prone Barind Tract under Rajshahi district, Bangladesh. It was observed that return to some of the basic production factors like land, labour, non-land capital, current inputs in absolute term was higher in the 'with' irrigation situation in comparison to the return of production factors in the 'without' and 'before' irrigation situations. However, the same pattern did not hold good when the shares were measured in percentage term. The CES production function analysis revealed that irrigation was positively associated with capital (both land and non-land) intensity. With slightly lower labour intensity associated with a bit lower factor-price (labour to capital) ratio caused by irrigation explains the relatively higher labour-capital income ratio. Farms with 'early' span of irrigation operation were less labour intensive as compared to those with 'middle' and 'longer' spans. Estimation of relative factor shares or output elasticities by means of Cobb-Douglas production function revealed that land was overpaid and the labour was underpaid, and the current inputs and draft power which had higher scarcity value were also overpaid and did not comply with the marginal theorem even with the irrigation technology. The absolute shares of all the earners were substantially higher under irrigation situation than these in the 'without' and 'before' irrigation situations. Operators received the highest share in the 'with' and 'without' irrigation situations and the landlords received the lowest share in all irrigation situations. In the 'before' irrigation situation, hired labourers enjoyed the highest share. Unlike absolute term, the pattern of earner shares was not same in percentage term. The overall Gini ratio computed was slightly higher in the 'with' irrigation situation than in the 'without' irrigation situation. This implies that increased production efficiency due to irrigation may slightly increase income inequality in the irrigated villages where land income tends to be unequally distributed among the households, and farm income contributed a lion's share to this distribution.