Abstract

The continuous cultivation of the Rhodes Grass in Batinah costal area and Salalah region of Sultanate of Oman has a negative impact on the overall agriculture system and production. Improvement of the conditions could be achieved by introducing new water policy into farming and using Government suppor­ting tools to motivate farmers and achieve financial sustainability. The new water policy and strategies formed by Government are examined in three cultivated locations in this paper: Salalah location with enough irrigation water, Hanfeet location with low irrigation water and Dawkah location with very low irrigation water. Economic efficiency of the location is evaluated through the Net Present Value and IRR calculation. Within the assumption of the objective evaluation of input parameters, we can expect an acceptable economic efficiency of the investment only in Salalah location. The simplified deterministic evaluation of economic efficiency is formed to identify the relevant risk factors, followed by its quantification by the simulation processes. Taking the risk into account leads to a significant decrease of the economic attractiveness of stakeholders and more Government support is needed to achieve water policy and project sustainability at new location at Hanfeet and Dawkah location.

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