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Finck von Finckenstein (1999), Advancing Subsidy Reforms: Towards a Viable Policy Package, Paper prepared for UNEP Fifth Expert Group Meeting on Financial Issues of Agenda 21, Nairobi, December. Porter, G. (2003), “Subsidies and the Environment: An Overview of the State of Knowledge”, paper prepared for the OECD Workshop on Environmentally Harmful Subsidies, Paris, 7-8 November, published in this volume. Poulos, C. and D. Whittington (2000), “Time Preferences for Life-Saving Programs: Evidence from Six Less Developed Countries”, Environmental Science and Technology, Vol.

For transport infrastructure and irrigation water the picture is less clear. Agriculture Distinguishing characteristics of the sector x By and large, the government does not provide either the primary capital investment or the crucial natural resources used in agriculture, as in the cases of forests, fisheries and transport. Irrigated agriculture represents 32 an obvious exception to this generality as noted in the discussion of that sector below. x For the same reason, resource rents are not an issue in defining and measuring agricultural subsidies.

Prices based on volume used rather than on number of hectares irrigated can provide at least some incentive for irrigators to reduce water use by reducing the length of time that crops are irrigated, if the system can be enforced. , 1997). , 1998). When the charges do approximate the MVP, the impact on water use is dramatic: Israel set the water price close to the MVP and achieved a 50% reduction in water use (Tiwari and Dinar, 2001). All of these changes reduce the amount of water withdrawn, thus increasing instream flows of water and the amount of water remaining for other purposes.

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