# **Morocco**

The top-down (macro-to-micro) links considered in our analysis for Morocco are of a trade reform type. The bottom-up (micro-to-macro) links pertain to changes in farm water assignments and the possibility of water trading. For each policy the direct, indirect and total effects are analyzed. It was found that the productivity of water is strongly influenced by these policies, with direct effects modified by general-equilibrium, indirect effects and sometimes even reversed by them.

It is expected that the basic forces will also be present in the other countries, but their magnitudes and possible direction of change will of course vary by country specific situations, with important policy implications.

The impacts of the two reforms that were assessed were found to be different, with trade reform having an absolute impact of a higher magnitude than the water reform. It is expected to find both differences in relative and absolute magnitudes in the other three countries, based on institutional, economic, and physical conditions.

The importance of packaging and sequencing reforms is an issue that deserves further research. Our analysis of the Moroccan economy reveals that this is an important factor, affecting a successful implementation of any reform. The model developed here can be used to evaluate policy reforms in other situations, pending appropriate data, and is therefore of wide application. The three countries considered here are of varying degrees of initial conditions and relative effectiveness of policy interventions. Applying the analysis to other countries will allow testing the hypotheses related to reform packaging and sequencing under different circumstances (Roe et al, 2005b).

# **Mexico**

In the context of the comprehensive analytical framework the present study seeks to develop as a policy dialogue tool, the above findings provide the basis for evaluating the economic impact of selected policy interventions. Applying the analytical models (regional production and CGE) developed as part of the overall study yields a number of relevant conclusions that further validate and/or extend the findings indicated above. These conclusions are highlighted below. However, again, the objective of the current study is to develop a comprehensive analytical framework that can inform a policy dialogue. In keeping with that focus, the results of the current study also include a strategy for ongoing consultations and dissemination among various relevant stakeholders.

Considering the over exploitation of aquifers nationally and in the Rio Bravo Basin, combined with rapid urban growth, it seems unlikely that preserving current water allocations for agricultural uses can be sustained. Part of the complication arises from allocating much more water for agricultural uses relative to urban uses. As such, meeting urban demands would likely only require small reductions in available water for agriculture, leading to moderate reductions in total cultivated land and level of production. Moreover, some policy interventions to achieve this result have relatively lower negative impacts than others, so they are more politically feasible.

Many farmers seem to be quantity-responsive rather price (cost)-responsive to both land and water. In other words, given current pricing and subsidy realities, policy alternatives that target irrigation water supply reduction (rather than irrigation water supply price increases) may be more likely to induce greater water use efficiency for agricultural purposes. Moreover, reducing water supply can be implemented more equitably, and would therefore be more politically viable, compared to policies that focus on eliminating energy subsidies for pumping groundwater. As compared to poor and medium income rural 39