Cost–benefit studies on replacing conventional agricultural water resources with reclaimed water in favour of cities are still rare. Some results of a study under auspices of the Food and Agriculture Organisation (FAO) are presented. By means of an illustrative example at Lobregat River basin in Spain, it could be proved that reclaimed water reuse and intersectoral water transfer can result in economic and environmental benefits at the watershed level. The agricultural community faces cost savings in water pumping and fertilising, increases in yields and incomes; the municipality benefits from additional water resources released by farmers. Farmers should be encouraged to participate by implementing adequate economic incentives. Charging farmers with the full cost of water reclamation may discourage farmers from joining water exchange projects. Particularly in regions with water scarcity, investments in reclaimed water reuse and water exchange arrangements usually pay back and are profitable in the long term.
Keywords: cost–benefit analysis, intersectoral water transfer, irrigated agriculture, municipal water supply, wastewater reuse, water exchange, water reclamation