Life style changes, population and economic growth, and lack of institutional innovations are causing noticeable damage to the rural communities living in and around Aflaj. The Ministry of Regional Municipalities and Water Resources (MRMWR) reported more than 1,000 dried-up Aflaj out of 4,112 in 1996. This paper presents an estimation of the damage caused to the rural communities due to Aflaj dry-up. The production function method and the cost based method are used to estimate the direct losses incurred by farmers and the local communities. These are related to (1) losses in marketed agricultural products, (2) increase in domestic water expenditures per household and (3) capital losses related to changes in house and land values. The study considered 33 dried-up Aflaj among the 1029 monitored by the MRMWR. Our results show that on average each family in the dried-up Falaj has lost an income equivalent of O.R 320 per month. This highlights the importance of Aflaj as an income generator in the remote rural areas. Live Aflaj provide fresh vegetables and healthy food as well as drinking water to the rural population without the need for governmental intervention. The contribution of the supporting wells, whenever provided by the MRMWR, is estimated at O.R 1,478 per family per year. On average the annual financial loss per family due to dry-up is estimated at O.R 3,301 per year. The total damage cost of dried-up Aflaj, at the Sultanate level, is estimated at more than O.R 59 million per year.

Life style changes, population and economic growth, and lack of institutional innovations are causing noticeable damage to the rural communities living in and around Aflaj. The Ministry of Regional Municipalities and Water Resources (MRMWR) reported more than 1,000 dried-up Aflaj out of 4,112 in 199...