ALTHOUGH THE CHAO PHYA WATER CONTROL PROJECT WAS COMPLETED IN THE EARLY 1960S AND IS THE LARGEST SINGLE GOVERNMENT PROJECT OF ITS KIND IN THAILAND, THIS STUDY IS THE FIRST ATTEMPT TO EVALUATE THE RETURNS FROM THE INVESTMENT IN WATER CONTROL FACILITIES IN THE PROJECT AREA OF 660,000 HECTARES. THE STUDY WAS LIMITED TO AN EXAMINATION OF THE EFFECTS OF THE SYSTEM ON CROP PRODUCTION. FROM A NATIONAL POINT VIEW, THE WATER CONTROL PROJECT HAS INCREASED EXPORTS OF MILLED RICE BY AN AVERAGE OF ABOUT 90,000 TONS PER YEAR. THIS IS ROUGHLY 9 PERCENT OF THAILAND'S TOTAL EXPORTS OF RICE IN RECENT YEARS. THE SYSTEM HAS THUS CONTRIBUTED BOTH TO INCREASING THE AVERAGE FOREIGN EXCHANGE EARNINGS AND TO REDUCING THE ANNUAL FLUCTUATIONS IN THESE EARNINGS. AT THE FARM LEVEL, THE RISK OF COMPLETE CROP FAILURE HAS BEEN GREATLY REDUCED IN THE AREAS THAT DO NOT FLOOD DEEPLY. FURTHERMORE, THE AVERAGE INCREASE IN PRODUCTION MADE POSSIBLE BY THE SYSTEM HAS INCREASED THE NET CASH RETURNS EARNED BY THE FARMERS OF THE AREA BY AN ESTIMATED 25 PERCENT. IN SPITE OF THESE BENEFITS, THE RETURN TO THE INVESTMENT IN THE ORIGINAL SYSTEM HAS NOT BEEN PARTICULARLY HIGH. CONSIDERING THE EFFECTS OF THE SYSTEM ON CROP PRODUCTION, THE INTERNAL RATE OF RETURN IS ESTIMATED TO BE A MODEST 6 TO 9 PERCENT. THE BASIC FACTOR PREVENTING A HIGHER RATE OF RETURN IS THE LIMITED POTENTIAL THE SYSTEM OFFERS FOR CHANGES IN PRODUCTION TECHNIQUES. THE VARIETIES OF RICE GROWN ARE TALL VARIETIES THAT EITHER SHOW LITTLE RESPONSE TO FERTILIZER, OR, WITH LARGE APPLICATIONS OF NITROGEN, TEND TO LODGE. THE SHORT, PHOTOPERIOD NON-SENSITIVE VARIETIES WHICH ARE RESPONSIVE TO FERTILIZER CANNOT BE PRODUCED SUCCESSFULLY WITHOUT CONSIDERABLY BETTER WATER CONTROL THAN THE SYSTEM GENERALLY AFFORDS.