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Influence of crop-water production functions on the expected performance of water pricing policies in irrigated agriculture

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  • Sapino, Francesco
  • Pérez-Blanco, C. Dionisio
  • Gutiérrez-Martín, Carlos
  • García-Prats, Alberto
  • Pulido-Velazquez, Manuel

Abstract

Agricultural economics Water Programming Models (WPM) has found that irrigators in water scarce areas have a rather inelastic response to water prices, making water pricing cost-ineffective towards water saving. We hypothesize that the predicted water saving performance of pricing is significantly underestimated by issues of model structure, due to the exclusion of deficit irrigation from the set of decision variables available to agents in conventional WPM. To test our hypothesis, we develop a model that integrates a continuous crop-water production function into a positive multi-attribute WPM, which allows us to assess agents’ adaptive responses to pricing through deficit irrigation. The model is illustrated with an application to the El Salobral-Los Llanos irrigated area in Spain. Our results show that incorporating deficit irrigation as an adaptation option makes the water demand curve significantly more elastic as compared to an alternative model setting where deficit irrigation is precluded. We conclude that ignoring deficit irrigation can lead to a significant underestimation of the cost-effectiveness of water pricing towards water saving.

Suggested Citation

  • Sapino, Francesco & Pérez-Blanco, C. Dionisio & Gutiérrez-Martín, Carlos & García-Prats, Alberto & Pulido-Velazquez, Manuel, 2022. "Influence of crop-water production functions on the expected performance of water pricing policies in irrigated agriculture," Agricultural Water Management, Elsevier, vol. 259(C).
    • Handle: RePEc:eee:agiwat:v:259:y:2022:i:c:s0378377421005254
    DOI: 10.1016/j.agwat.2021.107248
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    2. Bennie Grové & Johannes Jacobus Bezuidenhout & Nicolette Matthews, 2023. "Farm-level Hydroeconomic Analysis of Alternative Water Tariff Charges Using a Hybrid Solution Method," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 37(12), pages 4679-4692, September.
    3. Aldaya, Maite M. & Gutiérrez-Martín, Carlos & Espinosa-Tasón, Jaime & Ederra, Idoia & Sánchez, Mercedes, 2023. "The impact of the territorial gradient and the irrigation water price on agricultural production along the first phase of the Navarra Canal in Spain," Agricultural Water Management, Elsevier, vol. 281(C).

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