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Using ecological indices to measure economic and environmental performance of irrigated agriculture

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  • Azad, Md A.S.
  • Ancev, Tihomir

Abstract

Growing public concern about the health of rivers and wetlands, and the ecosystems they support, puts pressure on large water users-such as the irrigation industry-to find ways to use less water. At the same time, the growing competitiveness of the economic environment places demands on the industry to maintain its productivity and profitability. This study develops a method, based on the concept of an environmental performance index (EPI), to measure the economic and environmental performance of irrigated agricultural enterprises. In defining environmental pressure exerted by the irrigation industry the method incorporates certain characteristics of ecological assets affected by water withdrawal for irrigation. As an empirical application, the method was applied to a case study of seventeen natural resource management (NRM) regions within the Murray-Darling Basin (MDB), Australia. Data Envelopment Analysis was used to compute the component distance functions in order to construct an EPI for each considered irrigated enterprise in each NRM region. The results of the analysis show that environmental efficiencies of irrigated enterprises vary considerably across NRM regions. These findings support the case for policy targeting by type of irrigation enterprise and by location of enterprises.

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Bibliographic Info

Article provided by Elsevier in its journal Ecological Economics.

Volume (Year): 69 (2010)
Issue (Month): 8 (June)
Pages: 1731-1739

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Handle: RePEc:eee:ecolec:v:69:y:2010:i:8:p:1731-1739

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Web page: http://www.elsevier.com/locate/ecolecon

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Keywords: Distance functions Environmental performance index Irrigation Ramsar;

References

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  1. M. D. Young & J. C. McColl, 2003. "Robust Reform: The Case for a New Water Entitlement System for Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 36(2), pages 225-234.
  2. Fare, Rolf, et al, 1993. "Derivation of Shadow Prices for Undesirable Outputs: A Distance Function Approach," The Review of Economics and Statistics, MIT Press, vol. 75(2), pages 374-80, May.
  3. Osman Zaim & Fatma Taskin, 2000. "A Kuznets Curve in Environmental Efficiency: An Application on OECD Countries," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 17(1), pages 21-36, September.
  4. Fare, R. & Grosskopf, S. & Hernandez-Sancho, F., 2004. "Environmental performance: an index number approach," Resource and Energy Economics, Elsevier, vol. 26(4), pages 343-352, December.
  5. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
  6. Quiggin, John C., 2001. "Environmental economics and the Murray-Darling river system," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 45(1), March.
  7. Zaim, Osman, 2004. "Measuring environmental performance of state manufacturing through changes in pollution intensities: a DEA framework," Ecological Economics, Elsevier, vol. 48(1), pages 37-47, January.
  8. Figge, Frank & Hahn, Tobias, 2009. "Not measuring sustainable value at all: A response to Kuosmanen and Kuosmanen," Ecological Economics, Elsevier, vol. 69(2), pages 244-249, December.
  9. Van Passel, Steven & Nevens, Frank & Mathijs, Erik & Van Huylenbroeck, Guido, 2007. "Measuring farm sustainability and explaining differences in sustainable efficiency," Ecological Economics, Elsevier, vol. 62(1), pages 149-161, April.
  10. Heaney, Anna & Beare, Stephen & Bell, Rosalyn, 2001. "Evaluating improvements in irrigation efficiency as a salinity mitigation option in the South Australian Riverland," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 45(3), September.
  11. Fare, Rolf, et al, 1989. "Multilateral Productivity Comparisons When Some Outputs Are Undesirable: A Nonparametric Approach," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 90-98, February.
  12. Bellenger, Moriah J. & Herlihy, Alan T., 2009. "An economic approach to environmental indices," Ecological Economics, Elsevier, vol. 68(8-9), pages 2216-2223, June.
  13. repec:ebl:ecbull:v:17:y:2006:i:1:p:1-7 is not listed on IDEAS
  14. Kuosmanen, Timo & Kuosmanen, Natalia, 2009. "How not to measure sustainable value (and how one might)," Ecological Economics, Elsevier, vol. 69(2), pages 235-243, December.
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Cited by:
  1. H. K. Millington & J. E. Lovell & C. A. K. Lovell, 2013. "Using Fieldwork, GIS and DEA to Guide Management of Urban Stream Health," CEPA Working Papers Series WP072013, School of Economics, University of Queensland, Australia.
  2. Meagan Krupa & Branka Valcic, 2011. "Sustainable fisheries: how externalities impact urban fishery management," Journal of Environmental Studies and Sciences, Springer, vol. 1(3), pages 159-168, September.
  3. Hansen, Zeynep K. & Lowe, Scott E. & Xu, Wenchao, 2014. "Long-term impacts of major water storage facilities on agriculture and the natural environment: Evidence from Idaho (U.S.)," Ecological Economics, Elsevier, vol. 100(C), pages 106-118.

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