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Who Gains and Who Loses in the Game of Groundwater Markets in Water-scarce Regions

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  • Singh, Dalbir

Abstract

The rights to groundwater belong to the landowner. Therefore, access to this resource is privy to well-to-do farmers and is beyond the reach of resource-poor farmers. The only option left with them is water markets. The present study has aimed at understanding the operations of groundwater markets in fragile conditions and has identified the losers and gainers in the game of water markets in the long-run. It has been found that water markets mitigate inequalities in accessibility to groundwater resource in the short-run. But, faster and excessive use of groundwater may increase inequity among the farming community in the long-run. In water-scarce regions, water markets function on the principles of profit maximization. The different strategies are adopted to make groundwater available for sale. The water markets operate under monopsonic conditions. The terms and conditions of groundwater markets, i.e. kind or cash, vary differently across the regions. The study has suggested that water rights should be redefined and nationalization of groundwater resource is the only alternative for its sustainable management. To restrict the overexploitation of aquifers, water trading should be allowed in a limited manner. Programmes for recharging aquifer should be initiated on a large scale. A community-based action is required for the efficient use of water resources in water-scarce conditions through effective institutional arrangement.

Suggested Citation

  • Singh, Dalbir, 2007. "Who Gains and Who Loses in the Game of Groundwater Markets in Water-scarce Regions," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 20(2).
    • Handle: RePEc:ags:aerrae:47345
    DOI: 10.22004/ag.econ.47345
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    References listed on IDEAS

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    1. Sharma, Purushottam & Sharma, R.C., 2004. "Groundwater Markets Across Climatic Zones: A Comparative Study of Arid and Semi-Arid Zones of Rajasthan," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 59(1), pages 1-13.
    2. Aron, Janine, 2000. "Growth and Institutions: A Review of the Evidence," The World Bank Research Observer, World Bank, vol. 15(1), pages 99-135, February.
    3. Rosegrant, Mark W. & Binswanger, Hans P., 1994. "Markets in tradable water rights: Potential for efficiency gains in developing country water resource allocation," World Development, Elsevier, vol. 22(11), pages 1613-1625, November.
    4. Singh, Dalbir, 2002. "Groundwater Markets in Fragile Environments: Key Issues in Sustainability," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 57(2), June.
    5. Janakarajan, S., 1993. "Economic and Social Implications of Groundwater Irrigation: Some Evidence from South India," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 48(1).
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