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Econometric Forecasting of Irrigation Water Demand Conserves a Valuable Natural Resource

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  • Banerjee, Swagata (Ban)
  • Obembe, Babatunde A.

Abstract

Natural causes (such as droughts), non-natural causes (such as competing uses), and government policies limit the supply of water for agriculture in general and irrigating crops in particular. Under such reduced water supply scenarios, existing physical models reduce irrigation proportionally among crops in the farmer’s portfolio, disregarding temporal changes in economic and/or institutional conditions. Hence, changes in crop mix resulting from expectations about risks and returns are ignored. A method is developed that considers those changes and accounts for economic substitution and expansion effects. Forecasting studies based on this method with surface water in Georgia and Alabama demonstrate the relative strength of econometric modeling vis-a`-vis physical methods. Results from a study using this method for ground water in Mississippi verify the robustness of those findings. Results from policy induced simulation scenarios indicate water savings of 12% to 27% using the innovative method developed. Although better irrigation water demand forecasting in crop production was the key objective of this pilot project, conservation of a valuable natural resource (water) has turned out to be a key consequence.

Suggested Citation

  • Banerjee, Swagata (Ban) & Obembe, Babatunde A., 2013. "Econometric Forecasting of Irrigation Water Demand Conserves a Valuable Natural Resource," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 45, pages 1-12, August.
    • Handle: RePEc:ags:joaaec:155430
    DOI: 10.22004/ag.econ.155430
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    References listed on IDEAS

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    1. James S. Eales & Brian K. Engel & Robert J. Hauser & Sarahelen R. Thompson, 1990. "Grain Price Expectations of Illinois Farmers and Grain Merchandisers," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(3), pages 701-708.
    2. Banerjee, Swagata “Ban†& Tareen, Irfan Y. & Gunter, Lewell F. & Bramblett, Jimmy & Wetzstein, Michael E., 2007. "Forecasting Irrigation Water Demand: A Case Study on the Flint River Basin in Georgia," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 39(3), pages 641-655, December.
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    Cited by:

    1. Boyer, Christopher N. & Larson, James A. & Roberts, Roland K. & McClure, Angela T. & Tyler, Donald D. & Smith, S. Aaron, 2014. "Probability of Irrigated Corn Being Profitable in a Humid Region," 2014 Annual Meeting, February 1-4, 2014, Dallas, Texas 162470, Southern Agricultural Economics Association.
    2. Xu, Qin & Fox, Glenn & McKenney, Dan & Parkin, Gary, 2019. "A theoretical economic model of the demand for irrigation water," Agricultural Water Management, Elsevier, vol. 225(C).

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