Policy interventions to promote the adoption of water saving sprinkler systems: the case of lettuce on the Gnangara Mound

The potential for improving irrigation scheduling decisions and adoption of more efficient irrigation systems is explored using a bioeconomic simulation model of lettuce production on the Gnangara Mound near Perth, Western Australia. Sandy soils with poor water and nutrient holding capacity are associated with declining marginal productivity of water at high water use, which would create an incentive to reduce water use and to adopt closer sprinkler spacing if farmers had correct information about the declining marginal productivity of water. Incorrect perceptions regarding water-yield relationships lead to over use of water by up to 50 per cent and reduce profits by 475 per crop hectare (12 per cent) in the short run, and remove the incentive to adopt more efficient systems in the long run. Higher water prices create an incentive to reduce irrigation scheduling time in the short term and to adopt more uniform sprinkler systems, and tend to reduce the discrepancies associated with poor information about the marginal productivity of water. The low level of adoption of efficient irrigation systems in the region might be explained partly by historically poor water governance and insufficient extension regarding water productivity and technology. Copyright 2007 The Authors Journal Compilation 2007 Australian Agricultural and Resource Economics Society Inc. and Blackwell Publishers Ltd .