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Irrigation revenue loss in Murray–Darling Basin drought: An econometric assessment

Listed author(s):
  • Connor, Jeffery D.
  • Kandulu, John M.
  • Bark, Rosalind H.

This article presents an econometric analysis of irrigation commodity area and revenue responses to varying commodity prices, water availability and climate conditions for the second half of a decade long drought in the Murray–Darling Basin, Australia. We find statistically significant evidence of irrigation area decline with reductions in water allocations and irrigation revenue shrinking with area irrigated. Results also indicate hotter drier weather conditions experienced in the drought effected crops differently: some crop revenues suffered, while higher evapotranspiration and yield potential appeared to support higher revenue outcomes for other crops. Comparison revealed that marginal revenue changes in response to water allocations estimated are much less than those implicit in other economic assessments of water scarcity impacts for the same basin that used different methods. We find that triangulation of results between methods provides confidence in consistent results and reveals possible avenues for future research and methodological development.

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File URL: http://www.sciencedirect.com/science/article/pii/S0378377414001449
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Article provided by Elsevier in its journal Agricultural Water Management.

Volume (Year): 145 (2014)
Issue (Month): C ()
Pages: 163-170

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Handle: RePEc:eee:agiwat:v:145:y:2014:i:c:p:163-170
DOI: 10.1016/j.agwat.2014.05.003
Contact details of provider: Web page: http://www.elsevier.com/locate/agwat

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