Substitution between water and other agricultural inputs: Implications for water conservation in a River Basin context
Substitution of irrigation water with other agricultural inputs could be an important means to conserve water in the face of growing pressures on water resources from both nonagricultural water demands and environmental water requirements. This paper discusses the potential of such substitution through an empirical analysis based on a multiple-input crop production function at the field and farm scales complemented with a numerical modeling exercise at the basin scale. Results from the crop production function analysis show that under both crop yield and net profit maximization, water is a substitute to other crop inputs for high-value crops, and is a complement to water for low-valued crops. At the basin scale, an integrated economic-hydrologic river basin model is used to analyze the role of other factors in crop input substitution, including the spatial connections among water sources and demands, hydro-agronomic conditions, and institutional settings for water allocation. Results show that in the case study area, the Maipo River basin in Chile, where water is very scarce, moving from the current, input-constrained, situation to full optimization of water resources leads to an increase in all crop inputs, including water. In that case, 301Â million m3 of additional water use results in additional net profits of USD 11Â million. However, if the water fee is raised by a factor of eight while overall basin irrigation profits are maintained at the original, baseline level, a reduction of water withdrawals by 326Â million m3 is traded off with costs of USD 43.2Â million for other inputs. Irrigation districts with a high share of low-value crops have a low potential for substituting water with other crop inputs. Therefore, investments for water substitution should also be kept low in these areas.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Rosegrant, Mark W. & Ringler, Claudia & McKinney, Daene C. & Cai, Ximing & Keller, Andrew & Donoso, G., 2000.
"Integrated economic-hydrologic water modeling at the basin scale: the Maipo river basin,"
EPTD discussion papers
63, International Food Policy Research Institute (IFPRI).
- Rosegrant, M. W. & Ringler, C. & McKinney, D. C. & Cai, X. & Keller, A. & Donoso, G., 2000. "Integrated economic-hydrologic water modeling at the basin scale: the Maipo river basin," Agricultural Economics, Blackwell, vol. 24(1), pages 33-46, December.
- Rosegrant, M.W. & Ringler, C. & McKinney, D.C. & Cai, X. & Keller, A. & Donoso, G., 2000. "Integrated economic-hydrologic water modeling at the basin scale: the Maipo river basin," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 24(1), December.
- Arnaud Reynaud, 2003. "An Econometric Estimation of Industrial Water Demand in France," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 25(2), pages 213-232, June.
- Cai, Ximing & McKinney, Daene C. & Rosegrant, Mark W., 2003. "Sustainability analysis for irrigation water management in the Aral Sea region," Agricultural Systems, Elsevier, vol. 76(3), pages 1043-1066, June.
- David I. Stern, 2004.
"Elasticities of Substitution and Complementarity,"
Rensselaer Working Papers in Economics
0403, Rensselaer Polytechnic Institute, Department of Economics.
- Howitt, Richard E. & Msangi, Siwa, 2002. "Reconstructing Disaggregate Production Functions," 2002 Annual meeting, July 28-31, Long Beach, CA 19585, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Edwards, Brian K. & Howitt, Richard E. & Flaim, Silvio J., 1996. "Fuel, crop, and water substitution in irrigated agriculture," Resource and Energy Economics, Elsevier, vol. 18(3), pages 311-331, October.
- Bartolini, F. & Bazzani, G.M. & Gallerani, V. & Raggi, M. & Viaggi, D., 2007. "The impact of water and agriculture policy scenarios on irrigated farming systems in Italy: An analysis based on farm level multi-attribute linear programming models," Agricultural Systems, Elsevier, vol. 93(1-3), pages 90-114, March.
- repec:cup:cbooks:9780521623940 is not listed on IDEAS
- Ringler, Claudia & Vu Huy, Nguyen, 2004. "Water allocation policies for the Dong Nai River Basin in Vietnam: an integrated perspective," EPTD discussion papers 127, International Food Policy Research Institute (IFPRI).
- Golan, Amos & Judge, George G. & Miller, Douglas, 1996. "Maximum Entropy Econometrics," Staff General Research Papers 1488, Iowa State University, Department of Economics.
- Cai, Ximing & Ringler, Claudia & Rosegrant, Mark W., 2006. "Modeling water resources management at the basin level: methodology and application to the Maipo River Basin," Research reports 149, International Food Policy Research Institute (IFPRI).
When requesting a correction, please mention this item's handle: RePEc:eee:ecolec:v:66:y:2008:i:1:p:38-50. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.