Productive Efficiency in Water Usage: An Analysis of Differences among Farm Types and Sizes in Georgia
In Georgia, the price of irrigation water is equal to the cost of extraction, including pumping and diversion, storage, treatment, and delivery costs. These water-pricing conditions are repeated in locales around the world. In lieu of established water markets, water use and its efficient use are driven more by farm-level characteristics and management strategies than by the resource price. The purpose of the research presented herein is to examine what factors guide Georgia farmers’ water use decisions. Using data envelopment analysis (DEA) to calculate technical water use efficiency scores, a second step Tobit model is estimated to determine the effect of farm type and farm size. A farms’ use of conservation tillage or organic farming positively affected their water use efficiency, while farms of smaller size or solely owned were more inefficient in water use.
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