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Water As An Economic Good In Irrigated Agriculture: Theory And Practice

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  • Hellegers, Petra J.G.J.
  • Perry, Christopher J.

Abstract

This report describes the results of the Water Valuation and Pricing project, which aims to provide insight into the relevance of economics to typical problems found in irrigated agriculture. It first considers the theoretical basis for the use of economic instruments, then considers their usefulness in the context of five case studies of irrigated areas - in Egypt, India, Indonesia, Morocco and Ukraine. The case studies confirm that competition for scarce water and shortage of funds are widespread. The study provides insight into the current price paid for water, the cost of service provision, and the value to irrigators of the water they receive. The analysis shows that volumetric pricing is unlikely to be relevant to demand management because the price of water at which demand and supply would be balanced is so high as to substantially reduce farm incomes. This socio-political problem, plus the technical and administrative complexity of measuring and accounting for water, and the crucial distinction between water applied to the field and water consumed by the crop make water pricing an unsuitable approach to balancing supply and demand.

Suggested Citation

  • Hellegers, Petra J.G.J. & Perry, Christopher J., 2004. "Water As An Economic Good In Irrigated Agriculture: Theory And Practice," Report Series 29109, Wageningen University and Research Center, Agricultural Economics Research Institute.
    • Handle: RePEc:ags:aerirs:29109
    DOI: 10.22004/ag.econ.29109
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    File URL: https://ageconsearch.umn.edu/record/29109/files/pr040312.pdf
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    Citations

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    Cited by:

    1. Durba Biswas & L. Venkatachalam, 2015. "Farmers' Willingness to Pay for Improved Irrigation Water — A Case Study of Malaprabha Irrigation Project in Karnataka, India," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 1(01), pages 1-24.
    2. Francois Molle & Jeremy Berkoff, 2009. "Cities vs. agriculture: A review of intersectoral water re‐allocation," Natural Resources Forum, Blackwell Publishing, vol. 33(1), pages 6-18, February.
    3. A. Alamanos & D. Latinopoulos & G. Papaioannou & N. Mylopoulos, 2019. "Integrated Hydro-Economic Modeling for Sustainable Water Resources Management in Data-Scarce Areas: The Case of Lake Karla Watershed in Greece," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 33(8), pages 2775-2790, June.
    4. repec:iwt:bosers:h040600 is not listed on IDEAS
    5. repec:iwt:conppr:h037533 is not listed on IDEAS
    6. repec:iwt:bosers:h040609 is not listed on IDEAS
    7. Molle, Francois & Berkoff, Jeremy, 2007. "Water pricing in irrigation: the lifetime of an idea," Book Chapters,, International Water Management Institute.
    8. repec:iwt:jounls:h049189 is not listed on IDEAS
    9. Hellegers, Petra J. G. J. & Perry, C. J. & Petitguyot, T., 2007. "Water pricing in Tadla, Morocco," Book Chapters,, International Water Management Institute.
    10. Latorre, María C. & Bajo-Rubio, Oscar & Gómez-Plana, Antonio G., 2009. "The effects of multinationals on host economies: A CGE approach," Economic Modelling, Elsevier, vol. 26(5), pages 851-864, September.
    11. Wahib Al-Qubatee & Petra Hellegers & Henk Ritzema, 2019. "The Economic Value of Irrigation Water in Wadi Zabid, Tihama Plain, Yemen," Sustainability, MDPI, vol. 11(22), pages 1-19, November.
    12. Lowe, Benjamin H. & Oglethorpe, David R. & Choudhary, Sonal, 2020. "Comparing the economic value of virtual water with volumetric and stress-weighted approaches: A case for the tea supply chain," Ecological Economics, Elsevier, vol. 172(C).

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