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Can the lack of coordination between an agricultural authority and a water agency generate inefficiencies?

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  • Martin, Elsa
  • Stahn, Hubert

Abstract

The point of departure of this work is the situation occurring in the Crau area (South-East of France). In this region, organic farmers use surface water for irrigation and excess water percolates into an aquifer that is used as a source for local residents. In contrast to the standard framework, agricultural production thus increases groundwater levels. In this paper, using a dynamic model, we derive the myopic and socially optimal food and water consumption paths. The first aim is to bring to the fore that an intervention is needed and that, in such a specific case, the environment can be protected thanks to some "good" production incentives. We then analyze the problem of coordination that can occur when two distinct local authorities - an agricultural and a water one, optimize food production and water use. In order to do so, we use an open-loop Nash game. We furthermore add into the picture environmental externalities linked with irrigation water flows that can generate amenities when they replenish wetlands or negative externalities when they induce floods.

Suggested Citation

  • Martin, Elsa & Stahn, Hubert, 2010. "Can the lack of coordination between an agricultural authority and a water agency generate inefficiencies?," 84th Annual Conference, March 29-31, 2010, Edinburgh, Scotland 91811, Agricultural Economics Society.
  • Handle: RePEc:ags:aesc10:91811
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    File URL: http://purl.umn.edu/91811
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    References listed on IDEAS

    as
    1. José A. Gómez-Limón & Manuel Arriaza & Julio Berbel, 2002. "Conflicting Implementation of Agricultural and Water Policies in Irrigated Areas in the EU," Journal of Agricultural Economics, Wiley Blackwell, vol. 53(2), pages 259-281.
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    Keywords

    externalities; agricultural policy; water policy; coordination of policies; Environmental Economics and Policy; H23; Q18; Q28.;

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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