Markets, Institutions And Efficiency Groundwater Irrigation In North India
This paper analyzes the institutions and markets that govern groundwater allocation in the sugarcane belt of Uttar Pradesh, India, using primary, plot-level data from a village which shares the typical features of this region. Electricity powers tubewell pumps, and its erratic supply translates into randomness in irrigation volumes. The paper finds that plots are water-rationed, owing to inadequate supply of power. A simple model shows that a combination of such rationing and the village-level mechanism of water sales can lead to great misallocation of water across plots, and result in large crop losses for plots that irrigate using purchased water. We infer the existence of a social contract that mitigates these potential losses in the study area to a remarkable extent; in its absence, average yields are estimated to be 18% lower. The finding that the water allocation is close to efficient (given the power supply) marks a sharp contrast with much of the existing literature. Notwithstanding the social contract, the random and inadequate supply of power, and therefore water, is inefficient. The dysfunctional power supply is part of a larger system of poor incentives to produce reliable and adequate power. In simulations we find that such reliability can improve yields by up to 10 %, and pay for a system of electricity pricing that gives incentives to the power supplier to actually provide adequate power. However, even at reasonably high power prices, irrigation volumes are large enough to continue to seriously deplete the water table. The problem is that traditional rights of water use do not take into account the shadow price of the groundwater. We provide a rough first analysis to suggest that a 15% markup on the economic unit cost of providing electricity would make for intertemporally efficient water use.
|Date of creation:||Nov 2006|
|Contact details of provider:|| Postal: Delhi 110 007|
Phone: (011) 27667005
Fax: (011) 27667159
Web page: http://www.cdedse.org/
More information through EDIRC
|Order Information:|| Web: http://www.cdedse.org/ Email: |
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.:
- Evenson, Robert E. & Pray, Carl E. & Rosegrant, Mark W., 1999. "Agricultural research and productivity growth in India:," Research reports 109, International Food Policy Research Institute (IFPRI).
- James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 317-341.
- Hanan G. Jacoby & Rinku Murgai & Saeed Ur Rehman, 2004.
"Monopoly Power and Distribution in Fragmented Markets: The Case of Groundwater,"
Review of Economic Studies,
Oxford University Press, vol. 71(3), pages 783-808.
- Jacoby, Hanan G.*Murgai, Rinku*Rehman, Saeed Ur, 2001. "Monopoly power and distribution in fragmented markets : the case of groundwater," Policy Research Working Paper Series 2628, The World Bank.
- Schoengold, Karina & Zilberman, David, 2007. "The Economics of Water, Irrigation, and Development," Handbook of Agricultural Economics, Elsevier.
- Zvi Griliches & Jacques Mairesse, 1995.
"Production Functions: The Search for Identification,"
NBER Working Papers
5067, National Bureau of Economic Research, Inc.
- Zvi Griliches & Jacques Mairesse, 1995. "Production Functions: The Search for Identification," Harvard Institute of Economic Research Working Papers 1719, Harvard - Institute of Economic Research.
- Z, Griliches & Jacques Mairesse, 1997. "Production Functions : The Search for Identification," Working Papers 97-30, Centre de Recherche en Economie et Statistique.
- Meinzen-Dick, Ruth Suseela, 1996. "Groundwater markets in Pakistan: participation and productivity," Research reports 105, International Food Policy Research Institute (IFPRI).
When requesting a correction, please mention this item's handle: RePEc:cde:cdewps:152. 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: (Sanjeev Sharma)
If references are entirely missing, you can add them using this form.