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Groundwater markets in Pakistan: participation and productivity


  • Meinzen-Dick, Ruth Suseela


In Pakistan, where agriculture is heavily dependent on irrigation, informal water markets are an increasingly important way to provide small farmers and tenant farmers with access to ground- water. The public canal irrigation system provides water to farmers who own land within designated areas, but it does not provide all farmers with adequate water supplies when they need it. Therefore, farmers who can afford it are installing tubewells as a sole or supplementary source of irrigation (Figure 1). Despite the growth in private tubewells, ownership remains limited to a relatively small percentage of farmers. Some well owners also sell groundwater to other nearby farmers. The resulting localized, informal markets have become an important source of irrigation for many farmers. Although selling water from private wells is a long-standing practice in South Asia, these informal arrangements are only now being examined in detail. As water becomes scarce or degraded, more information is needed to help Pakistan and other South Asian countries make policy decisions that will improve equity of access to groundwater resources. Groundwater Markets in Pakistan: Participation and Productivity, Research Report 105, by Ruth Meinzen-Dick, looks at how water markets operate, who participates, the nature of the transactions, and the effects of the markets on agricultural productivity and incomes, in order to determine what helps or hinders the emergence of viable water markets. The report reviews the current literature on groundwater markets, the empirical evidence on performance, and the available policy options. The study examines patterns of private tubewell and groundwater market development using district-level data for the country as a whole, then looks in detail at the performance of groundwater markets using farm household data collected in an IFPRI survey conducted in 1990-92.

Suggested Citation

  • Meinzen-Dick, Ruth Suseela, 1996. "Groundwater markets in Pakistan: participation and productivity," Research reports 105, International Food Policy Research Institute (IFPRI).
  • Handle: RePEc:fpr:resrep:105

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    Cited by:

    1. Meinzen-Dick, Ruth, 2014. "Property rights and sustainable irrigation: A developing country perspective," Agricultural Water Management, Elsevier, vol. 145(C), pages 23-31.
    2. Banerji, A. & Meenakshi, J.V. & Khanna, Gauri, 2012. "Social contracts, markets and efficiency: Groundwater irrigation in North India," Journal of Development Economics, Elsevier, vol. 98(2), pages 228-237.
    3. 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.
    4. A.Banerji & Gauri Khanna & J.V. Meenakshi, 2006. "Markets, Institutions And Efficiency Groundwater Irrigation In North India," Working papers 152, Centre for Development Economics, Delhi School of Economics.
    5. Mike Young & Darla Hatton MacDonald, 2000. ""Who Dares Wins": Opportunities to improve water trading in the south-east of South Australia," Natural Resource Management Economics 00_002, Policy and Economic Research Unit, CSIRO Land and Water, Adelaide, Australia.
    6. Zhang, Lijuan & Wang, Jinxia & Huang, Jikun & Huang, Qiuqiong & Rozelle, Scott, 2010. "Access to groundwater and agricultural production in China," Agricultural Water Management, Elsevier, vol. 97(10), pages 1609-1616, October.
    7. Mukherji, Aditi, 2007. "The energy-irrigation nexus and its impact on groundwater markets in eastern Indo-Gangetic basin: Evidence from West Bengal, India," Energy Policy, Elsevier, vol. 35(12), pages 6413-6430, December.
    8. Sharma, Purushottam & Sharma, R.C., 2006. "Factors Determining Farmers’ Decision for Buying Irrigation Water: Study of Groundwater Markets in Rajasthan," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 19(1).
    9. Akram, Agha Ali, 2014. "Agricultural Water Allocation Efficiency and Farmer Adaptation to Heterogeneous Water Availability in a Developing Country Canal Irrigation System," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170855, Agricultural and Applied Economics Association.
    10. A. Banerji & J. V. Meenakshi & Gauri Khanna, "undated". "Groundwater Irrigation in North India: Institutions and Markets," Working papers 17, The South Asian Network for Development and Environmental Economics.
    11. Dawit Mekonnen & Afreen Siddiqi & Claudia Ringler, 2016. "Drivers of groundwater use and technical efficiency of groundwater, canal water, and conjunctive use in Pakistan’s Indus Basin Irrigation System," International Journal of Water Resources Development, Taylor & Francis Journals, vol. 32(3), pages 459-476, May.
    12. Reto Foellmi & Urs Meister, 2004. "Enhancing Efficiency of Water Supply – Product Market Competition versus Trade," Public Economics 0412012, EconWPA.
    13. Patrick Webb, 2005. "Water and Food Insecurity in Developing Countries:Major Challenges for the 21st Century," Working Papers in Food Policy and Nutrition 29, Friedman School of Nutrition Science and Policy.
    14. Hanemann, Michael, 2014. "Property rights and sustainable irrigation—A developed world perspective," Agricultural Water Management, Elsevier, vol. 145(C), pages 5-22.
    15. Watto, Muhammad, 2013. "Measuring Groundwater Irrigation Efficiency in Pakistan: A DEA Approach Using the Sub-vector and Slack-based Models," 2013 Conference (57th), February 5-8, 2013, Sydney, Australia 152204, Australian Agricultural and Resource Economics Society.
    16. Easter, K William & Rosegrant, Mark W & Dinar, Ariel, 1999. "Formal and Informal Markets for Water: Institutions, Performance, and Constraints," World Bank Research Observer, World Bank Group, vol. 14(1), pages 99-116, February.
    17. Wang, Jinxia & Huang, Jikun & Rozelle, Scott, 2005. "Evolution of tubewell ownership and production in the North China Plain," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 49(2), June.
    18. Vashishtha, P. S. & Singh, D., 2008. "Conflict and inequality in surface irrigation: a socio-ecological perspective," Conference Papers h042933, International Water Management Institute.
    19. Khair, Syed M. & Mushtaq, Shahbaz & Culas, Richard J. & Hafeez, Mohsin, 2012. "Groundwater markets under the water scarcity and declining watertable conditions: The upland Balochistan Region of Pakistan," Agricultural Systems, Elsevier, vol. 107(C), pages 21-32.
    20. Zhang, Lijuan & Wang, Jinxia & Huang, Jikun & Rozelle, Scott, 2008. "Development of Groundwater Markets in China: A Glimpse into Progress to Date," World Development, Elsevier, vol. 36(4), pages 706-726, April.
    21. Francesco Prota, 2002. "Water Resources And Water Policies," Working Papers 8_2002, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy.


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