Evaluation of drought management in irrigated areas

This paper focuses on the economic consequences of droughts for the irrigation sector. We develop a dynamic‐recursive mathematical programming farm model that assumes imperfect mobility of capital and labour as well as rational expectations about future water availability. The model is calibrated to 12 representative farms belonging to three irrigation communities of the Guadalquivir Basin (south Spain) and used to simulate the 1991–1997 period, which included 3 years of intense drought. Results indicate that the drought imposed significant costs on farmers, but show also that water managers partly exacerbated these costs by allocating excessive amounts of water to irrigators in the abundant years. The model is also used to evaluate the benefits of a perfect water supply forecast and to simulate the economic gains of a voluntary water banking scheme. Results show that the benefits resulting from the perfect forecast of water supply 1 year ahead would represent a relative gain of 5%. However, a voluntary banking system would allow farmers to increase their benefits by 32–82% depending on the supply system.     

Spot water markets and risk in water supply

Water availability patterns in semiarid regions are typically extremely variable. Even in basins with a highly developed infrastructure, users are subject to unreliable water supplies, incurring substantial economic losses during periods of scarcity. More flexible instruments, such as voluntary exchanges of water among users, can help users to reduce risk exposure. This article looks at the effects of spot water markets on the economic risk caused by water availability variations. Our theoretical and empirical risk analyses are based on the random profits of water users. Profit probability density functions are formally and graphically characterized for both water sellers and buyers under several possible market outcomes. We conclude from this analysis that, where water supply is stochastic, water markets unambiguously reduce both parties' risk exposure. The empirical study is conducted on an irrigation district in the Guadalquivir Valley (Southern Spain), where there is a high probability of periods of extreme water scarcity. Water demand functions for the district representative irrigators and a spatial equilibrium model are used to simulate market exchanges and equilibrium. This programming model is combined with statistical simulation techniques. We show that the profit probability distribution of a representative irrigator is modified if water exchanges are authorized, leading to risk reductions. Results also indicate that if the market were extended to several districts and users that are subject to varying hydrological risk exposure, extremely low‐profit events would be less likely to occur. In sum, we show that exchanging water in annual spot markets can reduce farmers' economic vulnerability caused by water supply variability across irrigation seasons. These results support the water policy reform carried out in Spain in 1999 to allow for voluntary water exchanges among right holders.     

Soil and water conservation technologies: a buffer against production risk in the face of climate change? Insights from the Nile basin in Ethiopia

This study investigates the impact of different soil and water conservation (SWC) technologies on the variance of crop production in Ethiopia to determine the risk implications of the different technologies in different regions and rainfall zones. Given the production risks posed by climate change, such information can be used by decision makers to identify appropriate agricultural practices that act as a buffer against climate change. Results show that SWC investments perform differently in different rainfall areas and regions of Ethiopia and that the effectiveness of technologies such as irrigation, fertilizer, and improved seeds often depends on whether these investments are coupled with SWC measures. These results underscore the importance of the selection of appropriate combinations of technologies and careful geographical targeting when promoting and scaling up SWC technologies for adaptation to climate change.     

Macro–micro feedback links of water management in South Africa: CGE analyses of selected policy regimes

The pressure on an already stressed water situation in South Africa is predicted to increase significantly under climate change, plans for large industrial expansion, ongoing rapid urbanization, and government programs to provide access to water to millions of previously excluded populations. This article employs a general equilibrium approach to examine the economy‐wide impacts of selected macro and water‐related policy reforms on water use and allocation, rural livelihoods, and economy at large. The analyses reveal that implicit crop‐level water quotas reduce the amount of irrigated land allocated to higher‐value horticultural crops and create higher shadow rents for production of lower‐value water‐intensive field crops, such as sugarcane and fodder. Accordingly, liberalizing local water allocation within irrigation agriculture is found to work in favor of higher‐value crops, and expand agricultural production and exports and farm employment. Allowing for water trade between irrigation and nonagricultural uses fuelled by higher competition for water from urbanization leads to greater water shadow prices for irrigation water with reduced income and employment benefits to rural households and higher gains for nonagricultural households. The analyses show difficult trade‐offs between general economic gains and higher water prices, which place serious questions on subsidizing water supply to irrigated agriculture, i.e., making irrigation subsidies much harder to justify.     

Incentives to managers or participation of farmers in China's irrigation systems: which matters most for water savings,farmer income,and poverty?

The overall goal of our article is to better understand which matters for water savings, farmer income and poverty in China's irrigation systems: incentives to managers or participation of farmers. To pursue this goal, the article has three objectives. First, we track the evolution of water management reform, examining the practice of providing incentives to managers, and increasing the participation of farmers. Second, we identify the impact of water management reform on crop water use. Specifically, we want to measure whether or not incentives to managers and farmer participation in water management institutions affect the performance of the irrigation system. Because we also are interested in the potential results of water management reform, the article explores how changes in incentives and farmer participation affect farmer income and poverty. Based on a random sample of 51 villages and 189 farmers in four large irrigation districts in Ningxia and Henan provinces, both in China's Yellow River Basin, our results show that the two major forms of water management reform, water users' associations (WUAs) and contracting, have begun to systematically replace traditional forms of collective management. Our analysis demonstrates, however, that it is not the nominal implementation of the reform that matters, but rather it is the creation of new management institutions that offer water managers monetary incentives that lead to water savings. In contrast to the original design of China's reform policies, participation of farmers has not played a role in saving water. Importantly, given China's concerns about national food production and poverty alleviation, the reductions in water, at least in our sample sites, do not lead to reductions in income and do not increase the incidence of poverty.     

Irrigation technology adoption and its implication for water conservation in the Texas High Plains: a real options approach

Water shortage has been a significant issue for several decades in the Texas High Plains. Agriculture has been identified as the main activity contributing to this shortage. To address this issue, many efforts have been focused on the possible adoption of sophisticated irrigation systems with high levels of water application efficiency. In this study, the entry and exit thresholds for the low‐energy precision application (LEPA) system are analyzed simultaneously in cotton farming in the Texas High Plains using a real options approach. The results show that the LEPA system is profitable only when cotton price is set above $1.59/kg. The exit (entry) threshold is consistently low (high) over a range of values for parameter changes including investment cost, exit cost, variable cost, risk‐adjusted discount rate, and volatility rate, so it is unlikely that farmers with irrigation systems in place would leave them easily. This implies that to attain the goal of saving water, Lubbock County needs to focus on convincing current farmers to replace old irrigation systems with new ones.     

Irrigation water productivity in Cambodian rice systems

Knowledge of the marginal productivity of water is crucial for decisions about its allocation between uses, which is particularly important in the context of increasing competition for water. Using primary, plot‐level panel data, this article estimates the marginal productivity of water from supplementary irrigation in lowland rice systems in Cambodia, taking into account farmer and plot heterogeneity as well as self‐selection of supplementary irrigation. Our estimates indicate a range of elasticities for rice output with respect to water inputs of between 0.057 and 0.069 for wet season production, substantially lower than previous estimates based on either aggregate or trial data. We discuss the policy implications of these results, in particular with respect to the utility of demand management policies and the challenges they pose to the decentralization of water management to Farmer Water Users Groups.     

Water scarcity and the impact of improved irrigation management: a computable general equilibrium analysis

Increasing water scarcity combined with an increasing demand for food and water for irrigation call for a careful revision of water use in agriculture. Currently, less than 60% of all the water used for irrigation is effectively used by crops. Based on the new version of the GTAP‐W model we analyze the effect of potential water savings and the welfare implications of improvements in irrigation efficiency worldwide. The results show that a water policy directed to improve irrigation efficiency led to global and regional water savings, but it is not beneficial for all regions. The final effect on regional welfare will depend on the interaction of several different causes. For instance, higher irrigation efficiency changes opportunity costs and reverses comparative advantages, modifying regional trade patterns and welfare. For water‐stressed regions the effects on welfare are mostly positive. For nonwater scarce regions the results are more mixed and mostly negative. The results show that exports of virtual water are not exclusive of water abundant regions.     

Irrigation water pricing: differential impacts on irrigated farms

European water policy, as set out in the Water Framework Directive (WFD), requires all EU Member States to implement volumetric water pricing at rates that roughly cover the total costs of providing water services. The objective of this paper is to develop a methodology that, for the different types of farm in an irrigable area, will enable us to analyse the differential impact that a pricing policy for irrigation water would have. For this purpose, Multi-Attribute Utility Theory (MAUT) mathematical programming models were used. The methodology is implemented on a representative area in the Duero Valley in Spain. Our results show the usefulness of differential analysis in evaluating the impact of a water pricing policy. This allows significant differences in the evolution of agricultural incomes to be observed, as well as the recovery of costs by the State, demand for agricultural employment and the consumption of agrochemicals resulting from rising prices of irrigation water in various groups of farmers within a given irrigated area.     

The role of common pool problems in irrigation inefficiency: a case study in groundwater pumping in Mexico

Groundwater depletion is a serious problem in Mexico. Several policy alternatives are currently being considered in order to improve the efficiency of irrigation water use so that extraction of groundwater is diminished. An understanding and quantification of different sources of inefficiency in groundwater extraction is critical for policy design. Survey data from a geographically extensive sample of irrigators is used to gauge the importance of common pool problems on input‐specific irrigation inefficiency. Results show that mechanisms of electricity cost sharing implemented in many wells have a sizable impact on inefficiency of irrigation application. Moreover, irrigation is very inelastic to its own unitary cost. Therefore, results suggest that policies aimed at eliminating electricity cost‐sharing mechanisms would be significantly more effective than electricity price‐based policies in reducing irrigation application. Results also show that well sharing does not affect groundwater pumping significantly, suggesting either a limited effect of individual pumping on water level or absence of strategic pumping by farmers sharing the wells.     

Impacts of changing water inflow distributions on irrigation and farm income along the Drâa River in Morocco

Irrigation water is essential for agriculture in the arid Drâa River basin in Morocco but climate change leads to increasingly unreliable water supply in the area. This article analyzes impacts of changing water inflow distributions on irrigation and farm income extending a conjunctive river basin model toward a stochastic modeling approach. Regional climate scenarios are used to derive a maximum likelihood density estimate of current and future water supplies. Based on these distributions, Monte Carlo simulations are performed to obtain stochastic model results on surface and groundwater irrigation as well as economic indicators for six oases along the river. The probability of farmers to receive revenues below the subsistence level is around 2% under current conditions, but this is likely to rise to rates of 6% to 15% depending on the underlying climate change scenario. The composition of water sources for irrigation will shift to more groundwater use. The river basin model is able to represent complex spatial interactions between oases as well as a partial complementarity between groundwater and surface water irrigation due to salinity management effects. Interestingly, the value of groundwater is not necessarily increasing under future climatic conditions as salinity problems are aggravated with expanded groundwater use.     

Adoption of farm‐based irrigation water‐saving techniques in the Guanzhong Plain,China

This article analyses adoption of farm‐based irrigation water saving techniques, based on a cross‐sectional data set of 357 farmers in the Guanzhong Plain, China. Approximately 83% of the farmers use at least one farm‐based water‐saving technique. However, the traditional, inefficient techniques border and furrow irrigation are still prevalent whereas the use of advanced, more efficient techniques is still rather rare. We develop and estimate an adoption model consisting of two stages: awareness of water scarcity and intensity of adoption. We find that awareness of water scarcity and financial status enhance adoption of more advanced techniques whereas access to better community‐based irrigation infrastructure discourages it. We furthermore find both community‐based irrigation infrastructure and farm‐based irrigation water‐saving techniques have mitigating effects on production risk. From the results it follows that adoption can be stimulated via financial support and via extension aimed at enhancing awareness of water scarcity.     

The impact of water price uncertainty on the adoption of precision irrigation systems

We examine whether a firm is more or less likely to adopt precision technology when input prices are stochastic. The results are important to determining whether programs and contracts that reduce input price uncertainty may deter the adoption of conservation practices. An economic model of the technology adoption decision shows that the net effect of input price risk is ambiguous and depends on several factors including the shutdown effect, the mean price effect, the precision expansion effect, and the risk aversion effect. An empirical implementation of the model relies on data on water price and irrigation technology adoption observed in a California irrigation district over the period 1999–2002. The results show that a stable input price increases the adoption of precision technology, but the impact depends on crop choice and land quality characteristics.     

上游水库在线水量调度策略设计与分析

上游水库兼顾灌溉和防洪两项功能,面临着如何调度水量的问题。针对在一定时间(可分为n时段)内上游水库调度使其收益尽可能大的问题,从离线与在线两个方面进行研究。当每个时段来水量可提前预知时,建立了离线优化模型,采用动态规划方法求解;当每个时段来水量无法预知时,设计了最佳竞争比的在线策略并证明其是最优策略。     

DEVELOPMENT AND ANALYSIS OF INPUT-OUTPUT RELATIONS FOR IRRIGATION WATER

Recent developments in climatology mean that economists now have a highly acceptable physical theory which can underlie their analysis of the economic aspects of water as an input to the production process, as a source of production instability, and as a major component of error in their estimated crop production functions. This paper presents a model and a procedure for synthesising and analysing irrigation water crop input output relations based on this theory. The importance of time of application of water as well as quantity is shown. Different frequencies of irrigation are optimal at different times of the growing season.     

Peer effects in the diffusion of water‐saving agricultural technologies

We investigate the role of peer effects in the diffusion of an important water‐saving irrigation technology: low energy precise application (LEPA). Using detailed irrigation behavior data for growers in the High Plains Aquifer region of Kansas covering 1990–2014, we find clear evidence of peer influence in adoption of LEPA, net of environmental factors. Specifically, an additional neighboring LEPA installation within 1 km increases the probability of adoption by about 0.3 percentage points, on average, and this effect diminishes with distance. Our empirical estimates indicate that in the absence of peer effects, LEPA adoption would have been about 10% lower (1,000–1,600 fewer installations) per year. In addition, we find that growers install LEPA in response to higher energy prices.     

Policy interventions to promote the adoption of water saving sprinkler systems: the case of lettuce on the Gnangara Mound

The potential for improving irrigation scheduling decisions and adoption of more efficient irrigation systems is explored using a bioeconomic simulation model of lettuce production on the Gnangara Mound near Perth, Western Australia. Sandy soils with poor water and nutrient holding capacity are associated with declining marginal productivity of water at high water use, which would create an incentive to reduce water use and to adopt closer sprinkler spacing if farmers had correct information about the declining marginal productivity of water. Incorrect perceptions regarding water–yield relationships lead to over use of water by up to 50 per cent and reduce profits by 475 per crop hectare (12 per cent) in the short run, and remove the incentive to adopt more efficient systems in the long run. Higher water prices create an incentive to reduce irrigation scheduling time in the short term and to adopt more uniform sprinkler systems, and tend to reduce the discrepancies associated with poor information about the marginal productivity of water. The low level of adoption of efficient irrigation systems in the region might be explained partly by historically poor water governance and insufficient extension regarding water productivity and technology.     

New markets and technological change for the traditional cereals in semiarid sub-Saharan Africa: the Malian case

During the last three decades in sub‐Saharan Africa, development and research resources have concentrated on the higher‐rainfall and irrigated regions, especially on export crops and the principal food crops grown there. There has been much less concern and investment in semiarid regions without irrigation. Another negative factor has been the lack of public policy concern with the profitability of the basic food crops. With good weather, prices collapse. With bad weather, governments and NGOs dispense food crops as food aid or at subsidized prices. This article documents the importance of the demand side to facilitate diffusion of new technologies for the basic food commodities of semiarid regions—the traditional cereals. With farm programming models aggregated into a sector model, the combination of technological change and demand shifts for sorghum are evaluated in one semiarid region where the traditional cereals are concentrated. It focuses on combining policies to increase the prices farmers receive after introduction of technologies that use higher input levels. It also compares benefits of a strategy that focuses on yield and demand increases for a traditional cereal of the semiarid region, sorghum, with two alternative strategies for the higher‐rainfall zone.