An economic model of waterlogging and salinization in arid regions

Waterlogging and salinization arise in arid areas largely because two essential resources, irrigation water and the assimilative capacity of unconfined aquifers, are not priced or allocated correctly to reflect scarcity values and opportunity costs. Farm-level and project-level models of crop production are examined to identify policies that will encourage farmers to consider opportunity costs and the effects of irrigation and leaching on depth to regional water tables. Appropriate policies include volumetric water pricing, water markets, tradable water allotments, adjustments in area-based cost recovery programs, and incentives for farmers to use irrigation methods that reduce deep percolation. Implementing appropriate versions of these policies may reduce the rate of increase in waterlogged and saline areas.