IDEAS home Printed from https://ideas.repec.org/a/ags/aergaa/330610.html
   My bibliography  Save this article

The impact of new regulations on water pricing in the agricultural sector: a case study from Northern Italy

Author

Listed:
  • Galioto, Francesco
  • Guerra, Elisa
  • Raggi, Meri
  • Viaggi, Davide

Abstract

The present study intends to investigate the expected impact of changes in pricing policies applied to the use of water resources recently experienced in an agricultural area located in Northern Italy. The study begins introducing the pricing criterion adopted by a water authority in different region supplied by its irrigation network. This pricing criterion is, then, analysed in light of the new regional mandatory requirement on water pricing and modified accordingly. A methodology is developed to evaluate the expected impact of the new pricing policy on the amount of water applied, land allocation and irrigation technology adoption. The methodology follows a two-step approach. In a first step we estimate the yield response to decreased water uses for the main crops cultivated in the area and for different irrigation techniques. In a second step, the estimated production function is integrated into an economic optimisation model to calculate relevant impacts. The results highlight that the change in pricing criteria would not cause substantial variations in water uses. This is mainly due to inelastic demand for water in agriculture. However, the new pricing criteria incentivize the adoption of water saving technologies. The study concludes by addressing that attention should be paid to synergies of water pricing with co-financing subsidies on investments for further promoting the adoption of water saving technologies.

Suggested Citation

  • Galioto, Francesco & Guerra, Elisa & Raggi, Meri & Viaggi, Davide, 2017. "The impact of new regulations on water pricing in the agricultural sector: a case study from Northern Italy," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 0(Issue 2).
    • Handle: RePEc:ags:aergaa:330610
    DOI: 10.22004/ag.econ.330610
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/330610/files/18_2_6.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.330610?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Song, Jianfeng & Guo, Yanan & Wu, Pute & Sun, SHikun, 2018. "The Agricultural Water Rebound Effect in China," Ecological Economics, Elsevier, vol. 146(C), pages 497-506.
    2. Ottmar Röhm & Stephan Dabbert, 2003. "Integrating Agri-Environmental Programs into Regional Production Models: An Extension of Positive Mathematical Programming," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(1), pages 254-265.
    3. Johansson, Robert C., 2000. "Pricing irrigation water : a literature survey," Policy Research Working Paper Series 2449, The World Bank.
    4. Pierre Mérel & Richard Howitt, 2014. "Theory and Application of Positive Mathematical Programming in Agriculture and the Environment," Annual Review of Resource Economics, Annual Reviews, vol. 6(1), pages 451-470, October.
    5. Alban Lika & Francesco Galioto & Davide Viaggi, 2017. "Water Authorities’ Pricing Strategies to Recover Supply Costs in the Absence of Water Metering for Irrigated Agriculture," Sustainability, MDPI, vol. 9(12), pages 1-16, November.
    6. Georgina Moreno & David L. Sunding, 2005. "Joint Estimation of Technology Adoption and Land Allocation with Implications for the Design of Conservation Policy," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(4), pages 1009-1019.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Buttinelli, Rebecca & Cortignani, Raffaele & Caracciolo, Francesco, 2024. "Irrigation water economic value and productivity: An econometric estimation for maize grain production in Italy," Agricultural Water Management, Elsevier, vol. 295(C).
    2. Zamani, Omid & Azadi, Hossein & Mortazavi, Seyed Abolghasem & Balali, Hamid & Moghaddam, Saghi Movahhed & Jurik, Lubos, 2021. "The impact of water-pricing policies on water productivity: Evidence of agriculture sector in Iran," Agricultural Water Management, Elsevier, vol. 245(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cao, Zhaodan & Zhu, Tingju & Cai, Ximing, 2023. "Hydro-agro-economic optimization for irrigated farming in an arid region: The Hetao Irrigation District, Inner Mongolia," Agricultural Water Management, Elsevier, vol. 277(C).
    2. Lee, Hwarang & Eom, Jiyong & Cho, Cheolhung & Koo, Yoonmo, 2019. "A bottom-up model of industrial energy system with positive mathematical programming," Energy, Elsevier, vol. 173(C), pages 679-690.
    3. Liu, Xuan & van Kooten, Gerrit Cornelis & Duan, Jun, 2020. "Calibration of agricultural risk programming models using positive mathematical programming," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(3), July.
    4. Pronti, A. & Zegarra, E. & Vicario, D. Rey & Graves, A., 2024. "Global exports draining local water resources: Land concentration, food exports and water grabbing in the Ica Valley (Peru)," World Development, Elsevier, vol. 177(C).
    5. Siwa Msangi & Sarah Ann Cline, 2016. "Improving Groundwater Management for Indian Agriculture: Assessing Tradeoffs Across Policy Instruments," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 2(03), pages 1-33, September.
    6. Ali, Md Kamar & Klein, K.K., 2014. "Implications of current and alternative water allocation policies in the Bow River Sub Basin of Southern Alberta," Agricultural Water Management, Elsevier, vol. 133(C), pages 1-11.
    7. Obafèmi P Koutchadé & Alain Carpentier & Fabienne Femenia, 2020. "Modeling Corners, Kinks, and Jumps in Crop Acreage Choices: Impacts of the EU Support to Protein Crops," Post-Print hal-04665916, HAL.
    8. Pronti, Andrea & Auci, Sabrina & Berbel, Julio, 2024. "Water conservation and saving technologies for irrigation. A structured literature review of econometric studies on the determinants of adoption," Agricultural Water Management, Elsevier, vol. 299(C).
    9. Umed Temurshoev & Marian Mraz & Luis Delgado Sancho & Peter Eder, 2015. "EU Petroleum Refining Fitness Check: OURSE Modelling and Results," JRC Research Reports JRC96207, Joint Research Centre.
    10. Viaggi, Davide & Raggi, Meri & Gomez y Paloma, Sergio, 2011. "Farm-household investment behaviour and the CAP decoupling: Methodological issues in assessing policy impacts," Journal of Policy Modeling, Elsevier, vol. 33(1), pages 127-145, January.
    11. Martin Henseler, 2022. "The AGREE-model," Working Papers hal-03904598, HAL.
    12. Bulgheroni, Claudia & Sali, Guido, 2008. "Pressure Factors Affecting Lombardy Agricultural System: The Environmental Consequences Of The Fischler Reform," 109th Seminar, November 20-21, 2008, Viterbo, Italy 44827, European Association of Agricultural Economists.
    13. Henseler, Martin & Wirsig, Alexander & Herrmann, Sylvia & Krimly, Tatjana & Dabbert, Stephan, 2009. "Modeling the impact of global change on regional agricultural land use through an activity-based non-linear programming approach," Agricultural Systems, Elsevier, vol. 100(1-3), pages 31-42, April.
    14. Sapino, Francesco & Pérez-Blanco, C. Dionisio & Gutiérrez-Martín, Carlos & García-Prats, Alberto & Pulido-Velazquez, Manuel, 2022. "Influence of crop-water production functions on the expected performance of water pricing policies in irrigated agriculture," Agricultural Water Management, Elsevier, vol. 259(C).
    15. Sauer, Johannes & Zilberman, David, 2009. "Innovation Behaviour At Farm Level – Selection And Identification," 83rd Annual Conference, March 30 - April 1, 2009, Dublin, Ireland 51073, Agricultural Economics Society.
    16. Menozzi, Davide & Fioravanzi, Martina & Donati, Michele, 2015. "Farmer’s motivation to adopt sustainable agricultural practices," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 4(2), pages 1-23, August.
    17. Francois Molle & Jeremy Berkoff, 2009. "Cities vs. agriculture: A review of intersectoral water re‐allocation," Natural Resources Forum, Blackwell Publishing, vol. 33(1), pages 6-18, February.
    18. Sapino, Francesco & Hazimeh, Rim & Dionisio Pérez-Blanco, C. & Jaafar, Hadi H., 2024. "Socioeconomic impact of agricultural water reallocation policies in the Upper Litani Basin (Lebanon): a remote sensing and microeconomic ensemble forecasting approach," Agricultural Water Management, Elsevier, vol. 296(C).
    19. Xu, Hang & Song, Jianfeng, 2022. "Drivers of the irrigation water rebound effect: A case study of Hetao irrigation district in Yellow River basin, China," Agricultural Water Management, Elsevier, vol. 266(C).
    20. C M Yates, 2007. "A positive approach to estimating the weights for quadratic multiple objective programming," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 58(10), pages 1332-1340, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aergaa:330610. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/etagrea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.