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Determining the disaggregated economic value of irrigation water in the Musi sub-basin in India

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  • Hellegers, Petra
  • Davidson, Brian

Abstract

In this paper the residual method is used to determine the disaggregated economic value of irrigation water used in agriculture across crops, zones and seasons. This method relies on the belief that the value of a good (its price by its quantity) is equal to the summation of the quantity of each input multiplied by its average value. By applying this method to the Musi sub-basin; a subdivision of the Krishna basin in India, it was found that the value of irrigation water use is not equated across the crops, zones and seasons. The reasons why there is no sinlge value of irrigation water use are suggested. As farmers do not have perfect knowledge, do not all possess the same resource base, plant different crops for a variety of reasons (some for a financial return on land instead of water and others for sustenance), possess different crop rotation practices and are possibly riks adverse, they all value water differently. However, the results need to be interpreted with care as the crop with the lowest return to water is probably not the one to be sacrificed if water is restricted, since farmers plant crops for a variety of reasons (and sometimes not for the highest return to water that they can achieve).

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  • Hellegers, Petra & Davidson, Brian, 2010. "Determining the disaggregated economic value of irrigation water in the Musi sub-basin in India," Agricultural Water Management, Elsevier, vol. 97(6), pages 933-938, June.
    • Handle: RePEc:eee:agiwat:v:97:y:2010:i:6:p:933-938
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    References listed on IDEAS

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    1. Mesa-Jurado, Maria A. & Piston, Juan Maximo & Giannoccaro, Giacomo & Berbel, Julio, 2008. "Irrigation Water Value Scenarios for 2015: Application to Guadalquivir River," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6450, European Association of Agricultural Economists.
    2. Arthur Grimes & Andrew Aitken, 2008. "Water, Water Somewhere: The Value of Water in a Drought-Prone Farming Region," Working Papers 08_10, Motu Economic and Public Policy Research.
    3. Gulati, Ashok & Narayanan, Sudha, 2003. "The Subsidy Syndrome in Indian Agriculture," OUP Catalogue, Oxford University Press, number 9780195662061.
    4. Appels, David & Douglas, Robert A. & Dwyer, Gavan, 2004. "Responsiveness of Demand for Irrigation Water: A Focus on the Southern Murray-Darling Basin," Staff Working Papers 31924, Productivity Commission.
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    2. Tesfaye, Abonesh & Wolanios, Nitsuhe & Brouwer, Roy, 2016. "Estimation of the economic value of the ecosystem services provided by the Blue Nile Basin in Ethiopia," Ecosystem Services, Elsevier, vol. 17(C), pages 268-277.
    3. Bouma, Jetske A. & Biggs, Trent W. & Bouwer, Laurens M., 2011. "The downstream externalities of harvesting rainwater in semi-arid watersheds: An Indian case study," Agricultural Water Management, Elsevier, vol. 98(7), pages 1162-1170, May.
    4. George, Biju & Malano, Hector & Davidson, Brian & Hellegers, Petra & Bharati, Luna & Massuel, Sylvain, 2011. "An integrated hydro-economic modelling framework to evaluate water allocation strategies II: Scenario assessment," Agricultural Water Management, Elsevier, vol. 98(5), pages 747-758, March.
    5. 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).
    6. Davidson, Brian & Hellegers, Petra & George, Biju & Malano, Hector, 2019. "The opportunity costs of increasing reliability in irrigation systems," Agricultural Water Management, Elsevier, vol. 222(C), pages 173-181.
    7. George, Biju & Malano, Hector & Davidson, Brian & Hellegers, Petra & Bharati, Luna & Massuel, Sylvain, 2011. "An integrated hydro-economic modelling framework to evaluate water allocation strategies I: Model development," Agricultural Water Management, Elsevier, vol. 98(5), pages 733-746, March.
    8. Ziolkowska, Jadwiga R., 2015. "Shadow price of water for irrigation—A case of the High Plains," Agricultural Water Management, Elsevier, vol. 153(C), pages 20-31.
    9. Ziolkowska, Jad R., 2018. "Profitability of Irrigation and Value of Water in the Southern High Plains," 2018 Annual Meeting, August 5-7, Washington, D.C. 274355, Agricultural and Applied Economics Association.

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