Assessing the benefits of irrigation access: the case of southern France vineyards

Agriculture worldwide is threatened by climate change. In particular, declining water resource availability combined with increasing water demand is a key challenge in many rainfed areas, where irrigation appears to be a straightforward adaptation option. In this context, assessing the impacts of irrigation adoption on farm yields and incomes is a necessary step to reflect on the impact of both ex-post and ex-ante policies. We develop an empirical setting to assess the benefits of irrigation access and adoption on estates located in the Languedoc-Roussillon wine producing basin between 2010 and 2020 with new irrigation networks being developed. We merge individual estate national agricultural census data with fiscal data and wine register data. We first rely on a propensity score matching analysis to assess the average treatment effect of different levels of irrigation intensity. We show that, on average, more irrigable land within the farm leads to higher yields per hectare, but we don't find any evidence of an effect on farm income. Then, we develop a generalized propensity score approach to assess the average and marginal treatment effect of different irrigation intensities on farm's operating income.