A new methodology for assessing the impact of water pricing scenarios : Case study of small-scale irrigation schemes in South Africa
The growing water scarcity worldwide has increased the call for economic instruments to stimulate rational water use in agriculture. In developing countries where currently agricultural water use is often still heavily subsidised, there exists a tendency of introducing water pricing policies to achieve this goal. The exact impact of water pricing policies on irrigation water use or on the farmers' production system is however mostly unknown. This study introduces a new two-stage methodology that allows estimating at farm level the effects of introducing or raising a water price on the agricultural production process and water demand. In the first stage the technical efficiency frontier is constructed and the technical and allocative efficiency levels of each farm are calculated. This representation of the technology is in the second stage used in a profit maximization model. Applying the method to small-scale irrigators in South Africa, it is shown that water demand of farmers is quite responsive even to small changes in the water price. Furthermore, introduction of a water price is shown to significantly decrease farm profit. This appears to be mainly a problem for the poorer farmers.
| Main Authors: | , , , , , |
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| Format: | conference_item biblioteca |
| Language: | eng |
| Published: |
s.n.
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| Subjects: | P10 - Ressources en eau et leur gestion, F06 - Irrigation, E14 - Économie et politique du développement, eau d'irrigation, http://aims.fao.org/aos/agrovoc/c_3958, http://aims.fao.org/aos/agrovoc/c_7252, |
| Online Access: | http://agritrop.cirad.fr/545960/ http://agritrop.cirad.fr/545960/1/document_545960.pdf |
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