Factors Influencing Reliability of Groundwater Markets in Less Water Scarce Regions: A Case of Assam in Eastern India (original) (raw)
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Water Policy
In response to the development of groundwater-based irrigation technology, institutions such as groundwater markets have emerged in many parts of India. While the farmers’ decision to buy water is shaped by issues such as capital scarcity, size of operational holdings, number of fragmented plots, farmers’ access to institutional credit, etc., there are spatial variations of factors affecting farmers’ participation in the market due to its localised nature. In view of the fact that the number of studies on water markets from water-abundant regions of India is very limited, the present study was carried out to unearth the factors influencing the water-buying decisions of farmers in the groundwater market in Assam in the eastern part of India. Using field data from two districts of the state, viz. Nagaon and Morigaon and with the help of logit regression, this study examines the determinants of water-buying decisions of farmers in Assam. The results of the logit analysis show that own ...
Structure, Determinants and Efficiency of Groundwater Markets in Western Uttar Pradesh
2006
Irrigation is a vital ingredient in the modern agriculture, groundwater development through modern water extraction mechanisms (WEMs) have therefore, been receiving greater emphasis in recent past. However, the ownership of private WEMs is confined mostly to the large farmers. The small and marginal farmers and even large farmers with fragmented holdings are buyers of irrigation water from the neighbouring WEM-owners. This has led to spontaneous emergence of groundwater markets. Although the water markets benefit both buyers and sellers in one or the other way, they have created certain implications in the utilization of this resource. The present study has examined the structure, determinants and efficiency of groundwater markets and has suggested policy options for the realization of equitable benefits from this resource in Western Uttar Pradesh. It is observed that a large proportion (82 %) of the farm holdings enter into one or the other form of water market activities. The number of buyers decreases as the farm-size increases, while the number of sellers increased with the increase in the size of farm. The buying of groundwater is favoured by the farmers with small size and fragmented holdings, low education attainment and less probability of joint-ownership of a WEM. The possibility has been shown of increasing the productivity in major crops like sugarcane and wheat by reducing the excessive water-use on self-users farms, which in turn would increase the availability of water on the buyers' farms. The study has identified various policy options which would lead to minimizing the inequitable distribution of benefits and improving the efficiency of water-use under the prevailing groundwater markets system.
2006
The emergence of groundwater markets has helped in mitigating inequality in physical access to the groundwater resources, on the one hand, but on the other hand, it may lead to exploitation of the buyers of water, i.e. resource-poor, small farmers. For the sellers of water, it is becoming a remunerative business economically, leading to serious environmental as well as social concerns. The present study conducted in the arid and semiarid zones of Rajasthan has addressed these issues. The study has shown that prevailing terms of water transactions, particularly 'in-kind' terms, lead to the over-exploitation of groundwater resources. The credit policies and the power pricing policies of the government also help in the unsustainable and inequitable use of this resource. Water policy ensuring mandatory recharging of the abandoned wells mainly for the sellers of water is the need of hour for the efficient and sustainable use of this scarce natural resource. The analysis of farmers' decision to participate in water markets employing logit regression has suggested that the farmers having higher fragmented landholdings have higher probability of buying groundwater. Joint ownership of wells is negatively associated with the farmers' probability of buying groundwater. This implies that the consolidation of holdings or installing cooperative wells may economize the irrigation investment and lead to efficient management of resources of the farmers and sustainable utilization of water. In the national and state water policies as well as in the Model Bill to regulate and control the groundwater resources, this aspect has not been given any emphasis.
GeoJournal, 2019
The continuous demand of groundwater for irrigation in the agricultural sector has shown remarkable development of groundwater resources in Haryana. Small farmers with limited resources cannot install deep tube wells and therefore have to buy groundwater from large farmers for irrigation. These groundwater irrigation markets have emerged as robust and leading irrigation institutions. Their prevalence supports about 15% of the total irrigated area. Amongst the different size of land ownership, the small farmers irrigate nearly 44% of their cultivated land with purchased water from the neighboring large farmers. The cropping intensity achieved by groundwater buyers is far higher than the sellers. However, on an average each seller supports 1.6 buyers, 6.1 ha of land and 34% of the buyer's land. Generally, the sellers exploit groundwater buyers in groundwater transactions. The sellers follow the principle of profit maximization and do not negotiate with buyers on groundwater irrigation markets norms. The major objective of this study is to highlight the patterns and practices of groundwater irrigation markets in Haryana.
Groundwater Market in West Bengal, India: Does it Display Monopoly Power
Based on village-level primary household survey in three districts of West Bengal, the present study tries to understand the groundwater market structure using the standard market theory. Comparing the internal rate of return of private investors on groundwater irrigation with past studies, it is found that although the degree of monopoly has gone down in the state over time, a certain element of monopoly still exists in the groundwater market. The estimates of price-tomarginal cost ratios and the Lerner index amply demonstrate the existence of high degree of monopoly in groundwater market. The study also shows that since banks give loans based on collateral, it is the large farmland owners who benefit from these bank loans for installation of electric submersibles for groundwater irrigation. Factors such as availability of rain and canal water, advance payment for water, distance of the land from the irrigation source, and maintenance and labour cost of water extraction mechanism also affect the price of water. As the groundwater extraction increases, it leads to lowering of the groundwater table leading to increasing cost for the water seller who in effect transfers the increasing cost to price leading to a rise in groundwater prices. This is a cause of concern not only for the small and marginal farmers but also for the sustainability of groundwater. Studies in Microeconomics 6(1-2) 1-25
Farmers’ Participation in Informal Groundwater Market in Hard Rock Areas of Peninsular India
Agricultural Economics Research Review, 2014
This paper has analysed the factors that influence farmers' participation in the informal groundwater market using the Cragg's double hurdle model. For the study, primary data from 171 groundwater farmers belonging to the Eastern Dry Zone of Karnataka were used. The empirical results have shown that agricultural credit and farmers having failed wells positively influence farmers' probability of water buying. With increasing water cost, the farmers are more likely to purchase or sell water and the quantity of water purchased or sold decreases with the increase in irrigation cost. The well-owners who have drip irrigation and land fragments are more likely to sell water. It has been observed that in the study area farmers purchase water at high prices and hence an effective agricultural water pricing is needed. Another option could be to promote joint investment in irrigation which takes care of credit problems and negative externalities of overdraft, resulting in efficient use of resources.
Agricultural Economics Research Review
This paper examines structure, determinants and efficiency of groundwater markets and suggest policy measures to contain over-extraction of groundwater in the Union territory of Puducherry on east coast of India. The analysis of structure of groundwater market shows a large proportion (82%) of the farmers entering into one or the other activities related to water market. The number of water buyers decreases with increase in farm size, while the number of sellers increases with the increase in farm size. The analysis of conduct of groundwater markets reveals a seller-buyer concentration ratio of 1:2.39. The farmers having less operational landholdings, higher fragmented landholdings and low capacity water lifting device have a higher probability of buying groundwater. Further, selling of groundwater is more concentrated among farmers with large operational holdings, less fragmentation and joint ownership of a modern water extraction mechanism (WEM). Resource use efficiency analysis indicates a close association between increased productivity and better irrigation management due to ownership of the modern WEMs. The Nash equilibrium framework used to study the bargaining power brings out that the level of irrigation of buyers and sellers as key factors in price determination in groundwater market. The selling price of groundwater is found markedly higher than the total cost of water extraction, implying exploitative nature of groundwater markets.
Groundwater markets under the water scarcity conditions: The upland Balochistan region of Pakistan
2011
The study documents comprehensive analysis on informal groundwater marketing in upland Balochistan, Pakistan. Informal groundwater markets are emerging a feasible option to manage increasing water scarcity and declining water tables as a result of poor groundwater policies. First we evaluated the groundwater trading mechanism and later we empirically examined factors affecting the groundwater trading using logit econometric models. We did not observe any permanent groundwater transactions; only temporary groundwater exchange takes place. Two common transactions methods were noted – water in exchange for given crop share and cash payment per hour (flat rate per hour). In all, 60% respondents reported selling water for crop share. This form of transaction method intensifies as we move from high altitude areas to low altitude areas because water and land are relatively scarce at higher uplands. In general, the crop sharing rates were 33% of the crop output. Water trading in cash transa...
Kathmandu Valley in Nepal is the home for over 2.5 million people. The government-run utility serves water to almost 78% of the valley's denizens. However, water supply is always inadequate (quality and quantity). In the context of increasing deficit between water demand and supply, groundwater markets for domestic water use evolved in the valley since the mid-1990s. It is expanding rapidly in the recent years. The markets are helping reduce the deficits, however, posing increased threats to groundwater depletion and associated consequences. This paper analyzes emergence, spread, and functioning of the groundwater markets in the valley based on data from questionnaire survey and secondary sources. It further sheds light on the markets' advantage in terms of reducing demand-supply gaps and disadvantages in terms of impacts in groundwater environment. Finally, existing regulatory provisions related to the groundwater markets and status of interventions is also discussed. This presents an interesting case study of how groundwater is turning into a 'business commodity' in the cities of developing nations, especially for the purpose of domestic uses.
2012
The study documents comprehensive analysis on informal groundwater marketing in upland Balochistan, Pakistan. Informal groundwater markets are emerging a feasible option to manage increasing water scarcity and declining water tables as a result of poor groundwater policies. First we evaluated the groundwater trading mechanism and later we empirically examined factors affecting the groundwater trading using logit econometric models. We did not observe any permanent groundwater transactions; only temporary groundwater exchange takes place. Two common transactions methods were notedwater in exchange for given crop share and cash payment per hour (flat rate per hour). In all, 60% respondents reported selling water for crop share. This form of transaction method intensifies as we move from high altitude areas to low altitude areas because water and land are relatively scarce at higher uplands. In general, the crop sharing rates were 33% of the crop output. Water trading in cash transactions was practiced by 40% of respondents. The charges per hour depend on the altitude, with an average price of Rs. 2 100, Rs.112, and Rs.205 per hour were reported at low, medium and high altitudes, respectively. This form of water marketing intensifies as we move from low to high altitude areas, mainly because of relatively abundant water and land in low altitude areas.