Groundwater Market in West Bengal, India: Does it Display Monopoly Power? (original) (raw)
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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.
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.
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.
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.
Groundwater Market and Agricultural Development in West Bengal: Perspectives from a Village Study
The Japanese Journal of Rural Economics, 2003
Based on intensive village study this paper tries to show that the rapid agricultural growth in West Bengal since the 1980s is mainly attributable to the development of private shallow tubewell irrigation, rather than the agrarian reforms. Large farmers mainly invested in tubewells, but it does not mean that they monopolize agricultural profit as the so-called 'waterlords'. On the contrary, water sales business became less profitable as the number of tubewells increased in the village, and the real water charge declined through the changes of contractual arrangement in the groundwater market. It also comments on the current situation of irrigation subsidy relating to state-operated DTWs and power subsidy given to electrified tubewells, as well as their effects to irrigated farming. Lastly, it points out the large difference in factor shares in rice production between West Bengal and Bangladesh, arguing that West Bengal agriculture is much more equitable in favor of landless laborers.
Groundwater Market and Agricultural Tenancy: A New Form of Collective Inter-Linkage in West Bengal
Indian Journal of Agricultural Economics, 2020
Land ownership in West Bengal has passed through different phases. Initially there were land owners with large tracts of land. Later in the 1960s and 1970s, Government of West Bengal decided to redistribute land from the original land owners to the small and marginal farmers. The operation of this land redistribution was called 'Operation Barga'. In our survey of groundwater markets, we found that land relations are affected by water relations especially in case of groundwater sellers. In this background, the paper attempts to analyse the various water and related land based transactions experienced at the field level in the three agricultural districts of West Bengal. From field level survey of ground water markets and transactions between water sellers and water buyers, it is observed that owners of Groundwater Extraction Mechanisms (WEM), in order to economise their scale of water usage and maximise profit, form a collective monopoly amongst themselves, not only to divide the land to sell water but also to consolidate on the surrounding lands for economies of scale. Although this may lead to higher productivity of agriculture it may also lead to increase in landless farmers. Thus we find a situation in West Bengal which may thwart the very essence of land reforms.
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 ...
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Expansion of groundwater-based irrigation has resulted in the emergence of institutions like groundwater markets in some states of India. The size and growth of these markets depend upon the status of agricultural development, agro-climatic conditions and level of groundwater development. Unlike many states in India, Assam has abundant groundwater reserves but the emergence of informal groundwater markets is noticed in some parts of the state. These markets have ensured access to water to those farmers with limited capability to invest in technologies to extract groundwater. Since the market is residual in nature, sellers resort to selling of excess water only after meeting their own requirements, resulting in inadequate supply of water to buyers. Using field data from two districts of the state and with the help of logistic regression, the study examines factors influencing reliability of water markets from buyers' perspectives. The study finds that the quantity of groundwater purchased, education of buyers, tenancy and the types of fuel used to operate pumpsets are some significant determinants of reliability of groundwater markets.
Social contracts, markets and efficiency: Groundwater irrigation in North India
Journal of Development Economics, 2012
This paper uses primary data to analyze the institutions and informal markets that govern groundwater allocation in the principal sugarcane belt of North India. In contrast to earlier literature, we find that the observed water trades result in efficient water allocation across farms. We interpret this and other stylized facts in terms of a simple bargaining model with limited inter-player transfers. Poor functioning of the power sector leads to reduced pumping and a water supply constraint. Simulations show that power supply reform can significantly increase farm yields, be financed out of the increased farm profits, and provide an instrument to use for attaining intertemporal efficiency in water allocation.