A.V. Manjunatha

Impact of groundwater markets in India on water use efficiency: a data envelopment analysis approach.

In the hard rock areas of India, overdraft of groundwater has led to negative externalities. It increased costs of groundwater irrigation and caused welfare losses. At the same time informal groundwater markets are slowly emerging and are believed to improve water distribution and to increase water use efficiency in the irrigation sector. These claims are evaluated in this study. For this purpose data was collected from a sample containing three different groups of water users: water sellers, water buyers and a control group of non-traders. First the socio-economic characteristics of these groups are compared. Then the efficiency of water use of the three groups is studied using Data Envelopment Analysis. The results indicate that groundwater markets provide resource poor farmers access to irrigation water, giving them the opportunity to raise their productivity. Water buyers are furthermore shown to be most efficient in their water use, while water sellers are also shown to be more efficient than the control group. The differences in efficiency between the groups are statistically significant. The demonstrated potential of groundwater markets to improve the efficiency of water use and to increase equity in resource access should be taken into account by the Indian government when deciding on their attitude towards the emerging groundwater markets.

Impact of farm level corruption on the food security of households in Bangladesh

In this article, we have analyzed the impact of farm level corruption on households’ food security using survey data collected from 210 Bangladeshi rice farmers. Econometric results confirm that the cost of corruption adversely affects households’ calorie consumption. The marginal effect of corruption is higher for the low expenditure households relative to the high expenditure households. This happens because the high expenditure households exhibit more flexibility in terms of adjusting their budgets and hence, are able to cover the cost of corruption without affecting their food consumption, whereas for the low expenditure households such flexibility is limited and hence are forced to compromise on their food budget. Variables such as the better education of women and land holding also positively contribute to food security.

Impact of informal groundwater markets on efficiency of irrigated farms in India: a bootstrap data envelopment analysis approach

In recent years, the proliferation of private well irrigation systems in South Asia, especially in the hard rock areas of India, has stimulated the growth of informal groundwater markets. These markets allow water-buying farmers, who are unable to invest in wells, to benefit from irrigation while enhancing the economic benefits of water-selling farmers. In this way, they have a positive impact on farm income. On the other hand, they are believed to have contributed to the problem of overexploitation of groundwater aquifers. This study examines the role of groundwater markets in determining the efficiency of irrigated farms. Technical, allocative and economic efficiency of groundwater-irrigated farms is determined, using a bootstrapped data envelopment analysis, and the determinants of the efficiency are explored using a bootstrapped truncated regression. For this purpose, data were collected from three different groups of groundwater-irrigated farmers: (i) a control group of 30 farmers who are neither selling nor buying groundwater; (ii) a group of 30 water-selling farmers; and (iii) a group of 30 water-buying farmers. The results demonstrate that there is substantial technical, allocative and economic inefficiency in the irrigated production due to overuse of inputs and that this inefficiency is higher among the control group farmers followed by water sellers and water buyers. Also in the second-stage regression, participation in the water markets is revealed as an important factor positively affecting efficiency scores. This shows that it is relevant for the government to make appropriate institutional policy interventions to capitalize on the benefits associated with the water markets, while at the same time, ensuring that the negative external effects are avoided.

Farmers’ Participation in Informal Groundwater Market in Hard Rock Areas of Peninsular India

This paper has analysed the factors that influence farmers’ participation in the informal groundwater market using the Craggs 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.