Petra Hellegers

Can irrigation water use be guided by market forces? Theory and practice

This paper provides insight into the relevance of market forces to typical problems found in irrigated agriculture. It first considers the theoretical basis for the use of economic instruments, such as volumetric water charges and tradable water rights, then considers their usefulness in the context of five case studies of irrigated areas, in Egypt, India, Indonesia, Morocco and Ukraine. The case studies confirm that competition for scarce water and shortage of funds are widespread. To assess the suitability of economic instruments to achieve water management objectives, insight is provided into the current price paid for irrigation water, the cost of service provision and the value to irrigators. It becomes clear that there is a big gap between the price and value of irrigation water. This means that a considerable increase in the price of water is needed to balance supply and demand, which would reduce farm economic welfare substantially. This socio-political problem, plus the technical and administrative complexity of measuring water, make water pricing an unsuitable approach to balance supply and demand.

Combining remote sensing and economic analysis to support decisions that affect water productivity

In this paper, an innovative method—that combines a technical and socio-economic analysis—is presented to assess the implications of policy decisions on water productivity. In the technical part, the variability in crop water productivity (CWP) is analyzed on the basis of actual water consumption and associated biomass production using the Surface Energy Balance Algorithm for Land (SEBAL). This generates input for the socio-economic analysis, which aims to quantify the foregone economic water productivity (EWP) of policy decisions to allocate water in a social optimal way. The basis for arguments to transfer water between categories of users will be strengthened and be more objective when the productivity in existing and alternative uses is known. The usefulness of such an approach is shown in the South African part of the Inkomati Basin, where according to the Water Act, water has to be reserved for basic human needs and to protect aquatic ecosystems. The opportunity costs, in terms of foregone EWP, of decisions to divert water away from agriculture are assessed. The results show that diverting water away from crops with a low CWP is not always the most cost-effective way in terms of foregone EWP.

Ten building blocks for sustainable water governance: an integrated method to assess the governance of water

A three-step interdisciplinary method to assess approaches to water shortage, water quality and flood risks is presented. This method, based on water system analysis, economics, law and public administration, seeks to create common understanding based on newly developed concepts and definitions. First, generating content knowledge about the water system and about values, principles and policy discourses. Second, providing an organizational process with sufficient stakeholder involvement, insight into the trade-off between social objectives, and attribution of responsibilities in addition to regulations and agreements. Finally, implementing the agreed service level through adequate infrastructure, enforcement and conflict resolution.

Irrigation performance assessment in Crimea, Ukraine

After the collapse of the Soviet Union the performance of irrigated agriculture decreased drastically in Ukraine, due to problems related to the transition from a centrally planned economy to a market economy. Before formulating recommendations on required actions to modify this problematic situation, insight is needed about (i) whether irrigated agriculture is profitable under a market economy; (ii) to what extent the irrigation costs can be recovered from the farmers; and (iii) where irrigation costs can be reduced. Therefore, an economic performance assessment of irrigated agriculture is performed for the North Crimea Canal (NCC) irrigation system in Crimea, Ukraine on the basis of a number of indicators. A spatial analysis is required, because in the remote parts of NCC water has to be lifted several times before it reaches the field and costs of water delivery consequently vary. Analysing irrigation performance in a spatial environment is an extension of existing work. The analysis shows that (i) irrigated agriculture is profitable under a market economy although costs vary considerably (due to water lifting and irrigation technology used); (ii) the irrigation costs can be recovered by farmers; and (iii) can be reduced substantially at distribution and farm level.

Water allocation reform: what makes it so difficult?

The increasingly urgent reform of water allocation is challenged by the complexity of the political dimension, in particular the need to reconcile often competing objectives such as food and energy security and green growth. Moreover, these objectives are unstable, and allocation regimes have to adjust to shifting priorities and circumstances at the lowest cost to society. Climate change generates additional uncertainty in water availability and demand. This calls for robust allocation regimes that can adjust, reallocate and reduce water allocation in an organized way.

Flexible Strategies for Coping with Rainfall Variability: Seasonal Adjustments in Cropped Area in the Ganges Basin.

One of the main manifestations of climate change will be increased rainfall variability. How to deal with this in agriculture will be a major societal challenge. In this paper we explore flexibility in land use, through deliberate seasonal adjustments in cropped area, as a specific strategy for coping with rainfall variability. Such adjustments are not incorporated in hydro-meteorological crop models commonly used for food security analyses. Our paper contributes to the literature by making a comprehensive model assessment of inter-annual variability in crop production, including both variations in crop yield and cropped area. The Ganges basin is used as a case study. First, we assessed the contribution of cropped area variability to overall variability in rice and wheat production by applying hierarchical partitioning on time-series of agricultural statistics. We then introduced cropped area as an endogenous decision variable in a hydro-economic optimization model (WaterWise), coupled to a hydrology-vegetation model (LPJmL), and analyzed to what extent its performance in the estimation of inter-annual variability in crop production improved. From the statistics, we found that in the period 1999–2009 seasonal adjustment in cropped area can explain almost 50% of variability in wheat production and 40% of variability in rice production in the Indian part of the Ganges basin. Our improved model was well capable of mimicking existing variability at different spatial aggregation levels, especially for wheat. The value of flexibility, i.e. the foregone costs of choosing not to crop in years when water is scarce, was quantified at 4% of gross margin of wheat in the Indian part of the Ganges basin and as high as 34% of gross margin of wheat in the drought-prone state of Rajasthan. We argue that flexibility in land use is an important coping strategy to rainfall variability in water stressed regions.

Technology adoption and the impact on average productivity

In this paper, a framework is developed to analyze how the specifications of new technologies and the heterogeneity of micro-units of production affect the input use, the adoption pattern, and the productivity of inputs. It shows that asset-productivity-enhancing (APE) technologies tend to be adopted by micro-units with high-quality assets, while variable-input, efficiency-enhancing (VIEE) technologies tend to be adopted by micro-units with low-quality assets. In both cases, the variable input productivity increases, but the average productivity of the fixed asset may decline in the case of the VIEE technology. The distribution of asset quality and the new technology specifications will therefore determine the impacts of production technology innovations on aggregate behavior and consequently the change in average productivity of the fixed asset.

Joint pollution control in the Lake Tai Basin and the stabilities of the cost allocation schemes

This paper provides insights into the allocation of benefits derived from joint wastewater treatment in the Lake Tai Basin of China and the acceptability and stability of different cost allocation schemes in a trans-jurisdictional water system context. First, the wastewater treatment cost function is estimated and coalition costs are compared to the cost of stand-alone wastewater treatment in each province. Second, two standard and five game theoretical cost allocation schemes are applied to the grand coalition. Results suggest that a cost savings of US

Estimation of river flood damages in Jakarta, Indonesia

46.46 million can be obtained by forming a grand coalition. All allocation schemes were found to be acceptable. Results also suggest that both Shanghai and Jiangsu Province would prefer a proportional allocation scheme based on pollutant discharge, because it would offer them the largest cost savings. But this allocation scheme is the least stable one. Based on the criterion of stability, the Nash-Harsanyi scheme emerges as providing the optimal allocation. Finally, calculation of power and stability indexes suggests Jiangsu Province as an agent is critical to the success of grand coalition formation.

To what extent do improved irrigation technologies extend aquifer life

Flooding is a serious problem in Jakarta, and detailed estimation of flood damage is necessary to design optimal flood management strategies. This study aims to estimate flood damage in a densely populated area in Jakarta by means of a survey, to develop the relationship between flood characteristics and flood damage, and to compare the damage estimates from the survey with the damage estimates obtained by a flood damage model for Jakarta, i.e. the damage scanner model. We collected data on economic losses of the January 2013 flood in a survey of flood-affected households and business units in Pesanggrahan River. The actual flood damage in the survey area is US