Removing barriers to facilitate efficient water markets in the Murray-Darling Basin of Australia

We discuss the role and characteristics of water markets in Australia in facilitating efficient water allocation. Administrative, regulatory and/or political barriers to effective functioning of water markets are reviewed with a focus on the southern Murray-Darling Basin (MDB) region of Australia. A mathematical model is developed to estimate the costs of existing restrictions and the benefits from potential changes in water markets (e.g., removing barriers in temporary water markets). The modelling results reveal that expanding trade leads to an increase in mean annual net returns from AU $2502 million to AU $2590 million (i.e., an increase of AU $88 million). When the current volume restrictions, exchange rates, and trading charges are accounted for, mean annual net returns reduced from AU $2590 million to AU $2573 million (i.e., a reduction of AU $17 million). The exclusion of any of the three southern MDB states from the interstate water trading imposes significant costs. If South Australia, New South Wales or Victoria withdraws from the water market, net returns are reduced by AU $27 million, AU $31 million and $63 million, respectively. The paper outlines the policy implications of strategies to remove market barriers and to facilitate efficient and effective water trading.     

Barriers to water markets in the Heihe River basin in northwest China

Tradable water rights systems are becoming an important way to achieve distributive efficiency for water resources. However, it is not easy for countries or regions to establish water markets due to the existence of various barriers. In early 2002, the Ministry of Water Resources (MWR) of China initiated an experimental project—Building Water-saving Society in Zhangye City. This project was the first of its kind in China. The aim of the project was to establish a new water use rights (WUR) system with tradable water quotas and to reallocate water resources reasonably and efficiently through market-based instruments. This paper presents the research done on the system and water markets. It has been found that that the system is hard to implement well and that WUR trading is not popular. The barriers to implementing a WUR system are social and administrative in nature. WUR trading faces management, legal, administrative, and fiscal barriers. We discuss why these barriers exist and we provide policy recommendations to overcome them.     

Water markets and soil salinity nexus: Can minimum irrigation intensities address the issue?

Agricultural water markets can facilitate adjustments to water scarcity and competition and enhance economic efficiency, but markets cannot automatically balance efficiency, equity and environmental sustainability goals. The consequences of water trading on soil salinity in irrigation areas are not yet fully understood, but recognized as an issue that needs to be analysed. This paper explores the nexus between water trading and groundwater-induced soil salinity in a selected irrigated area in the Murray-Darling Basin. Results show that minimum irrigation intensities must be met to flush salts out of the root zone especially in shallow water table/high salinity impact areas. Such minimum irrigation intensities are helpful but not necessarily in deep water table/low salinity impact areas. Should water markets lead to permanent water transfers out of mature irrigation areas, minimum irrigation intensity needs might not be met in high salinity impact areas, causing substantial negative impacts on resource quality and agricultural productivity. Water trading that adds to salinity cannot be economically viable in the long run. The tradeoffs between water trading and environmental and equity goals need to be determined. This work contributes to the wider debate on Australian water policy aimed at achieving water security through water trading in the Murray-Darling Basin.     

灌溉水价与灌区灌溉用水量关系研究

运用经济学理论分析了灌溉水价与灌区灌溉用水量的关系,根据2000—2009年对关中地区冯家山、羊毛湾、石堡川3个灌区的实际调查资料,对不同灌区建立农业灌溉用水需求函数,计算灌溉用水需求价格弹性。研究表明,关中地区3个灌区中,石堡川灌区弹性最高,为-1.11;冯家山灌区和羊毛湾灌区弹性分别为-0.47和-0.69,即灌溉水价提高1%,灌溉用水量将下降0.47%～1.11%。对于现行水价较低的灌区,水价调高对该灌区将产生明显的节水效应;对现行水价较高的灌区,水价继续调高。     

Estimating the potential gains from water markets: a case study from Tunisia

Water markets can improve water use efficiency through the transfer of water to users who can obtain the highest marginal return from using it. Existing water markets are implemented among farmers or between farmers and urban water companies or hydropower companies. Several studies have shown that farmers may benefit from trading water mainly in countries where water scarcity is increasing and new water supply projects are either very costly or not possible because of environmental concerns. This paper estimates the potential benefits and losses of implementing water market among farmers and between farmers and urban water company in Tunisia. We used linear programming to examine four separate farm models and an aggregate model. The method is applied to an irrigation area of 4500 ha in Northern Tunisia. Results indicate that water trading among farmers would be quite limited and would have a minor impact on farmers’ income. In contrast, the market among farmers and the urban water company offers higher volumes of water trades to urban users and helps increase farmers’ profitability by up to 7.9%. The sale of water to the urban company is accompanied by a decrease in occasional labor by as much as 34.8% and a decrease of up to 17.6% in farmers’ expenditures for inputs and machinery. Additionally, results obtained in this paper show that inter-year storage of irrigation water may be more advantageous than selling water to the urban utility. Whether farmers would opt to sell water or inter-temporarily store it would depend on the establishment of water rights and the empowerment of farmers.     

Pathways to breaking the poverty trap in Ethiopia: Investments in agricultural water, education, and markets

Investments in agricultural water management should complement or strengthen the livelihood and coping systems of the rural poor, and should thus be instrumental for breaking the poverty trap in Ethiopia. Underdeveloped water resources constrain progress towards poverty reduction. We examine linkages and complementarities between agricultural water, education, markets and rural poverty through an empirical study using household level data from selected villages in southern Ethiopia. We show that investments in irrigation can contribute to poverty reduction, but the poverty reducing impacts of irrigation water are greater when human capital and rural markets are well developed. The size of landholding, access to irrigation water, on-farm land and water conservation practices, literacy of the household head, and years of education of adults are all significant determinants of household welfare, and thus potential pathways for reducing poverty. Expansion of cultivated land, particularly irrigated land, universal literacy, and an extra school year for adults all reduce poverty, but reductions in poverty are greater when irrigation is combined with universal literacy. These findings call for simultaneous investments in agricultural water, education, markets and related policy support measures for reducing poverty in smallholder agriculture in Ethiopia.     

农业水价改革与节水效果的关系分

运用经济学理论分析了水价与水资源需求的关系；以实例表明提高农业水价对农业节水的影响；以黄河流域为例，计算农业需水价格弹性，结果表明，当黄河流域农业灌溉水价提高10%，农业亩均用水量将下降5.71～7.41%，将现行水价调整到成本水价，在灌溉面积不变的条件下，可减少用水63.05亿m3，下降22.8%。     

Establishing tradable water rights: implementation of the Mexican water law

Mexico passed a new water law in 1992 that shifted from state-managed water policy to a regulated market-oriented policy with tradable water rights. Water trading will initially be closely supervised by government agencies, but the law includes a number of provisions that will allow liberalization of water markets as water users become more involved in operation and management of water and gain experience in water trading. Incentives for the Mexican water policy reforms include the growing economic value of increasingly scarce water; the rising budgetary costs from highly subsidized capital development and operations and maintenance for irrigation and water supply systems; and general liberalization of the Mexican economy, which has raised the cost of maintaining relatively inflexible water allocation systems that cannot respond to changing incentives.     

An analysis of the effect of quality on prices of horticultural produce

This paper reports an analysis of price data for apples, tomatoes and bananas from three metropolitan markets in Australia. Weekly quantities, average prices and price differences for apples and tomatoes on the Brisbane market show large differences in prices at any particular time, irrespective of supplies and average price. Price data from the Sydney and Melbourne markets for Delicious apples and bananas, respectively are also examined for price level and variation for specific product lines.The attributes of quality in horticultural produce are described and classified as either sensory or objective. It is postulated that the reputation of a product line, and hence its average price, is influenced primarily by the composite of all attributes, particularly those sensory ones which are taste- and time-dependent. The price variation or bandwidth is controlled by a limited number of factors—appearance and colour, and, on the wholesale level, package weight. Objective quality attributes are of concern in the control of post-harvest deterioration and in nutritional matters.A framework for the analysis and price-quality relationships is proposed, based on the effects of supply and demand, reputation and price bandwidth of particular lines. This framework forms the basis for the prediction of prices of horticultural produce.     

广东省农业水价综合改革实践与探索

实施农业水价综合改革是农业节水工作的关键环节,关乎国家水安全和农业可持续发展。从广东省农业水价综合改革工作现状出发,阐述了全省改革实施区供水计量设施和信息化建设、农业水权分配制度、水权交易体系、水价形成机制、工程运行管护机制、精准补贴和节水奖励机制等主要改革内容和实践情况,总结了创新经验和做法,分析了改革过程中存在的困难,并提出了建议。相关经验可为省内其他城市和南方地区周边省市开展农业水价综合改革提供参考。     

An integrated water trading-allocation model, applied to a water market in Australia

Temporary water trading is an established and growing phenomenon in the Australian irrigation sector. However, decision support and planning tools that incorporate economic and biophysical factors associated with temporary water trading are lacking. In this paper the integration of an economic trading model with a hydrologic water allocation model is discussed. The integrated model is used to estimate the impacts of temporary water trading and physical water transfers. The model can incorporate economic and biophysical drivers of water trading. The economic model incorporates the key trade drivers of commodity prices, seasonal water allocations and irrigation deliveries. The hydrologic model is based on the Resource Allocation Model (REALM) framework, which facilitates hydrologic network simulation modelling. It incorporates water delivery system properties and operating rules for the main irrigation and urban centres in a study area.The proposed integration method has been applied to a case study area in northern Victoria, Australia. Simulations were conducted for wet and dry spells, a range of commodity prices and different irrigation distribution system configurations. Some example analyses of scenarios incorporating water trading were undertaken. From these analyses potential bottlenecks to trade that constrain the economic benefits from temporary water trading were identified. Furthermore, it was found that in certain areas of the system, trading can make impacts of long drought spells worse for water users, e.g. irrigators. Thus, the integrated model can be used to quantify short-term and long-term third party impacts arising from temporary water trading. These findings also highlight the need to link “paper trades” (estimated by economic models) to physical water transfers (estimated by biophysical models).     

农业需水价格弹性分析模型

应用计量经济学和多元统计分析的方法,通过对原始资料样本数据建立预处理模型,剔除水价以外的主要影响因素对农业用水量的影响,建立农业需水价格弹性分析模型,得出农业需水的价格弹性,研究表明农业水价与需水量之间存在明显的相关关系.将预处理模型和农业需水价格弹性分析模型在江苏省高扬程灌区中进行了定量的应用研究,结果显示农业水价对用水量有明显的抑制效果.     

Estimating the demand for irrigation water in a humid climate: A case study from the southeastern United States

The southeastern United States typically receives more than 130 cm of precipitation per year. In this region, as in others around the world, irrigation is used as a supplement to rainfall. Over the past thirty years the number of hectares under irrigation in the region has grown considerably, as has population. Policy makers are currently searching for effective tools to address water demand. This study tests the effect of water costs, crop prices and technology on the multiple crop production decision using supplemental irrigation. Results for Georgia row crop producers indicate water demand is modestly affected by water price (with elasticities between −0.01 and −0.17), but more so by crop price (with elasticities between 0.5 and 0.82). Results also suggest adoption of lower pressure irrigation systems does not necessarily lead to lower water application rates on corn, cotton, peanuts, and soybeans.     

Impact of different water price levels on irrigated agriculture in Northern Jordan Valley

A linear programming model was developed to assess the impact of different water prices on cultivated areas, irrigation water demand, net income and optimal cropping pattern in the Northern Jordan Valley (NJV). The results reveal that the price for irrigation water does not reflect any elasticity in the range of water prices between 0.01 and 0.06 JD/M³ indicating constant real economic water price of 0.06 JD/M³. The change in cultivated areas as well as water demand (reduction) starts at water price 0.07 JD/M³. The expected reductions under optimal cropping patterns are 5%, 24%, and 60% for cultivated area and 4.7%, 18.9%, and 31% for water demand with water prices at 0.07, 0.1, and 0.16 JD/M³, respectively. Significant reductions in net incomes are resulted with increasing water prices over current average water price of 0.025 JD/M³. The expected reductions in net incomes are 33.6%, 53.8%, and 81.4% at water prices 0.07, 0.1, and 0.16 JD/M³, respectively. This result reflects the low land profitability as a result of low land productivity and/or low farm gate sale prices for most crops grown in NJV. The study also shows the inconsistency in quantity of water supplied and water demanded, leading to unbalanced water budget on monthly level and inconsequence, a noticeable waste in the quantity of available water during winter months, although there is a net surplus of water over the year. While the findings of this research reveal that a water price in the range of 0.07?C0.1 JD/M³ does not significantly influence the farmers' socio-economic parameters in the NJV, it may help reach the stated goal of saving water especially when monthly distributions of irrigation water are based on real crops water demands and actual cropping patterns.     

水价的经济学分析

水价是水资源管理手段中的重要工具,而其核心问题又在于制定合理而有效的水价。本文从经济角度出发,分析了不同的需求状况和供给状况时水价的形成机制,以及不同水价制定方式的影响。结果表明,不同水价制定方式在成本补偿,社会效益以及效益分配上的结果不同。当用水者对水资源的需求很低,或水资源供需存在不均衡时,社会整体效益整体效益就可能存在矛盾。而不管水资源的供给和用水者的需求如何,在不考虑政府调节和执行成本的情况下,最终的水价等于用水者从水资源利用中获得的边际效益。     

基于资源环境水价的塔里木河流域作物农业水价的节水效应分析

立足当前塔河流域的成本水价,基于已有研究的流域水资源费和环境水价模型与相关资料,首先构建了流域基于资源环境水价的未来农业水价;然后,利用已有研究资料和流域不同作物的水分生产函数,进一步构建了流域未来作物农业水价的需求效应模型;分析了未来塔河流域基于资源环境水价的未来作物农业水价的节水效应。结果表明:基于资源环境水价的未来农业水价调整可大幅提高节水效应,只是环境水价更侧重于实现流域生态用水保障的经济补偿。再者,不同流域和作物水价需求弹性效应差别很大,可以实行有差别的农业水价调整政策。还有,流域水价弹性系数会由缺乏弹性变为富有弹性,受作物基本灌溉定额限制,就是采用高效节水技术也难以保证水价节水效应的实现,这成为流域农业水价调整可行性的一个标志。但是,这也使未来流域农业水价的需求效应分析事关流域粮食安全和用水户的水价承受力问题,成为未来塔河流域农业水价调整研究的重要相关研究内容。     

农村饮水安全工程阶梯水价优化设计

合理的水价是保障供水工程健康发展,实现可持续的农村饮水安全的必要条件.提出由生存水量和生活水量构成的2级阶梯水价是适合农村现状的水价模式;分析了农村供水工程的成本回收、用水户的用水需求、生存水量的核定,以及水价承受能力问题,在此基础上建立了阶梯水价优化模型;以山东临清某农村水厂为例进行了实例测算,结果表明该方案有积极的实施价值.     

Reducing peak supplemental irrigation demand by extending sowing dates

Supplemental irrigation (SI) is a common practice in the dry environments and aims at improving and stabilizing rainfed crops by adding small amounts of water to rainfed crops during times when rainfall fails to provide sufficient moisture for normal plant growth. Results from long-term research in experimental stations and farmer fields showed substantial increases in rainfed crop yields and water use efficiency in response to SI. Nevertheless, SI comes at a cost.The date of sowing winter wheat in a rainfed Mediterranean-type environment depends upon the onset of rainfall. The optimal date for achieving highest yield under rainfed conditions is around mid-November. However, farmers tend to sow wheat later than this date because of the delay and/or unreliability of initial rains. With SI, early sowing and crop establishment can be ensured. However, early sowing of all the fields’ results in higher water demand during a very short period in spring because all the fields will be at the peak use rate. Spreading out dates of sowing allows peak water demand to occur over a longer period, thus reducing the discharge and the size of irrigation system needed, and hence improves the economics of this practice. In this paper, the impact of adopting a multi-sowing date strategy on farm water demand and crop production is considered. A simplified optimization model solved by linear programming is presented. Four-years’ data (1992–1996) from field experimental research conducted on bread wheat in northern Syria have been used in the analysis.We showed that a multi-sowing date strategy has reduced the peak farm water demand rate by more than 20%, thus potentially reducing irrigation system capacity and/or size. Alternatively, the water demand rate of a larger area can be met with the same water supply. However, optimal sowing dates that minimize farm water demand rate do not always maximize total farm production. The outcome depends on crop water requirements and yield for each sowing date. Furthermore, this selection is greatly influenced by the level of water scarcity. The approach used can help in reducing the cost of irrigation and improving the efficiency of water use in SI.     

农民安全饮水水价承受能力的定量分析研究

为科学全面地评价农民对于农村安全饮水水价的承受能力,首次综合考虑经济和心理二方面对农民饮水水价承受能力进行定量分析。采用扩展线性支出系统ELES需求模型,推求了不同地区农民的基本生活消费需求,对经济承受能力进行了合理划分;应用条件价值评估法CVM,研究不同地区农民对于安全饮水水价的心理承受能力,采用支付卡技术优化封闭式...     

Estimating the impacts of water pricing on smallholder irrigators in North West Province, South Africa

Worldwide growing water scarcity has increased the call for economic instruments to stimulate rational water use in agriculture. Furthermore, cost-recovery is now widely accepted as a cornerstone of sustainable water management. In many developing countries, where agricultural water use is often still subsidised, water pricing policies are developed for allocating water efficiently and achieving sustainability of water systems. However, the impacts of water pricing policies on irrigation water use and on farm production systems is mostly unknown. We introduce an innovative two-stage methodology that allows estimating these effects at farm level. Applying the method to small-scale irrigators in South Africa, we show that water demand is quite responsive even to small changes in water price. In addition, the introduction of a water price significantly decreases farm profit. This appears to be a problem primarily for the poorer farmers.