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Irrigated agriculture in Italy and water regulation under the European Union water framework directive
Author(s) -
Bazzani G. M.,
Di Pasquale S.,
Gallerani V.,
Viaggi D.
Publication year - 2004
Publication title -
water resources research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.863
H-Index - 217
eISSN - 1944-7973
pISSN - 0043-1397
DOI - 10.1029/2003wr002201
Subject(s) - water framework directive , water pricing , agriculture , incentive , european union , environmental economics , transaction cost , order (exchange) , directive , irrigation district , water use , business , water resources , economics , natural resource economics , water conservation , irrigation , computer science , water quality , microeconomics , ecology , programming language , finance , biology , economic policy
The legal framework in the EU is faced today with the new water framework directive (WFD) (60/2000) that sets up new criteria for water management, regulation, and pricing. The aim of this paper is to analyze the problem of water regulation in agriculture in connection to the WFD. This is done by setting up and testing a simulation model based on the integration of a mathematical programming model at farm level and an optimal regulation model at the level of irrigation boards. The model allows quantifying water demand and optimal regulation from the policy maker's point of view. When implementing both full cost recovery and the polluter pays principle, the results show likely major impacts of water pricing on farm income and employment. The optimal policy is a combination of pricing instruments related at the same time to crop mix, water consumption, and pollution. Transaction costs connected to policy implementation have to be weighted against the incentive benefits of volumetric pricing. Altogether, economic, social, and environmental issues have to be carefully considered in order to design suitable water policies.