Open AccessIMPACTS OF WATER SUPPLY UNCERTAINTY AND STORAGE ON EFFICIENT IRRIGATION TECHNOLOGY ADOPTION
Author(s) -
BHADURI ANIK,
MANNA UTPAL
Publication year - 2014
Publication title -
natural resource modeling
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.28
H-Index - 32
eISSN - 1939-7445
pISSN - 0890-8575
DOI - 10.1111/nrm.12016
Subject(s) - irrigation , variance (accounting) , water storage , water supply , complementarity (molecular biology) , environmental economics , water pricing , investment (military) , business , water conservation , water resource management , agricultural engineering , environmental science , economics , environmental engineering , mechanical engineering , engineering , inlet , biology , ecology , genetics , accounting , politics , political science , law
In the framework of a stochastic dynamic programming model, the paper investigates the impact of water supply uncertainty and storage at farm level on adoption of efficient irrigation technologies under a flexible water price regime. We find that even a flexible water pricing cannot guarantee higher adoption of efficient irrigation technology in all cases. Results of the paper indicate that if a farmer invests in water storage capacity, then the value of efficient usage of water increases, and the rate of adoption of efficient irrigation technology will be higher. It establishes a complementarity relationship between investments in storage capacity and adoption of efficient irrigation technology. The relationship becomes stronger with increasing variance in water supply. In a situation without any option to store water at the farm level, we find a negative relationship between investment in efficient irrigation technology and water variability. However, numerical analysis results suggest that a risk averse farmer may invest more in efficient irrigation only if the variance in water supply is very high.