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Economic Analysis

Simulated Crop Yields Response to Irrigation Water and Economic Analysis

Increasing Irrigated Water Use Efficiency in the Indian Punjab

^a Dep. of Soils, Punjab Agric. Univ., Lab-125, Ludhiana, Punjab 141 004, India
^b Punjab Remote Sensing Centre, Ludhiana, India
^c Dep. of Agricultural Economics, Oklahoma State Univ., Stillwater, OK 74078
^d Spatial Sciences Lab., Texas A&M Univ., College Station, TX

^* Corresponding author (jeffrey.vitale{at}okstate.edu)

Received for publication February 18, 2006. The Indian Punjab has been heralded for its technical achievements but increasingly criticized for leveraging its success on the environment. Irrigation has been one of the main pillars of the Punjab's Green Revolution. The availability of water has pushed rice and wheat productivity to new heights. Cheap water policies have enabled farmers to exploit groundwater. Water tables are shrinking in some areas, while water logging poses a major problem in other parts of the Indian Punjab. This article investigates the potential for reducing irrigation water use through policies that align irrigation water prices with their true social cost. This includes charging Punjabi farmers for irrigation water and introducing alternative, more water efficient crops. Results indicate that alternative crops, cotton (Gossypium hirsutum L.) and soybean [Glycine max (L.) Merr.], would enter cropping patterns provided that irrigation water prices moved to about 25% of the price charged by municipal water authorities. Shifting cropping patterns toward more water-efficient enterprises would decrease irrigation water use on a typical paddy by nearly 66%. Future policy considerations are required to offset the declines in producer welfare that would accompany the irrigation water pricing.

Abbreviations: MSP, minimum support price • OLS, ordinary least square • PA, precision agriculture • PAU, Punjab Agricultural University • QP, quadratic programming