Impact Of Irrigation Water Pricing On Farmers Decision Behariour

Irrigated agricultural production is the backbone of Chinese agricultural sector. But theincreasing demand for water coupled with constrained supply of water resource has concerneddifferent bodies. Improving the inefficient utilization is expected to unwind the potential watershortage. For this reason irrigation water pricing policy is mostly considered in the first place toattain this goal. However, irrigation water pricing is also claimed to have some other impacts onthe society and the environment. So the major objective of this paper was to analyze the impactof irrigation water pricing on water demand, economic welfare, cropping patterns andenvironmental sustainability. Farm level primary data was collected from irrigation districtsalong the Weihe River basin. In the price stimulation analysis, positive mathematicalprogramming model (PMP) was implemented. Using GAMS/MINOS solver, the model resultindicated that irrigation water demand is inelastic especially at low price increment from the baseyear water price and becomes elastic when the increment is relatively higher. It again experienceinelastic stage when water price level gets very high which impacts farmers’ income and croppattern significantly and irrigation become no more profitable. Fertilizer consumption was alsowater price inelastic. Since most of the water intensive crops stay profitable with water price rise,farmers tend to utilize it even at high rate of price increment. In general, irrigation water pricingpolicy can have positive or negative impact on different bodies, but to which you give thepriority is an important factor. Therefore, it is recommended that policy makers need to takeinformed decision so that the already disadvantaged agricultural sector and agriculturalcommunity should not be at worst.