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ARS Home » Plains Area » Bushland, Texas » Conservation and Production Research Laboratory » Soil and Water Management Research » Research » Publications at this Location » Publication #331356
Title: Will farmers save water? A theoretical analysis of groundwater conservation policies

Author
item WANG, TONG - South Dakota State University
item PARK, SEONG - Texas Agrilife Research
item JIN, HAILONG - Black Hills State University

Submitted to: Water Resources and Economics
Publication Type: Peer Reviewed Journal
Publication Acceptance Date: 1/6/2015
Publication Date: 10/20/2015
Citation: Wang, T., Park, S.C., Jin, H. 2015. Will farmers save water? A theoretical analysis of groundwater conservation policies. Water Resources and Economics. 12:27-39.

Interpretive Summary: Farmers and water policy makers need information on the consequence of water conservation practices to determine if such practices will achieve groundwater conservation in a cost effective manner. Scientists from Texas A&M AgriLife Research, South Dakota State University and Black Hills State University analyzed the effects of four conservation policies: 1) subsidy for efficient irrigation systems; 2) increase cost of water; 3) subsidy for water savings; and 4) subsidy for water efficient crops. In areas where groundwater is limiting, subsidies for water savings and/or for water efficient crops achieved water conservation. These results are of interest to water policy makers like these in the High Plain Water District in Texas.

Technical Abstract: The development of agricultural irrigation systems has generated significant increases in food production and farm income. However, unplanned and unconstrained groundwater use could also cause serious consequences. To extend the economic life of groundwater, water conservation issues have become the main focus for the policy makers. Taking Ogallala aquifer in U.S. Southern Great Plains as an example, this paper analyzes whether current and potential groundwater conservation policies provide profit-driven farmers with incentives to save water. We adopt a theoretical approach to analyze farmer's optimal response when facing following policy alternatives, including (1) irrigation technology subsidy, (2) increased water cost, (3) unit subsidies for water saving, and (4) subsidies on water-conservative crop. Our findings suggest that the effects of water conservation policies vary by region. Specifically, the switching to higher efficiency technology should occur in a preventative stage for the water saving to occur. Similarly, an increase in water cost promotes water saving only when water resource is relatively abundant. In regions where groundwater already poses a constraint, the unit subsidy for actual water saved and price subsidy for water-conservative crops are more effective in achieving the water conservation goal.