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2015•China Economic QuarterlyRequires access

The Impact of Water Pricing Policy on Water Use in Irrigation and Crop Income

Liu Guo Ying

Open publisher page 9 citations

Abstract

Water pricing is one of the essential policies to improve efficiency of water used in irrigation,but there are also concerns on its impact on farmers' income.This paper analyzes the impacts of water pricing policy,based on a novel multi-objective decision system.The results show that as water price increases,the absolute values of water demand elasticity increase from zero to a certain high level and then fallthereafter.The income from crop production would fall with water price.A decoupled compensation mechanism is highly needed to reach a win-win situation for both water conservation and farmers' welfare.

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What this paper is about

Water pricing is one of the essential policies to improve efficiency of water used in irrigation,but there are also concerns on its impact on farmers' income.This paper analyzes the impacts of water pricing policy,based on a novel multi-objective decision system.The results show that as water price increases,the absolute values of water demand elasticity increase from zero to a certain high level and then fallthereafter.The income from crop production would fall with water price.A decoupled compensation mechanism is highly needed to reach a win-win situation for both water conservation and farmers' welfare.

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Available abstract

Water pricing is one of the essential policies to improve efficiency of water used in irrigation,but there are also concerns on its impact on farmers' income.This paper analyzes the impacts of water pricing policy,based on a novel multi-objective decision system.The results show that as water price increases,the absolute values of water demand elasticity increase from zero to a certain high level and then fallthereafter.The income from crop production would fall with water price.A decoupled compensation mechanism is highly needed to reach a win-win situation for both water conservation and farmers' welfare.

Key concepts: Water pricing, Water conservation, Economics, Welfare, Price elasticity of demand, Irrigation, Natural resource economics, Agriculture

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