Marginal Value of Irrigation Water Use in the South Saskatchewan River Basin, Canada

The allocation of water is part of water management. In order to achieve maximum benefits to society, water should be allocated toward uses that have the highest value, followed, as an alternative, by the next highest level or one with equal value. Such decisions require knowledge of water value at the last unit of use. Within agriculture, irrigation is important. Irrigation water must be allocated to various crops; therefore, producers require knowledge of the marginal value of water among alternative crops. This study estimates marginal value product for irrigation water within the southern areas of the Canadian Prairie Provinces using a crop-response model. Marginal values were estimated under the present and a future climate scenario. Cash crops such as potatoes and dry beans had higher marginal values of water, around $1,000 per 1,000 m3. Cereals and oilseed crops lagged behind (close to $200 per 1,000 m3). Results show modest increases in marginal value under climate change, compared to the volatility resulting from commodity market price changes seen today.