21-09-2016, 12:14 PM
1455549032-Session8.EconomicsofGroundwaterDepletionNeedforDemandManagementDr.VRatnaReddy.pps (Size: 147.5 KB / Downloads: 9)
Water Related Issues & Concerns
Declining Surface water sources like canal and tank irrigation
Increased groundwater exploitation
Increased Depletion of groundwater
Replenishment becomes problem if non-renewable groundwater is used.
Resource preservation would not be in the best interest of the region
Economics of Groundwater
Groundwater is a public good
Groundwater use and depletion has externalities
Costs of depletion related externalities could be high and disproportionately distributed
Rationale for mitigating (replenishment) measures in terms of private / social costs and benefits.
Internalising the externalities could result in net social welfare
Types of Externalities
Negative Externalities: Stock (over exploitation), technological (higher pumping costs) and strategic (over extraction by few).
Positive externalities of resource investments (percolation tanks/replenishment mechanisms):
- Recharge: normal Percolation Tank: 7.87 mm/day
De-silted Percolation Tank: 20.40 mm/day
- Impact radius: miliolite limestone: 1100 mt.
gaj limestone: 780 mt.
weathered basalt: 720 mt.
Externality context
rt # pt --- Short run due to technological or strategic externalities as (Drt-1) > (Dpt-1). Resource rich farmers tend to appropriate more resources using their resource position
rt pt --- long run due to stock externalities. Over exploitation resulting in use of non-renewable resource and tragedy of commons in the absence of cooperative strategy.
Externalities of GW Depletion: Open wells
Drying up of open wells range from 45% in good to 85% in scarcity conditions (decline in no. of open wells)
Drying up of open wells is more prominent among marginal & small farmers, especially in the moderate and scarcity conditions.
S&M farmers are the first victims of externalities due to location disadvantages and poor quality soils.
Externalities: Area irrigated
Decline in NIA & GIA in all situations, but the decline progresses as we move from good to scarce resource condition.
Decline is more in the case rabi (where dependence on GW is more).
Decline in kharif is noticed in moderate and scarcity conditions.
Decline is more among marginal farmers, especially in moderate and scarcity conditions.
Externalities: Yields
Decline in yield rates of paddy (khaif & rabi) in all the situations.
Declines as high as 17 percent.
Decline is more for S&M farmers.
ID crops also have recorded a decline.
Nature of Costs
Direct Costs:
-Loss due to drying of open wells (sunk)
-Investment in borewells / well deepening (replacement)
Indirect Costs:
-Loss due to decline in productivity
-crop shifts (high remunerative to low remunerative)
Costs of Depletion
Total Costs of degradation range from Rs. 3349 (US$85) per acre (good availability) to Rs. 15069 (US$425) (scarcity conditions).
These costs compare favourably with the costs of renovating the tanks.
Both direct (sunk) and indirect (cropping pattern changes) costs are disproportionately borne by small and marginal farmers.