Groundwater Marketing in Nalanda District of Bihar State: A Socio-economic Appraisal

Kumar Anish Singh, A.K. Chaudhary and D.K. Sinha

Agricultural Economics Research Review, 2007, vol. 20, issue 2

Abstract: The cost and marketing of groundwater have been assessed in the Nalanda district, which is one of the most agriculturally advanced districts of the Bihar state. For the study, 60 farmers have been randomly selected from the district. It has been found that small and marginal farms use their tubewells mainly for hiring, whereas, large and medium farms use them mainly for their own purposes during the main crop seasons, i.e. kharif and rabi. The average installation cost on a tubewell has been found highest on large size of holdings (Rs 33,130), followed by medium (Rs 27,240), small (Rs 23,850), and marginal (Rs 19,610) holdings. The capital budgeting techniques, viz. net present value (NPV), benefit-cost ratio (B:C ratio) and internal rate of return (IRR) have been used for evaluating the investment on tubewells. The NPV has been found positive (Rs 1440) and B:C ratio more than one (1.05:1). The IRR has been estimated to be more than the capital cost (10.95%). But, the tubewells have failed to generate income flow equal to the investment by marginal farms. Farm size-wise analysis has revealed that the owner-seller farms category predominates in the water market in the study area. The participation in water market has been found to decline with increase in the size of farms. Financial analysis has revealed that the installation of tubewells is financially viable on large and medium farms but not on small and marginal farms. However, with the development of water market in the area, adoption of modern technologies in crop production and cultivation of cash crops would make the installation of tubewells on marginal and small size of farms financially viable.

Keywords: Resource/Energy; Economics; and; Policy (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:aerrae:47337

DOI: 10.22004/ag.econ.47337

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