Groundwater markets under the water scarcity and declining watertable conditions: The upland Balochistan Region of Pakistan

Syed M. Khair, Shahbaz Mushtaq, Richard Culas and Mohsin Hafeez

Agricultural Systems, 2012, vol. 107, issue C, 21-32

Abstract: The study documents comprehensive analysis on informal groundwater marketing in upland Balochistan, Pakistan. Informal groundwater markets are emerging as a feasible option to manage increasing water scarcity and declining water tables resulting from poor groundwater policies. Firstly, we evaluated the groundwater trading mechanism; we then examined factors affecting the groundwater trading using empirical data and logit econometric models. We did not observe any permanent groundwater transactions; only temporary groundwater exchange takes place. Two common transactions methods were noted – water in exchange for a given crop share and cash payment at a flat rate per hour. In all, 60% of respondents reported selling water in exchange for a crop share. This form of transaction intensifies as we move from high altitude areas to low altitude areas where water and land are relatively abundant. In general, crop sharing rates were 33% of crop output. Water trading in the form of cash transactions was practiced by 40% of respondents. The charge per hour also varied with altitude, with average prices of Rs. 100,1USD=Pakistan Rupees (Rs) 85 as of June 2011.1 Rs. 112, and Rs. 205 per hour reported at low, medium and high altitudes, respectively. The increase in this form of water marketing as we move from low to high altitude areas is mainly in response to relatively scarce water and land in high altitude areas.

Keywords: Informal groundwater markets; Balochistan; Logit model; Groundwater decline; Sustainable cropping system (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:agisys:v:107:y:2012:i:c:p:21-32

DOI: 10.1016/j.agsy.2011.11.007

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