Groundwater Pricing in Agriculture in South Asia: Research for Practical Policy-Making

Soumya Balasubramanya

Review of Environmental Economics and Policy, 2025, vol. 19, issue 2, 175 - 194

Abstract: South Asian countries aim to correct water and energy prices in groundwater irrigation, improve its efficiency, and “rationalize” the quantity of groundwater used in irrigation. The challenge is to accomplish these goals without harming poor smallholder farmers who depend on groundwater for their livelihoods. Policy makers face the familiar trade-off between efficiency gains (an improvement in overall welfare) and the distribution of impacts. A limited understanding of these trade-offs in the context of groundwater irrigation has stymied progress on groundwater pricing. This paper identifies knowledge gaps in the water-energy-food-poverty nexus where researchers and policy makers can collaborate to generate evidence for informed decision-making. The questions raised in this paper are relevant for other regions where groundwater-dependent agriculture with subsidized water and energy continues to be an important source of income for the rural poor.

Date: 2025
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