Farmers' Willingness to Pay for Improved Irrigation Water — A Case Study of Malaprabha Irrigation Project in Karnataka, India

Durba Biswas and L. Venkatachalam ()
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L. Venkatachalam: Madras Institute of Development Studies (MIDS), 79, II Main Road, Gandhi Nagar, Adyar, Chennai 600 020, Tamil Nadu, India

Water Economics and Policy (WEP), 2015, vol. 01, issue 01, 1-24

Abstract: In principle, the approach toward irrigation management in India has gradually shifted from a government-dominated, supply-side paradigm toward a user-preferred, demand-side paradigm. Yet, decisions regarding water allocation and irrigation charges do not adequately incorporate farmers' preferences and their willingness-to-pay (WTP) for improved irrigation. Since public investment on irrigation projects is sizeable and the opportunity cost of irrigation water is increasing, there exists a need to estimate the economic value of irrigation water in order to utilize it in an efficient manner. This paper presents results of a contingent valuation (CV) study conducted in a semi-arid region, namely, the Malaprabha Irrigation Project in Karnataka, India, which elicited farmers' preferences and their WTP value for improved irrigation. The results suggest that farmers predict a significant increase in agricultural benefits due to additional irrigation and they are willing to pay significantly higher than what they are currently paying to secure these benefits. It implies that improved irrigation increases not only the farmers' benefits but could potentially increase the government's revenue, resulting in a win–win outcome.

Keywords: Irrigation management; contingent valuation method; willingness-to-pay; water policy; India (search for similar items in EconPapers)
Date: 2015
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DOI: 10.1142/S2382624X14500040

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