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A.C. Hemalatha, Mysore G. Chandrakanth and N. Nagaraj

No 43619, Conference Papers from University of Agricultural Sciences, Bangalore, Department of Agricultural Economics

Abstract: Rapid urbanization, the major cause for sand demand is responsible for unsustainable extraction of sand from dried river paths. The layers of sand deposits are exploited almost up to the bottom. This in turn, has increased initial and premature failure of irrigation wells in riparian areas. This study is a modest attempt to estimate the negative externalities due to sand mining along Uttara Pinakini river in Gauribidanur, Karnataka, India using field data from Sand mining area (SMA) and Non-sand mining area (NSMA). In SMA (NSMA) proportion of well failure is 0.46 (0.3), groundwater extracted per well 20.67 (32.12) acre inches, negative externality per well Rs. 4189 (Rs. 1328), net return per rupee of groundwater Rs.4.32 (Rs.11.88). In SMA (NSMA), as location of well from sand mining area increased from 30 to 1500 feet negative externality per well reduced from Rs.7080 to Rs.1585 (Rs.1394 to 1462). In Bangalore city, price of sand was Rs. 4200 per truckload of 350 cubic feet; with inelastic demand (η = - 0.88) and transporters earn net return of Rs. 835 per load. It is suggested to impose a Pigouvian tax of Rs. 540 on each sand truck load in order to compensate the farmers for loss incurred due to sand mining at the rate of Rs. 4813 per irrigation well.

Keywords: Agricultural and Food Policy; Environmental Economics and Policy; Institutional and Behavioral Economics; Production Economics; Research and Development/Tech Change/Emerging Technologies (search for similar items in EconPapers)
Pages: 15
Date: 2005-02-18
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DOI: 10.22004/ag.econ.43619

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