EconPapers    
Economics at your fingertips  
 

Economic Effects of Water Recovery on Irrigated Agriculture in the Murray‐Darling Basin

R. Quentin Grafton and Qiang Jiang

Centre for Water Economics, Environment and Policy Papers from Centre for Water Economics, Environment and Policy, Crawford School of Public Policy, The Australian National University

Abstract: A key issue facing water planners and policy makers is the cost of reallocating water from extractive uses, such as irrigated agriculture, to environmental flows. To quantify these costs, a framework to analyze the economic trade-offs from water use reductions in irrigated agriculture is developed that has general applications, but is calibrated to Australia’s Murray-Darling Basin. The framework includes an 18-region integrated irrigated agriculture water model of the Murray-Darling Basin that quantifies the impact on irrigated agriculture net profits associated with reductions in surface water extractions. The model shows that substantial reductions in water extractions of up to 40% across the entire Basin impose only a moderate reduction on net profits in irrigated agriculture, Basin-wide. However, the results also indicate that in regions where less profitable irrigation activities dominate, irrigated water use would fall dramatically although net profits would decline by proportionately by much less. The findings suggest that reductions in water diversions in irrigated agriculture at least cost so as to increase environmental flows would: (1) Concentrate the reductions in water extractions by irrigated agriculture in relatively few parts of the Murray-Darling Basin and, principally, on only three less profitable crops; (2) Reduce net profits, both regionally and Basin-wide, but these declines would be proportionally much less than the percentage reductions in water use; and (3) Ensure the present value of foregone net profits in irrigated agriculture is less than the amount currently budgeted by the Australian government to reduce surface water extractions in the Murray-Darling Basin.

Pages: 47
Date: 2010-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://cweep.anu.edu.au/pdf/publications/research_ ... onomics_of_water.pdf (application/pdf)

Related works:
Journal Article: Economic effects of water recovery on irrigated agriculture in the Murray-Darling Basin (2011) Downloads
Journal Article: Economic effects of water recovery on irrigated agriculture in the Murray‐Darling Basin (2011) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:een:cweanu:1011

Access Statistics for this paper

More papers in Centre for Water Economics, Environment and Policy Papers from Centre for Water Economics, Environment and Policy, Crawford School of Public Policy, The Australian National University Contact information at EDIRC.
Bibliographic data for series maintained by CAP Web Team ().

 
Page updated 2025-03-30
Handle: RePEc:een:cweanu:1011