Impact of groundwater markets in India on water use efficiency: A data envelopment analysis approach

• Published in: Journal of environmental management Vol. 92; no. 11; pp. 2924 - 2929
• Main Authors: Manjunatha, A.V., Speelman, S., Chandrakanth, M.G., Van Huylenbroeck, G.
• Format: Journal Article
• Language: English
• Published: Kidlington Elsevier Ltd 01.11.2011; Elsevier; Academic Press Ltd
• Subjects: Agricultural Irrigation; Agricultural production; Animal, plant and microbial ecology; Applied ecology; Biological and medical sciences; Commerce; Conservation, protection and management of environment and wildlife; Data envelopment analysis; Economic efficiency; Efficiency; Environmental management; Fundamental and applied biological sciences. Psychology; General aspects; Governments; Groundwater; Groundwater markets; India; Indian; Irrigation; Market analysis; Markets; Models, Statistical; Operations research; Productivity; Samples; Socioeconomic Factors; Water resources; Water supply; Water Supply - economics; Water use; Water use efficiency; Water utilization; Asia; India; Water use efficiency; Groundwater markets; Data envelopment analysis; India; Data analysis; Environmental management; Ground water
• ISSN: 0301-4797; 1095-8630
• DOI: 10.1016/j.jenvman.2011.07.001

In the hard rock areas of India, overdraft of groundwater has led to negative externalities. It increased costs of groundwater irrigation and caused welfare losses. At the same time informal groundwater markets are slowly emerging and are believed to improve water distribution and to increase water use efficiency in the irrigation sector. These claims are evaluated in this study. For this purpose data was collected from a sample containing three different groups of water users: water sellers, water buyers and a control group of non-traders. First the socio-economic characteristics of these groups are compared. Then the efficiency of water use of the three groups is studied using Data Envelopment Analysis. The results indicate that groundwater markets provide resource poor farmers access to irrigation water, giving them the opportunity to raise their productivity. Water buyers are furthermore shown to be most efficient in their water use, while water sellers are also shown to be more efficient than the control group. The differences in efficiency between the groups are statistically significant. The demonstrated potential of groundwater markets to improve the efficiency of water use and to increase equity in resource access should be taken into account by the Indian government when deciding on their attitude towards the emerging groundwater markets. ► Groundwater markets in India provide resource poor farmers access to irrigation water. ► Farmers participating in the water market use irrigation water more efficiently than those not engaging in trade. ► Complementary measures are needed to avoid further degradation of the water tables in the study area.