The responsiveness of Australian farm performance to changes in irrigation water use and trade

• Main Authors: Bell, Rosalyn, Gali, Jyothi, Gretton, Paul, Redmond, Ineke
• Format: Conference Proceeding
• Language: English
• Published: 2007
• Subjects: Farm Management; farm performance; irrigation; price elasticity; water trade

The flexibility of farms to respond to changing economic or environmental conditions has received attention in recent years, particularly in the context of changes in the availability and pricing of irrigation water. This study uses a new unit record data set of Australian farms and a generalised profit-function framework to assess the links between farm performance and water use practices, involvement in water trading and other farm characteristics. Amongst other findings, the study provides experimental estimates of the responsiveness of the demand for irrigation water to price changes and the impact of farmers either buying or selling water on farm profits, after controlling for other factors.