Determining the disaggregated economic value of irrigation water in the Musi sub-basin in India

Abstract

In this paper the residual method is used to determine the disaggregated economic value of irrigation water used in agriculture across crops, zones and seasons. This method relies on the belief that the value of a good (its price by its quantity) is equal to the summation of the quantity of each input multiplied by its average value. By applying this method to the Musi sub-basin; a subdivision of the Krishna basin in India, it was found that the value of irrigation water use is not equated across the crops, zones and seasons. The reasons why there is no sinlge value of irrigation water use are suggested. As farmers do not have perfect knowledge, do not all possess the same resource base, plant different crops for a variety of reasons (some for a financial return on land instead of water and others for sustenance), possess different crop rotation practices and are possibly riks adverse, they all value water differently. However, the results need to be interpreted with care as the crop with the lowest return to water is probably not the one to be sacrificed if water is restricted, since farmers plant crops for a variety of reasons (and sometimes not for the highest return to water that they can achieve).