Abstract
It is difficult for small municipalities to ensure their urban water cycle complies with the principle of cost recovery established in the European Union (EU) Water Framework Directive. Unlike more populous municipalities, small municipalities face higher average production costs. However, at least in Spain, the price of water is, on average, lower in small municipalities. We question whether the low price of water in rural areas is due, at least in part, to people linked to agriculture, i.e., do farmers constitute a special interest group that hinders increases in the price of water? The main hypothesis was tested with data taken from Torre-Cardela, a municipality in southern Spain with close to 800 inhabitants. In the research a contingent valuation analysis was carried out to analyze respondents’ willingness to pay in the event of a hypothetical increase in the price of water to help cover the service costs. Contrary to expectations, the study yields no evidence that the agricultural population is more resistant to price rises than the rest of the citizens surveyed. In fact, results show that people involved in the agricultural sector would be willing to accept a hypothetical increase in water tariffs in between 15% and 25% over the current tariff, while for the rest of the population this same increase would be lower (in between 9% and 20%).
Highlights
There is a growing concern about resource management, in the face of the threats of climate change and increased water demand for different uses [1,2]
We question whether the population linked to agricultural activity forms a pressure group that helps keep water prices low in rural areas. If this is the case, for the sake of economic efficiency and cost recovery public authorities should implement educational and awareness-raising training campaigns targeted at this group, in order to reduce their resistance to possible increases in the price of water for residential uses
The existence of such a relationship would be an indication that this group constitutes a lobby that hinders the setting of water prices at levels that contribute to cost recovery
Summary
There is a growing concern about resource management, in the face of the threats of climate change and increased water demand for different uses [1,2]. We question whether the population linked to agricultural activity forms a pressure group that helps keep water prices low in rural areas If this is the case, for the sake of economic efficiency and cost recovery public authorities should implement educational and awareness-raising training campaigns targeted at this group, in order to reduce their resistance to possible increases in the price of water for residential uses. The declared preferences will allow us to determine whether people linked to agriculture are more reluctant to pay to finance the public water service The existence of such a relationship would be an indication that this group constitutes a lobby that hinders the setting of water prices at levels that contribute to cost recovery. If the hypothesis is rejected, it would suggest that there is a need for a more in-depth examination of the relationship between political opportunism and low water prices, as well as the possibility of incorporating measures that reduce local politicians’ power to set the prices of water for residential uses in rural areas
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