Farmers’ Participation in Informal Groundwater Market in Hard Rock Areas of Peninsular India

Abstract

This paper has analysed the factors that influence farmers' participation in the informal groundwater market using the Cragg's double hurdle model. For the study, primary data from 171 groundwater farmers belonging to the Eastern Dry Zone of Karnataka were used. The empirical results have shown that agricultural credit and farmers having failed wells positively influence farmers' probability of water buying. With increasing water cost, the farmers are more likely to purchase or sell water and the quantity of water purchased or sold decreases with the increase in irrigation cost. The well-owners who have drip irrigation and land fragments are more likely to sell water. It has been observed that in the study area farmers purchase water at high prices and hence an effective agricultural water pricing is needed. Another option could be to promote joint investment in irrigation which takes care of credit problems and negative externalities of overdraft, resulting in efficient use of resources.

Towards Sustainable Water Use: Factors Influencing Farmers’ Participation in the Informal Groundwater Markets in Pakistan

“…When a farmer uses irrigation to a higher proportion of his or her own land, he or she needs more water for the farm and therefore sells less water on the market. This result is consistent with Manjunatha et al (2014), which found a positive effect of water sales revenues on the level of water sold in India.…”

“…These non-functioning wells represent sunk costs in agriculture and have contributed to an increase in water costs. As a result, water buyers prefer to buy water rather than invest in additional tubewells, because such investments on the same land are risky and huge (Manjunatha et al, 2014). reported similar findings in the water markets of the Eastern Dry Zone of Karnataka, India.…”

“…These results suggest that a land reform policy focusing on land consolidation is likely to increase the efficiency of water use. Previously, Singh and Singh, (2006) and Manjunatha et al (2014) have identified the positive effect of land fragmentation on water-selling farmers in India.…”

“…Previous research on farmers' participation in groundwater markets has been conducted in a number of Asian countries, including Rajasthan, India (Sharma and Sharma, 2006) in which authors investigated the factors influencing farmers' decision to purchase water. In another study (Manjunatha et al, 2014), looked at farmers' participation in the water-stressed Eastern Dry zone of Karnataka and discovered that agricultural credit and failed wells increase the likelihood of buying water. It is because of misuse of agricultural credit (Elahi et al, 2018).…”

Exploring Competitiveness of Surface Water Versus Ground Water Irrigation and Their Impacts on Rice Productivity and Efficiency: An Empirical Analysis from Bangladesh

“…The positive sign associated with the variable wage work argues that farmers participating in wage-earning activities are less likely to choose surface water as a source of irrigation over groundwater. This contradicts with Manjunatha et al (2014), who observed farmers with significant income from non-crop activities, such as dairy, have less interest in farming and ultimately practice less intensive farming using surface water as the cost is relatively lower. Wage-earning activities are stressful, laborious, and uncertain, and less gainful.…”