TY - JOUR
T1 - Estimating the potential gains from water markets
T2 - A case study from Tunisia
AU - Zekri, Slim
AU - Easter, William
N1 - Funding Information:
The first author acknowledges financial support for this research from the Fulbright Foundation.
PY - 2005/4/2
Y1 - 2005/4/2
N2 - Water markets can improve water use efficiency through the transfer of water to users who can obtain the highest marginal return from using it. Existing water markets are implemented among farmers or between farmers and urban water companies or hydropower companies. Several studies have shown that farmers may benefit from trading water mainly in countries where water scarcity is increasing and new water supply projects are either very costly or not possible because of environmental concerns. This paper estimates the potential benefits and losses of implementing water market among farmers and between farmers and urban water company in Tunisia. We used linear programming to examine four separate farm models and an aggregate model. The method is applied to an irrigation area of 4500 ha in Northern Tunisia. Results indicate that water trading among farmers would be quite limited and would have a minor impact on farmers' income. In contrast, the market among farmers and the urban water company offers higher volumes of water trades to urban users and helps increase farmers' profitability by up to 7.9%. The sale of water to the urban company is accompanied by a decrease in occasional labor by as much as 34.8% and a decrease of up to 17.6% in farmers' expenditures for inputs and machinery. Additionally, results obtained in this paper show that inter-year storage of irrigation water may be more advantageous than selling water to the urban utility. Whether farmers would opt to sell water or inter-temporarily store it would depend on the establishment of water rights and the empowerment of farmers.
AB - Water markets can improve water use efficiency through the transfer of water to users who can obtain the highest marginal return from using it. Existing water markets are implemented among farmers or between farmers and urban water companies or hydropower companies. Several studies have shown that farmers may benefit from trading water mainly in countries where water scarcity is increasing and new water supply projects are either very costly or not possible because of environmental concerns. This paper estimates the potential benefits and losses of implementing water market among farmers and between farmers and urban water company in Tunisia. We used linear programming to examine four separate farm models and an aggregate model. The method is applied to an irrigation area of 4500 ha in Northern Tunisia. Results indicate that water trading among farmers would be quite limited and would have a minor impact on farmers' income. In contrast, the market among farmers and the urban water company offers higher volumes of water trades to urban users and helps increase farmers' profitability by up to 7.9%. The sale of water to the urban company is accompanied by a decrease in occasional labor by as much as 34.8% and a decrease of up to 17.6% in farmers' expenditures for inputs and machinery. Additionally, results obtained in this paper show that inter-year storage of irrigation water may be more advantageous than selling water to the urban utility. Whether farmers would opt to sell water or inter-temporarily store it would depend on the establishment of water rights and the empowerment of farmers.
KW - Carryover storage
KW - Linear programming
KW - Urban water
KW - Water rights
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U2 - 10.1016/j.agwat.2004.09.018
DO - 10.1016/j.agwat.2004.09.018
M3 - Article
AN - SCOPUS:13444309270
SN - 0378-3774
VL - 72
SP - 161
EP - 175
JO - Agricultural Water Management
JF - Agricultural Water Management
IS - 3
ER -