Are participants in markets for water rights more efficient in the use of water?

What is it about?

The need to increase water productivity in agriculture (WUE) has been stressed as one of the most important factors to achieve greater agricultural productivity and sustainability. Our results shows that mean WUE is moderate-low. Hence, there are possibilities to improve water use efficiency in irrigated agriculture in the Limarí Basin. This is consistent with results obtained in Australia and India, among others. It is important to mention that the variation in water application rate per hectare among the various irrigated farms does not necessarily have impact on water application efficiency level. The assessment by groups illustrated that farmers participating in markets for permanentWR are more efficient from a water use point of view than farmers who do not participate in water trading. In particular, permanent WR sellers are the most efficient in the use of water, followed by permanent WR buyers.

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Why is it important?

Several papers have evaluated WUE in agriculture under different contexts and for different purposes. However, these studies have not analyzed whether there are differences in WUE between farmers who participate and do not participate in permanent WR markets or spot water markets. This paper assesses farmer’s WUE differentiating between farmers who participate as sellers or buyers in a regulated permanent surface WR markets or do not participate.