Agriculture - conditions for success in managing agriculture water demand Agriculture consumes # 65% of blue water; is at crossroads of: Water, food, social, rural development, tourism, energy… policies “Water is the asymptotic line of development” (Governor of Marrakech Province)
Agriculture & Water ‘Economics from inside’ 1. Continuous groundwater depletion:
law seems to be weak and not enforced enough (fraud, ‘compromising’) => what potential for quotas, tariffs, market instruments and stakeholder involvement?
2. Water supply costs not recovered in Jordan Valley irrigation schemes
rationale for raising tariffs, though service should improve accordingly what value added of WUAs?
3. Neither better valuation of water nor increase in water tariff (at current tariff level) seem to be effective for saving water => water seen as a fixed asset by farmers? => How to combine
Sustainable and equitable farmers’ income and employment Access to intensification for improving water valuation Risk management (regular water supply, market outlets) Gradual increase in tariffs – shift to volumetric tariff? AND water savings?
Economics of water demand management in Jordan - Amman and Dead Sea, 1-3 Dec. 2011
Policy instruments - the “how” issue • Public investment: changing physical environment • Laws, regulations, “quantity” instruments: changing rules of the game • Taxes, subsidies, incentives, ”price” and market instruments: changing behaviors • Awareness, information: changing preferences • Stakeholder involvement, institutions, cooperation, contracts: subsidiarity, acceptability => minimizes long term transaction costs => Performance of instruments to be assessed on costeffectiveness criteria Economics of water demand management in Jordan - Amman and Dead Sea, 1-3 Dec. 2011
Agriculture & Water ‘Economics from outside’ 1. What does ‘food security’ means?
Self-sustainability in food and agricultural products? Equilibrium in agricultural trade balance? Capacity to purchase any amount of imported goods at any price to meet demand? Food sovereignty i.e. ability to choose first best solutions thus securing cheap, long-term supply for each commodity?
2. WHAT does society pay for through irrigation subsidies?
Is it good value for money (plus opportunity cost of water, plus resource degradation)? Are there alternatives for cheaper job creation outside agriculture?
3. What rationale for export objectives (virtual water analysis) and import duties? “It is often a matter of policy whether a given variable must be considered as exogenous or not” Economics of water demand management in Jordan - Amman and Dead Sea, 1-3 Dec. 2011