Econometric Forecasting of Irrigation Water Demand Conserves a Valuable Natural Resource

Natural causes (such as droughts), non-natural causes (such as competing uses), and government policies limit the supply of water for agriculture in general and irrigating crops in particular. Under such reduced water supply scenarios, existing physical models reduce irrigation proportionally among...

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Bibliographic Details
Published in:Journal of agricultural and applied economics 2013-08, Vol.45 (3), p.557-568
Main Authors: Banerjee, Swagata “Ban”, Obembe, Babatunde A.
Format: Article
Language:English
Subjects:
Agriculture
Basins
Crops
Data smoothing
Drought
Estimates
Irrigation
Irrigation water
Natural resources
Prices
Profits
Session Title: Assistant Professor Leadership Award Winners' Invited Paper Series
Soybeans
Studies
Water demand
Water shortages
Water supply
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Summary:Natural causes (such as droughts), non-natural causes (such as competing uses), and government policies limit the supply of water for agriculture in general and irrigating crops in particular. Under such reduced water supply scenarios, existing physical models reduce irrigation proportionally among crops in the farmer's portfolio, disregarding temporal changes in economic and/or institutional conditions. Hence, changes in crop mix resulting from expectations about risks and returns are ignored. A method is developed that considers those changes and accounts for economic substitution and expansion effects. Forecasting studies based on this method with surface water in Georgia and Alabama demonstrate the relative strength of econometric modeling vis-à-vis physical methods. Results from a study using this method for ground water in Mississippi verify the robustness of those findings. Results from policy-induced simulation scenarios indicate water savings of 12% to 27% using the innovative method developed. Although better irrigation water demand forecasting in crop production was the key objective of this pilot project, conservation of a valuable natural resource (water) has turned out to be a key consequence.
ISSN:1074-0708
2056-7405
DOI:10.1017/S107407080000506X