Integrating strategies for an efficient water management under uncertainty: empirical evidence in Spain

Blanco Gutiérrez I., Varela Ortega C.

The aim of this paper is to analyse the irrigator's response to water pricing policies application following different agricultural policies scenarios and to assess the implementation of the full cost recovery approach (Art.9 of the Water Framework Directive). To undertake this analysis, a mathematical programming model has been built to simulate farmers' behaviour following distinct risk aversion to climate as well as market prices variations. Empirical application of the model has been carried out in two different Irrigation Communities, which represent the agriculture in Castilla-Leon, region in the northern central plateau of Spain. Results show that the application of the EU Water Framework Directive in conjunction with the new CAP reform will be crucial to avoid distortion effects but it would have to be examined carefully. Integrating both agricultural policies and water policies in the EU has to be achieved following the research for a flexible formula adapted to the necessities of each region and each water district. A similar water pricing policy could have distinct effects on water use, land use, cropping patterns, farmer's income and collected revenue by the water authority in different agricultural policy options linked to the agroclimatic and institutional structure characteristics of each affected region. Furthermore, achieving the goal of cost recovery (financial and environmental) could have negative effects on farmers' income and might question the viability of a number of irrigated farms in Spain.



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Blanco Gutiérrez I., Varela Ortega C. Integrating strategies for an efficient water management under uncertainty: empirical evidence in Spain. In : Lamaddalena N. (ed.), Bogliotti C. (ed.), Todorovic M. (ed.), Scardigno A. (ed.). Water saving in Mediterranean agriculture and future research needs [Vol. 3]. Bari : CIHEAM, 2007. p. 45-63. (Options Méditerranéennes : Série B. Etudes et Recherches; n. 56 Vol.III). Proceedings of the International Conference WASAMED Project (EU contract ICA3-CT-2002-10013), 2007/02/14-17, Valenzano (Italy).