Evaluation of drought management in irrigated areas

This paper focuses on the economic consequences of droughts for the irrigation sector. We develop a dynamic-recursive mathematical programming farm model that assumes imperfect mobility of capital and labour as well as rational expectations about future water availability. The model is calibrated to 12 representative farms belonging to three irrigation communities of the Guadalquivir Basin (south Spain) and used to simulate the 1991-1997 period, which included 3 years of intense drought. Results indicate that the drought imposed significant costs on farmers, but show also that water managers partly exacerbated these costs by allocating excessive amounts of water to irrigators in the abundant years. The model is also used to evaluate the benefits of a perfect water supply forecast and to simulate the economic gains of a voluntary water banking scheme. Results show that the benefits resulting from the perfect forecast of water supply 1 year ahead would represent a relative gain of 5%. However, a voluntary banking system would allow farmers to increase their benefits by 32-82% depending on the supply system. © 2003 Elsevier B.V. All rights reserved.

Issue Date:
Publication Type:
Journal Article
DOI and Other Identifiers:
Record Identifier:
PURL Identifier:
Published in:
Agricultural Economics: The Journal of the International Association of Agricultural Economists, 29, 2
Page range:
Total Pages:
JEL Codes:
Q12; Q25; Q21

 Record created 2017-04-01, last modified 2020-10-28

Download fulltext

Rate this document:

Rate this document:
(Not yet reviewed)