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Abstract
Irrigation is a vital ingredient in the modern agriculture, groundwater
development through modern water extraction mechanisms (WEMs) have
therefore, been receiving greater emphasis in recent past. However, the
ownership of private WEMs is confined mostly to the large farmers. The
small and marginal farmers and even large farmers with fragmented holdings
are buyers of irrigation water from the neighbouring WEM-owners. This
has led to spontaneous emergence of groundwater markets. Although the
water markets benefit both buyers and sellers in one or the other way, they
have created certain implications in the utilization of this resource. The
present study has examined the structure, determinants and efficiency of
groundwater markets and has suggested policy options for the realization
of equitable benefits from this resource in Western Uttar Pradesh. It is
observed that a large proportion (82 %) of the farm holdings enter into one
or the other form of water market activities. The number of buyers decreases
as the farm-size increases, while the number of sellers increased with the
increase in the size of farm. The buying of groundwater is favoured by the
farmers with small size and fragmented holdings, low education attainment
and less probability of joint-ownership of a WEM. The possibility has
been shown of increasing the productivity in major crops like sugarcane
and wheat by reducing the excessive water-use on self-users farms, which
in turn would increase the availability of water on the buyers’ farms. The
study has identified various policy options which would lead to minimizing
the inequitable distribution of benefits and improving the efficiency of
water-use under the prevailing groundwater markets system.