Feedback links between economy-wide and farm-level policies: With application to irrigation water management in Morocco

Abstract

This paper focuses on policy interventions for improving irrigation water allocation decisions by including both macro and micro considerations in a unified analytical CGE framework. The approach is demonstrated, using the case of Morocco, by analyzing selected policy (top-down and bottom-up) interventions and external shocks that affect the water sector. Both direct and indirect effects of these interventions are identified. The top-down (macroto-micro) links are of a trade reform type. The bottom-up (micro-to-macro) links pertain to changes in farm water assignments and the possibility of water trading. We find that water productivity is strongly influenced by these policies, with the general equilibrium (indirect) effects modifying and sometimes reversing the partial equilibrium (direct) effects. We also find that the impacts of the two reforms we assessed are different, with trade reform having an absolute impact of a higher magnitude than the water reform. Finally, we show that the sequence of introducing the policy reforms has different consequences.

Alternate furrow irrigation affects yield and water-use efficiency of maize under deficit irrigation

“…Within the Euro-Mediterranean Partnership and the EU's New Neighbourhood Policy, several MENA countries will continue negotiating toward progressive liberalization of trade in agricultural products. The impact of this policy has been analyzed for various MENA countries (Lofgren et al 1997;Radwan and Reiffers 2003;and Roe et al 2005). The research concludes that:…”

“…A study in Morocco used a general equilibrium model to estimate the relative effects of broad trade reforms (removing all tariffs on imports of agricultural and nonagricultural commodities) on water reforms (creating a system of tradeable water rights and reforming agricultural water pricing) (Roe et al 2005). The study found that trade had a higher impact on gross domestic product (GDP) and wages than did water reform.…”

Economic Impacts of Total Water Use Control in the Heihe River Basin in Northwestern China—An Integrated CGE-BEM Modeling Approach

“…Computable general equilibrium (CGE) models [6][7][8][9][10][11][12][13][14][15][16] are frequently used to simulate the operations of market economy and economic consequences in terms of production, trade, growth, water use and welfare caused by policy change by specifying the behavior of relevant "agents" (e.g., producers, households, government) as they interact across markets [17]. However, one limitation of the top-down approach is that spatial difference of water availability, crop peculiarities and historical practices that vary between regions are not included [18]. As a cost, the differences in farmers' responses to water stress such as cropping system changes in different regions are ignored.…”

“…This will allow for a more comprehensive evaluation of the economic impacts of the total water use control policy. However, the literature on integration of the top-down and bottom-up models to address river basin management issue is limited [18,[25][26][27]. So far, there is no such research that focuses on the effect of total water use control in China.…”

Efectos económicos regionales de las transferencias de agua: el papel de la mobilidad de los factores en el caso del sector agrícola de Baleares

“…In a somewhat different context, Diao et al (2005) show how water transfers lead to an increase in agricultural production and income, despite the drop in agricultural wages. Similarly, Roe et al (2005) use a computable general equilibrium model to show that reallocat-ing water among farmers leads to significant increases in farmers' output and benefits.…”