Insights from a Calibrated Optimization Model for Irrigated Agriculture under Drought in an Irrigation District on the Central Mexican High Plains

Abstract

An economic assessment of the value of agricultural water was conducted at the subdistrict (module) level within the Alto Rio Lerma Irrigation District 011 in Guanajuato, Mexico. The assessment employed positive mathematical programming (PMP), a deductive valuation methodology, which self-calibrates to baseline production input use. Production and water use values for the 2016–2017 agricultural year, and the averages of the 2014 to 2017 agricultural years for yields, agricultural commodity prices, and production costs were employed disaggregated per irrigation module. Results indicate that the economic value of water is 1.8 to 4.7 times higher than the rate currently paid by users, about US$7.89 dam−3 (cubic decameters). The differences among the rate and shadow prices could create a pricing water policy focused on water conservation and its efficient use. This work also conducts an assessment of a formal water market in the irrigation district as way to achieve economically efficient water allocations and reduce the potential economic impacts of water shortage during droughts. Modeling results show that an active water market would allow the irrigation district to adapt to scarcer water conditions by shifting cropping patterns and trading water among subdistricts, by reducing loss in net income at the irrigation district. A successful implementation of this system would be feasible, provided that the irrigation modules are able to import and export water, under water scarcity scenarios considered for the water market model. Potential distributional effects and policy insights from this assessment are discussed.

Reallocation of water in agriculture under drought conditions as economic efficiency maximizer

“…This behavior shows that -within the irrigation modules of a district-the resource was bought and sold in those places where high profit crops are sown, or water demand is lower. Rodríguez-Flores et al (2019) recorded a different situation in their study. They evaluated a formal water market for all the ID 011, where the four modules with highest overall shadow prices imported the resource.…”

“…In Irrigation District 011 (ID 011), the agricultural production yield has been impacted by the reduction of the volume in the whole basin. Several studies that tackle the valuation of water within ID 011 have proposed some methodologies to estimate the value of water, mainly in water scarcity scenarios (Florencio-Cruz et al, 2002;Rubiños-Panta et al, 2007;Rodríguez-Flores et al, 2019;Pineda-Espejel, 2019). Overall, these researches focus on the analysis of water optimization aspects between the different crops and the estimation of marginal productivity.…”

“…Overall, these researches focus on the analysis of water optimization aspects between the different crops and the estimation of marginal productivity. Rubiños-Panta et al (2007) and Rodríguez-Flores et al (2019) have analyzed the water right transfer and the water reallocation between the irrigation modules of ID 011.…”

Hydro-Economic Modelling for Water-Policy Assessment Under Climate Change at a River Basin Scale: A Review

“…Among the different applications of HEMs, there are many examples with a main focus on water-quality issues (e.g., [48][49][50][51][52]), water-allocation strategies (e.g., [34,[53][54][55][56]), water-policy instruments (e.g., [57][58][59]), and land-use planning policies (e.g., [60]), among other concerns. Furthermore, interest in the assessment of the impacts of and adaptation to CC of water-resource systems, and the consideration of the associated uncertainties and risks to various climatic scenarios in the application of HEMs have attracted increasing attention [14,43,[61][62][63][64][65][66][67][68].…”

Mycorrhizal-Bacterial Amelioration of Plant Abiotic and Biotic Stress

“…Some authors have proposed that up to 20% of the world's total arable land is affected by this problem, especially in arid and semi-arid regions (Horie et al, 2012;Hanin et al, 2016;. In these regions, high temperatures and water scarcity also negatively affect agricultural production, increasing the costs to irrigate crops efficiently (Rodríguez-Flores et al, 2019). In addition, biotic factors, such as the presence of pathogens and pests can destroy crops.…”