Irrigation pricing policies and its impact on agricultural inputs demand in Tunisia: A DEA-based methodology

Abstract

This paper estimates farmers' individual irrigation water demand functions employing the information hidden in individual farmers' technical efficiency. This information is extracted through the development of a new deductive methodology based on inverse Data Envelopment Analysis (DEA) models. The empirical results for Tunisia show that farmers who are more technically efficient have less elastic irrigation water demand functions; these farmers would adjust demand only to a limited extent and they can afford the water price. In contrast, water pricing significantly affects those that are less efficient. These farmers shift towards a different cropping pattern using significantly less water and more land when the price of water increases. Thus, higher water prices would threaten this category's livelihood if their efficiency is not improved. However, if the technical efficiency of these farmers were to improve, then it would be more difficult to reach water saving objectives since their demand will also become highly inelastic. The findings have important implications in view of the objectives of Tunisia water policy which include:full cost recovery, continuity of the irrigation activity, and water saving at the national level.

Marginal Water Productivity of Irrigated Durum Wheat in Semi-Arid Tunisia

“…Marginal water value for the durum wheat crop will be estimated in this study in order to see if farmers are producing at the economic optimum when the marginal value of irrigation water is equal to market price of this resource (Frija et al, 2011). Moreover, marginal value of irrigation water is an indicator of the extra income generated by any additional unit of irrigation water applied to the crop.…”

“…increase of irrigated area has clear impact on the country's water resources (Frija et al, 2011). The issues of improving agricultural water management and increasing water savings are highly debated and undertaken by policy makers and researchers.…”

“…The issues of improving agricultural water management and increasing water savings are highly debated and undertaken by policy makers and researchers. Recent studies about irrigation economics in Tunisia focus on the assessment of the current efficiency of the resource use (Dhehibi et al, 2007;Albouchi et al, 2007;Frija et al, 2009;Chemak et al, 2010;, on the impact of some agricultural policies (such as water pricing), on water allocation and use (Bachta & Talbi, 2005;Zekri, 2005;Frija et al, 2011), and on the effectiveness of local collective irrigation water management (Frija et al, , 2008Ben Salem et al, 2005). While most of these researches call to encourage farmers to adopt higher valued crops as a strategy to face water scarcity in the country, little research has been done to evaluate irrigation water productivity and to analyze the marginal benefit of water use for different crops and seasons.…”

Environmental efficiency of energy, materials, and emissions

“…After Tyteca (1996), the JEM has published at least 11 papers examining environmental performance using usual DEA/FDH at firm or farm level, which is likely to have more indistinguishable outliers than at country or municipality level. Among them, 5 studies refer to and deal with outliers (or make sure there is no outlier) of their dataset (Frija et al, 2011;Gadanakis et al, 2015;Lundgren et al, 2013;Picazo-Tadeo and Prior, 2009;Van Meensel et al, 2010); 1 study only refers to the problem of outlier (Barnes, 2006); 5 studies do not refer to outliers (Barnes et al, 2009;Chen et al, 2012;De Koeijer et al, 2002;Oude Lansink and Bezlepkin, 2003;Picazo-Tadeo et al, 2011). As Tyteca mentions, the best practice frontier is not considerably suited for the value of the indicator in itself but rather as a means to rank DMUs; therefore, some may justify estimation with potential super-efficient outliers because ranking DMU itself is important as a measure to improve environmental efficiency in the actual business situation.…”

Water Authorities’ Pricing Strategies to Recover Supply Costs in the Absence of Water Metering for Irrigated Agriculture

“…In the European Union (EU) agricultural context, the European water framework directive (WFD, 2000/60CE) calls upon European water authorities (WA) to be interested in the use of economic tools to rationalize water allocations for irrigated agriculture [1][2][3]. The most challenging governance renewal issues at the WA level concern monitoring water use and designing appropriate pricing mechanisms.…”