Water degradation implications when whole-farm irrigation water is binding

Watts, Myles J.; Atwood, Joseph A.; Beattie, Bruce R.

doi:10.1016/j.wre.2014.11.004

Cited by 3 publications

(1 citation statement)

References 22 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…An alternative strategy, which may be more difficult to detect than a zero-irrigation strategy on an entire field, is to use a zero-irrigation strategy on a portion of the field while maintaining irrigation on the rest of the field. Watts et al (2015) find that this can be an optimal response to increased water charges under a binding water allocation. While it may be impractical to perfectly enforce the sufficient rule, it suggests that enforcement would be most effective by targeting monitoring to regions with more advanced groundwater depletion (higher irrigation costs) and high energy costs.…”

Section: Discussion and Policy Implicationsmentioning

confidence: 84%

The potential for moral hazard behavior in irrigation decisions under crop insurance

Suchato¹,

Mieno

Schoengold

et al. 2021

Agricultural Economics

View full text Add to dashboard Cite

The design of federal crop insurance has attracted the interest and attention of many economists and policymakers in the United States. Moral hazard is a frequently cited concern, as insurance may reduce the incentive for farmers to manage properly their agricultural operation. Moral hazard could play a role in irrigation decisions by incentivizing a farmer to choose a riskier irrigation management strategy, potentially affecting the long‐term sustainability of water resources. We use numerical simulation to determine if insurance coverage affects incentives on seasonal irrigation use. Results show that the potential for moral hazard at current costs and policy parameters is low, but that there is potential for moral hazard behavior when the cost of irrigation is high. Hence, conservation policies that increase the cost of irrigation cost (e.g., a water tax) may amplify the potential for moral hazard. In most cases, crop insurance provides a secondary effect that reduces irrigation use in addition to the direct water tax effect, although this reduction comes at increased taxpayer expense. However, it is possible that irrigation use increases under crop insurance. Therefore, there is a need for the explicit consideration of the unintended side effects of crop insurance on farmers’ irrigation water use decisions, particularly in regions experiencing water scarcity and rising marginal costs of irrigation.

show abstract

Section: Discussion and Policy Implicationsmentioning

confidence: 84%