Integrating agricultural policies and water policies under water supply and climate uncertainty

2004 
The interactions of water policies and agricultural policies are increasingly determinant for achieving an efficient management of water resources in many countries. In the EU, agricultural and environmental policies are seeking to converge progressively towards mutually compatible objectives and, in this context, the recently reformed Common agricultural Policy (Agenda 2000) and the EU Water Framework Directive constitute the policy framework in which irrigated agriculture and hence water use will evolve. In fact, one of the measures of the European Water Directive is to establish a water pricing policy for improving water use and attaining a more efficient water allocation. The aim of this research is to investigate the irrigators’ responses to these changing policy developments in a self-managed irrigation district in Southern Spain. For this purpose, we have developed a stochastic programming model that estimates the farmers’ responses to the application of water pricing policies in different agricultural policies scenarios when water availability is subject to varying climate conditions and water storage capacity in the district’s reservoir. Results show that irrigators are price-responsive but a similar water-pricing policy could have distinct effects on water use, farmers’ income and collected revenue by the water authority in different agricultural policy options. Water availability is a determinant factor and pricing policies are less effective for reducing water consumption in drought years. Thus, there is a need to integrate the objectives of Water Policies within the objectives of the CAP programs to avoid distortion effects and to seek a synergy between these two policies.
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