Water Resources Research

Water pricing: Analysis of differential impacts on heterogeneous farmers

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Abstract

[1] European water policy requires all EU Member States to implement volumetric water pricing at rates that roughly cover the total costs of providing water services. The objective of this paper is to develop a methodology that will enable us to analyze the differential impact that a water pricing policy for irrigation would have on heterogeneous farmers of an irrigated area. For this purpose, multiattribute utility theory (MAUT) mathematical programming models were used. The methodology is implemented on a representative area in the Duero Valley in Spain. Our results show the usefulness of differential analysis in evaluating the impact of a water pricing policy. From them we observe significant differences in the evolution of agricultural incomes and estimate the cost recovery by the state, the demand for farm labor, and the consumption of agrochemicals resulting from the rise in water price between the various groups of farmers established within the analyzed irrigated area.

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