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Econometric Forecasting of Irrigation Water Demand Conserves aValuable Natural Resource

Published online by Cambridge University Press:  26 January 2015

Swagata “Ban” Banerjee  and
Babatunde A. Obembe
Swagata “Ban” Banerjee
Affiliation:
School of Agriculture at the University of Wisconsin-Platteville, Platteville, Wisconsin
Babatunde A. Obembe
Affiliation:
Agribusiness at Alabama A&M University, Normal, Alabama
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Extract

Natural causes (such as droughts), non-natural causes (such as competinguses), and government policies limit the supply of water for agriculture ingeneral and irrigating crops in particular. Under such reduced water supplyscenarios, existing physical models reduce irrigation proportionally amongcrops in the farmer's portfolio, disregarding temporal changes in economicand/or institutional conditions. Hence, changes in crop mix resulting fromexpectations about risks and returns are ignored. A method is developed thatconsiders those changes and accounts for economic substitution and expansioneffects. Forecasting studies based on this method with surface water inGeorgia and Alabama demonstrate the relative strength of econometricmodeling vis-à-vis physical methods. Results from a study using this methodfor ground water in Mississippi verify the robustness of those findings.Results from policy-induced simulation scenarios indicate water savings of12% to 27% using the innovative method developed. Although better irrigationwater demand forecasting in crop production was the key objective of thispilot project, conservation of a valuable natural resource (water) hasturned out to be a key consequence.

Keywords

acreage allocationeconometric forecastingexpansion effectinstitutional changeirrigationproductionsubstitution effectwater conservationQ12Q25
Type
Session Title: Assistant Professor Leadership Award Winners' Invited Paper Series
Information
Journal of Agricultural and Applied Economics , Volume 45 , Issue 3 , August 2013 , pp. 557 - 568
Copyright
Copyright © Southern Agricultural Economics Association 2013

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