Institutional and Economic Dynamics of Water Users Cooperative (WUC) Societies in Cauvery Basin of Karnataka

The economic and institutional dimensions of water users cooperative (WUC) societies have been analyzed with regards to performance, membership and transaction costs in forming organization in the Cauvery basin of Karnataka. Field data have been collected from presidents and members of 30 WUC societies in Tirumakudalu Narasipura taluk of Mysore, Karnataka. Using cluster analysis, these have been grouped into (i) well performing, (ii) moderately performing, and (iii) poorly performing WUC societies. To understand institutional and economic dimensions, the selected WUC societies have been grouped based on command area, membership and conjunctive use of water. The odds ratio determined using logit model has indicated that for every one chance of not willing to pay additional water charges, there are seven chances of willingness to pay. Landholding size of farmer, conjunctive use and distance of the farm from canal have been found to significantly influence his/her willingness to pay for the assured summer irrigation. The mean willingness to pay amount for assured summer canal water has been found as ` 178 over and above the existing charge of ` 100. With all the odds being faced by these cooperatives, this study has revealed the inner strength of water user cooperative societies in canal water distribution through collective action.Water users cooperative society, Institutional economics, Water institutions, Cauvery Basin, Agricultural and Food Policy, Q13, Q15, Q25, K00,

Groundwater markets and water use efficiency: The case of Karnataka

This study, based on primary data collected from 120 groundwater users in eastern dry zone of Karnataka compares the water use efficiency among different categories of water users, viz. well owners who do not sell water, well owners who sell water either for agricultural or non-agricultural use and water buyers (both agricultural and nonagricultural). Some of the important findings are- • The cropping pattern varies between categories, with both the sellers and buyers preferring low water intensive mulberry crop, while the self user's category grew more water intensive crops. • Farmers who sold water for non-agricultural purposes earned the highest return (because of higher end-use price) and also made the most efficient use of water. Thus, making a point that end-use pricing is a key in shaping marginal productivity of water. • Compared to the self-users, farmers selling water for either agricultural or non-agricultural purposes realized higher marginal productivity. Thus,groundwater markets acted as an effective tool in enhancing efficient use of a scarce resource.This study explores efficiency and equity in groundwater markets in the hard rock areas of Karnataka. It compares the water use efficiency of farmers using groundwater for irrigating their land and also selling it for agricultural purpose (WSA, n=30), farmers using water for irrigating their land and also selling for non-agriculture purpose (WSNA, n=15), farmers who do not either sell or buy water but use it on their farms (WO, n=30), farmers who are buying groundwater for agriculture purpose (WBA, n=30), and buyers of water for non-agriculture purpose (WBNA, n=15). The Nash equilibrium framework describing the bargaining power of buyers and sellers of groundwater is used. Sidlaghatta taluk in eastern dry agroclimatic zone (EDZ) of Karnataka is chosen because it supports intensive groundwater markets. The objective of the study is to find out water use efficiencies among different groups of water users with the hypothesis that WSNA obtain higher water use efficiency than WSA, WBA, and WO.Groundwater markets, efficiency, equity, Resource /Energy Economics and Policy,

Groundwater markets and water use efficiency: The case of Karnataka

Research highlight based on a paper titled “Groundwater markets promoting efficiency in water use in agriculture in Karnataka.”Water market, Groundwater extraction, Water use efficiency, Wells, Crop production, Irrigation water, Domestic water, Pricing, Models, Policy, India, Karnataka, Demand and Price Analysis, Environmental Economics and Policy, Food Security and Poverty, Productivity Analysis,

Economic Analysis of Transaction Cost on Kolaramma Tank Watershed in Eastern Dry Zone of Karnataka

The transaction cost incurred on the Kolaramma tank watershed in the Kolar district of Karnataka, with a geographical area of 6,570 hectares and covering 26 catchments has been found to be Rs 78,89,210. The decomposition of this transaction cost into information, contractual and enforcement costs has revealed that enforcement cost amounted to a vast share of 82.0 per cent, followed by contractual cost (13.6%) and information cost (4.4%) in the total transaction cost. Considering the overall transaction cost, the investment on information and contractual cost has been quite less. These need to be increased by economizing on the administrative expenses of the implementing agency. Any additional investment on information and contractual cost would greatly benefit the actual beneficiaries in the watershed.Resource /Energy Economics and Policy,

Economic analysis of groundwater markets in central dry zone of Karnataka

Water market, Groundwater irrigation, Water use efficiency, Economic analysis, India, Karnataka, Agribusiness, Agricultural Finance, Crop Production/Industries, Environmental Economics and Policy, Production Economics, Productivity Analysis,

Economic Analysis of Groundwater Markets in Central Dry Zone of Karnataka

Groundwater, unlike surface water, is expensive and relatively scarce and hence should be used to grow crops that are responsive to protective irrigation, require less water and are remunerative. Sellers and buyers of groundwater have put large areas under paddy, a water-intensive crop. This needs to be disciplined through effective groundwater institutions. Groundwater literacy has to be promoted by educating farmers on the pros and cons of overexploitation. For farmers who do not own wells, one way to enable access to water is through group investments in well irrigation. This would require provision for institutional credit for such groups and energization of pumpsets. This will provide an environment of sharing available groundwater and the associated costs. The functioning of groundwater markets in hard rock areas of the semi arid dry zone of Karnataka show two types of arrangements. In the first one, irrigation services are provided on demand and water charge is levied on hourly basis. In the second one, irrigation services are provided for the whole crop season, and cash equivalent of a fixed share of crop produce is paid as water charge. For water buyers, crop sharing arrangement yielded higher returns than that under hourly rates. Comparative analysis of allocative efficiencies of input use for sellers and buyers in groundwater markets show that water buyers obtain higher economic efficiency in water used for crop production than sellers, though both buyers and sellers are growing water-intensive crops such as paddy.water markets, Resource /Energy Economics and Policy,

Hyperbolic discounting in analyzing investment in groundwater irrigation in India

Researchers are often confronted with the choice of discount rate as well as the method of discounting for estimating the amortized cost of long-term investment in agriculture including groundwater irrigation. The obvious choice is to use the opportunity cost of capital, which is the prevailing interest rate of around 9 percent (compounded – exponential basis), charged on longterm agriculture loans. However, using the ‘exponential’ basis does not provide a realistic amortized cost of irrigation as it over estimates the value of investment due to ‘exponential’ basis as demonstrated above. In order to obtain an empirical estimate of this interest rate, using field data from farmers three dry agro-climatic zones of Karnataka (Shamsundar (1996), Sripadmini (2001), Chaitra (2002), Rajendra (2003)) nominal investment per irrigation well is considered (Table 3). The nominal investments were deflated using the index number of wholesale prices (1993-94 base year). Considering nominal and real growth in investment per irrigation well between the 1980’s and 2000’s in the three agro-climatic zones of Karnataka, using the exponential discounting, the nominal investment per well is found to be increasing between 3.7 and 5.7 percent. This shows that the amortization of groundwater investment cannot exceed say six percent. The real (exponential rate of) interest is computed by deflating the initial year investment and the terminal year investment per irrigation well using the 1993-94 as base all India wholesale price index numbers. It is found that in real terms the investment per well is falling between –2.5 percent and –0.17 percent.(Table 3). The fall in real investment is due to increased competition by rig owners in offering almost uniform rate of drilling over the years in several aquifers of Karnataka. For instance the price of drilling has been between Rs. 35 and Rs. 50 per feet between 1985 and 2005 for shallow bore wells. The phenomenon may not be very different in other states of peninsular India. A comparison of nominal investment in terminal year and the estimated cost of well in 2005 indicates that in EASTREN DRY ZONE the nominal interest rate is 3.7 percent, the real interest rate is –0.17 percent and the investment per well in 2002 (terminal year) being Rs. 53,478 and in 2005 (current year) being Rs. 59578 are comparable. But in CENTRAL DRY ZONE, while the nominal investment per well in 2000 is Rs. 45,000, the estimated investment in 2005 is Rs. 59,193, which is an unrealistically high exponential growth obtained by compounding the initial investment of Rs. 18,480 from 1984 to 2005. Similarly in EASTREN DRY ZONE, while the actual investment per well in 2000 is Rs. 75,095, the estimated investment per well in 2005 works to Rs. 97,702, which is again unrealistic. As the real interest rate is negative in irrigation wells, this could be one of the reasons for mushrooming of irrigation wells in Karnataka, since this makes investment affordable across different classes of farmers. Thus this analysis has two messages. One, that the nominal interest rate which has to be considered for amortizing investment on irrigation well can be around 3 to 6 percent, and that the real investment per well is falling.hyperbolic discounting, groundwater, exponential, Environmental Economics and Policy, Institutional and Behavioral Economics, Research Methods/ Statistical Methods, D9, Q25, M4,

Externalities of groundwater contamination due to pollution and effects on human and animal health in Karnataka

In this study, negative externality due to distillery pollution on agriculture in Kabini command in Nanjanagudu taluk, Mysore District is estimated. The spent wash let in lagoons enables settling heavy metals to infiltrate soils, gradually affecting soil and health. The distillery opened during 1985 and farmers apparently began experiencing the negative externalities due to pollution from 1995. The groundwater extracted for irrigation was the first victim of distillery pollution rendering it unfit even for irrigation purposes. Paddy, sugarcane, Banana, Jowar, Mulberry, Coconut, Ragi are the major crops being grown in this command area. For this study, all the 35 distillery pollution affected farmers in the Distillery Dffluent Polluted Villages (DEPA, comprising Geekalli, Goluru) are selected. As a control, 35 farmers who were located in Devarasanahalli in the Kabini command area, but who are away from the distillery pollution area are studied. The major effect of groundwater pollution is the downward shift in sugarcane area due to pollution to the tune of 60 percent in DEPA. Area under paddy did not alter after pollution. Thus, farmers considered paddy to be the only crop which can tolerate / withstand, pollution levels. Crop diversity in terms of area under crops like tomato, ragi, jower, cucumber and banana increased in DEPA as the farmers shifted from sugarcane. In the control village, major crops grown are paddy and sugarcane due to assured supply of good quality of water through out year, and these occupied 20 and 50 per cent of the area respectively.Sand mining, externality, groundwater depletion, Environmental Economics and Policy, Health Economics and Policy, Research and Development/Tech Change/Emerging Technologies,

Contract farming and its implications for input-supply, linkages between markets and farmers in Karnataka

This study is focused on the economic analysis of contract farming with a comparison of income, access to technology and credit of contract and non-contract farmers. The advantages of contract farming for smallholders have also been evaluated. In contract farming, quality inputs such as seeds, fertilizers and plant protection chemicals are provided to the farmers at their farm gate, coupled with the technical advice on production aspects. This not only reduces the working capital needs of farmers but also substantially reduces their transaction cost per unit of output. Borrowing of crop loans has been found 33 per cent higher by non-contract farmers than contract farmers, as the former have to buy material inputs. The net returns have been found higher for contract than non-contract farmers. Within contract farming, net returns have been recorded higher under domestic than foreign contracts for both baby corn and chilli. In the case of non-contract farmers, the net returns (Rs 3,035) have been found less than one-third of domestic contract farmers (Rs 10,610) and slightly more than one-third of foreign contract farmers (Rs 8,050). In the case of chilli also, the net returns realized per acre have been recorded maximum under domestic contract farmers, followed by foreign contract farmers and non-contract farmers. The returns per rupee invested have been noted higher in farming of baby corn in all the three categories than those of chilli farming. The constraints identified in the study include delay in payment and delivery of inputs, delay in lifting the produce, access to seeds, manupulation of grades by the buyers, and high cost of inputs in contract farming. Factors inducing farmers into contract are: low initial investment, better price for the produce, access to market, technical support on package of practices, access to inputs and easy transportation facilities.Farm Management,

Economic impact of Water users cooperatives: Institutional and economic dynamics in Cauvery Basin, India.

Water User Cooperative Society (WUCS) is an organization of water users administered using the principles of Cooperation. In the Cauvery Basin of Karnataka, 581 WUCS have been registered under Cooperative Society Act. To study the activity and the progress of WUCS, information was collected from the President / Secretary of thirty WUCS in Krishnarajasagar (K.R.S.) and Kabini command of Cauvery basin. Using cluster analysis, WUCS with similar characteristics (explanatory variables) were grouped into three clusters. First cluster of WUCS (20%) is characterized as well performing, with lowest transaction cost of forming WUCS (3 months), high cooperation and fund availability. Second cluster characterized as moderate WUCS (20%) had a transaction cost of 3 months with a total fund of Rs. 21,283. Third cluster as poor performing WUCS (60%) had highest transaction cost of 5 months with fund availability of Rs. 21,950. The head and tail reach farmers of Active-WUCS, Active with conjunctive WUCS (Active-CU WUCS) and Passive-WUCS command were interviewed personally (90 sample farmers). The return of Kharif paddy per rupee of CostB2 in Active-CU-WUCS (1.25) was higher than the Passive-WUCS (1.23) and Active-WUCS (1.18). Similarly, tail reach farmers of Active-CU-WUCS received net returns of Rs. 2,301, followed by Active-WUCS (Rs. 398), but Passive-WUCS incurred economic loss of Rs. 73. ANOVA indicated significant difference in net returns per acre per annum among three WUCS (1%), and t-test indicated significant difference between “Active-CU-WUCS and Passive-WUCS” and “Active-WUCS and Passive-WUCS.” The discriminant function analysis indicated that, the size of holding and the ratio of area irrigated by borewell to total area were the major factors in discriminating members and non-members. Logit regression function for willingness to pay water rate for assured summer irrigation as dependent variable showed, land holding of the farmer and distance of the farm from canal as significant factors. WTP additional water rates for assured irrigation was estimated using Tobit regression which indicated that land holding of the farmer, use of borewell Irrigation and distance of the farm from canal were the significant factors influencing the farmers’ willingness to pay