Water authorities' pricing strategies to recover supply costs in the absence of water metering for irrigated agriculture

Most of the irrigated agricultural regions in Europe are supplied by surface irrigation networks managed by local water authorities (WAs). Under such conditions,WAs are not able to fully monitor water usage and farmers have an information advantage vis-a-vis theWA. This results in the water authority suffering 'pricing failure' if it decides to apply an incentive pricing strategy (tariffs proportional to the alleged water uses). Indeed, farmers could exploit their information advantage by behaving in an opportunistic manner, withdrawing more water than declared, and ultimately paying less than they should. This situation could also undermine the efficacy and the efficiency of theWA incentive pricing strategies. This paper analyses incentive water pricing schemes under asymmetric information by the means of a Principal-Agent model. The Agency problem between the WA and farmers is addressed by introducing a monitoring strategy that would enable the WA to detect farms action. In doing so, we compare incentive strategies with flat rate water pricing and investigate under what conditions the WA might provide/not provide incentive water pricing in the absence of water metering

The design of pricing policies for the management of water resources in agriculture under asymmetric information

The pricing method mostly adopted by water authorities (WAs) supplying water for irrigation through surface irrigation networks is the flat rate. This scheme violate either the Water Framework Directive (WFD) Incentive Pricing Principle (IPP) and Polluter Pays Principles (PPP), not providing incentives for efficient water uses and disregarding differences in irrigation water use among farmers. The use of flat rates is justified by the fact that monitoring water uses is too costly and even not effective, as WAs operate in conditions of hidden information. Under such conditions, by being unable to monitor water use, farmers have an information advantage against the WA. This fact exposes the WA to suffer a ‘pricing failure’ if it decides to apply an incentive pricing strategy (tariffs proportional to the alleged water uses). Indeed, farmers might exploit their information advantage behaving in an opportunistic way withdrawing more water than declared and finally paying less than they should. This would undermine the effectiveness and the efficiency of the WA’s pricing strategies. Under these circumstances the thesis investigates the design of incentive pricing options through a principal-agent model under full and asymmetric information, in a way of modulating water tariffs with farms’ water supply costs by irrigation. In addition, the thesis illustrates how asymmetry of information and transaction costs drive the WA to propose a less efficient contract solution due the rent extraction needed to reveal farms’ private information and guaranteeing the implementation of the pricing strategy. The main conclusion arising from this research turns to be that; the implementation of a pricing strategy depends upon the context surrounding the irrigation network

Pricing Unmetered Irrigation Water under Asymmetric Information and Full Cost Recovery

The objective of this study is to define an efficient pricing scheme for irrigation water in conditions of unmetered water use. The study is based on a principal-agent model and identifies a menu of contracts, defined as a set of payments and share of irrigated area, able to provide incentives for an efficient use of the resource by maximizing social welfare. The model is applied in the case study of the Çukas region (Albania) where irrigation water is not metered. The results demonstrate that using a menu of contracts makes it possible to define a second best solution that may improve the overall social welfare derived from irrigation water use compared with the existing pricing structure, though, in the specific case study, the improvement is small. Furthermore, the results also suggest that irrigation water pricing policy needs to take into account different farm types, and that appropriate contract-type pricing schemes have a potential role in providing incentives to farmers to make irrigation choices to the social optimum

Left Ventricular Assist Device End-to-End Connection to the Left Subclavian Artery: An Alternative Technique

We describe a modified implantation technique for the HeartWare ventricular assist device. We access the apex through a left minithoracotomy. The outflow graft is tunneled through a small incision in the fourth intercostal space and then subcutaneously to the subclavian region. After division of the left axillary artery, an end-to-end anastomosis is performed to the proximal part, and the distal vessel is connected end-to-side through a fenestration in the outflow graft. We believe that this technique, particularly suitable for redo scenarios or severely calcified aorta, achieves a more direct blood flow into the aorta and reduces cerebrovascular events while avoiding excessive flow to the arm

Pricing Unmetered Irrigation Water under Asymmetric Information and Full Cost Recovery

The objective of this study is to define an efficient pricing scheme for irrigation water in conditions of unmetered water use. The study is based on a principal-agent model and identifies a menu of contracts, defined as a set of payments and share of irrigated area, able to provide incentives for an efficient use of the resource by maximizing social welfare. The model is applied in the case study of the Çukas region (Albania) where irrigation water is not metered. The results demonstrate that using a menu of contracts makes it possible to define a second best solution that may improve the overall social welfare derived from irrigation water use compared with the existing pricing structure, though, in the specific case study, the improvement is small. Furthermore, the results also suggest that irrigation water pricing policy needs to take into account different farm types, and that appropriate contract-type pricing schemes have a potential role in providing incentives to farmers to make irrigation choices to the social optimum