Agriculture Reference
In-Depth Information
overdraft. Farmers in these regions will therefore be unwilling to pay for the same
quantity of imported project water as the amount currently being overdrawn, which
means that overdraft will continue to occur.
The former central government intended to resolve the inconsistency in transfer
allocation targets by subsidising the price of transferred water allocated to agriculture,
and by charging higher prices to urban and industrial water users. The subsidy needed to
maintain the whole 561 hm
3
of transferred water for agriculture, at the low water prices
currently paid by farmers in the south-east, amounts to 301 million
4).
This option could have turned out to be politically untenable, because urban users of
imported water might have opposed excessive subsidies for agricultural users.
Finally, an
alternative combining both demand and supply measures
is considered.
This alternative combines a groundwater overdraft ban, allowing water trading between
counties, and the supply of desalinated seawater to selected coastal counties. Water
trading between counties is conducted along the existing conveying facilities of main
rivers and canals. It takes water to where it is most valued according to water shadow
prices in each county, which suggest that water transfers can be expected along the
Vinalopó, Segura (including Argos and Quipar tributaries), Guadalentín, Almanzora and
Andarax rivers, and along the Canal Margen Izquierda and Canal Campo de Cartagena.
Results from the combined scenario show a significant reduction of 362 hm
3
in water
use and moderate losses of 83 million
-rent (Tables 3 and 4). The gain in quasi-
rent when shifting from the overdraft ban (-408 mill.
to the combined alternative
(-83 mill.
and desalination is
measured by the economic surplus, or area between the counties' excess supply and
excess demand curves (Figure 2). These optimal trade and desalination flows are
calculated by maximising welfare.
!
Ranking of water management alternatives
The results for each water management alternative are summarised in Tables 3 and 4.
Table 3 presents water demand scenarios under each alternative, and also the planned
allocation of water under the Ebro project. Table 4 shows farmers' quasi-rent losses under
each alternative, and therefore the subsidies needed in order to maintain farmers' quasi-
rent.
Farmers' quasi-rent losses are obtained by comparing the proposed alternative with
the current situation. Under the present baseline scenario, quasi-rent is above 1,700
million
3
,
"
around 1,400 million
by 0.12
3
. A groundwater overdraft ban
and to 1,300 million
by 0.18
reduces quasi-rent to 1,300 million
#
alternative, quasi-rent exceeds
1,600 million
higher than under any other demand measure. The Ebro transfer
project maintains current quasi-rent, but requires 300 million
maintain
the low water prices currently charged to farmers.
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