Role of the irrigation charges to induce the adoption of water saving innovation in semi-arid regions

Abstract

The paper investigates about the effectiveness of water charges in inducing farmers to adopt the technical innovation aimed at water saving. It is claimed that by increasing water charge, the signal of the scarcity of the water resource is directly and effectively conveyed to farmers, who are supposed to promptly react by adopting a water saving technology. The analysis is referred to two types of innovation: an agronomic innovation, consisting on a crop mulching practice, and a management innovation, based on a voluntarily water pricing scheme with tariffs differentiated according to a peak and off-peak season. A theoretical model based on farms’ profit maximization is proposed, to evaluate the trigger conditions for the innovation. The model is applied to a case study referred to a semi-arid region, located in the South of Italy, according to which there is no clear evidence that a generalized increase may induce farmers to adopt the innovation