The value of irrigation water with uncertain future rain: a simulation case study of sugarcane irrigation in northern Australia

Stoeckl, N., and Inman-Bamber, N.G. (2003) The value of irrigation water with uncertain future rain: a simulation case study of sugarcane irrigation in northern Australia. Water Resources Research, 39 (10). pp. 1302-1307.

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Abstract

Using sugarcane as a case study, this paper shows how an agronomic model can be used to estimate the marginal value of stored irrigation water with uncertain future rain. We do this by estimating production functions that have the water available for use as the variable factor of production (referring to them as allocation production functions). These differ from more "traditional" production functions which use the water actually applied as the variable factor of production (referred to here as irrigation production functions). We note that the amount of water actually applied is jointly determined by the amount of water that is available and by rainfall. Hence imperfect information vis-a-vis future rain means that irrigation water may be overvalued if the difference between the water available for use and the water actually used is not considered. We use results from simulations of sugarcane irrigation in northern Australia to demonstrate the potential magnitude of this overvaluation, and to examine the "value" of prepurchased irrigation water in various circumstances.

Item ID: 766
Item Type: Article (Refereed Research - C1)
Keywords: irrigation; rain; uncertainty; value; simulation; sugarcane
ISSN: 1944-7973
Funders: SRDC
Date Deposited: 15 Mar 2010 03:01
FoR Codes: 14 ECONOMICS > 1402 Applied Economics > 140201 Agricultural Economics @ 80%
07 AGRICULTURAL AND VETERINARY SCIENCES > 0703 Crop and Pasture Production > 070399 Crop and Pasture Production not elsewhere classified @ 20%
SEO Codes: 96 ENVIRONMENT > 9609 Land and Water Management > 960905 Farmland, Arable Cropland and Permanent Cropland Water Management @ 50%
91 ECONOMIC FRAMEWORK > 9102 Microeconomics > 910299 Microeconomics not elsewhere classified @ 50%
Citation Count from Web of Science Web of Science 2
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