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Are participants in markets for water rights more efficient in the use of water than non-participants? A case study for Limarí Valley (Chile)

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Abstract

The need to increase water productivity in agriculture has been stressed as one of the most important factors to achieve greater agricultural productivity and sustainability. The main aim of this paper is to investigate whether there are differences in water use efficiency (WUE) between farmers who participate in water markets and farmers who do not participate in them. Moreover, the use of a non-radial data envelopment analysis model allows to compute global efficiency (GE), WUE as well the efficiency in the use of other inputs such as fertilizers, pesticides, energy, and labor. In a second stage, external factors that may affect GE and WUE are explored. The empirical application focuses on a sample of farmers located in Limarí Valley (Chile) where regulated permanent water rights (WR) markets for surface water have a long tradition. Results illustrate that WR sellers are the most efficient in the use of water while non-traders are the farmers that present the lowest WUE. From a policy perspective, significant conclusions are drawn from the assessment of agricultural water productivity in the framework of water markets.

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Notes

  1. Efficient farmers are those who obtain maximum production with given resources (output oriented) or minimize input use to reach a give production level (input oriented), that is, farmers with higher water productivities.

  2. 2010 is the last survey available in this area. The survey was performed in the framework of the project: “Innova—Desarrollo de un mercado electrónico para el agua en Chile” (Innova—Development of an electronic market for water in Chile).

  3. The Chilean Water Code of 1981 granted transferable water rights to individual water users to reach an efficient allocation of the resource through market transactions of water rights. In the permanent water market, water users trade water rights. On the other hand, water allocations are traded in the spot water market.

  4. Efficiency scores at individual level can be consulted as supplementary material.

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Authors and Affiliations

  1. Departamento de Ingeniería Hidráulica y Ambiental, Pontificia Universidad Católica de Chile, Av. Vicuña Mackenna, 4860, Santiago, Chile

    María Molinos-Senante

  2. Instituto de Estudios Urbanos y Territoriales, Pontificia Universidad Católica de Chile, El Comendador, 1916, Santiago, Chile

    María Molinos-Senante

  3. Centro de Desarrollo Urbano Sustentable CONICYT/FONDAP/15110020, Av. Vicuña Mackenna, 4860, Santiago, Chile

    María Molinos-Senante

  4. Departamento de Economía Agraria, Pontificia Universidad Católica de Chile, Casilla, 306-22, Santiago, Chile

    Guillermo Donoso

  5. Department of Mathematics for Economics, University of Valencia, Avd. Tarongers S/N, Valencia, Spain

    Ramon Sala-Garrido

Authors
  1. María Molinos-Senante
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  2. Guillermo Donoso
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  3. Ramon Sala-Garrido
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Correspondence to María Molinos-Senante.

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Molinos-Senante, M., Donoso, G. & Sala-Garrido, R. Are participants in markets for water rights more efficient in the use of water than non-participants? A case study for Limarí Valley (Chile). Environ Sci Pollut Res 23, 10665–10678 (2016). https://doi.org/10.1007/s11356-016-6187-2

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