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The Economics of Groundwater Use for Irrigated Rice in Selected Municipalities of Pulangui River Basin, Cotabato Province, Philippines
Dissertation Abstract:
This study applied the Just and Pope stochastic function specification to value the agricultural productivity of groundwater use in rainfed lowland rice areas of shallow tube well (STW) farmers in four sample municipalities of the Cotabato portion of Pulangui River Basin (PRB). Using survey data, this study first established the demand for groundwater for irrigation agriculture per hectare of irrigated lowland rainfed area. The demand function revealed that pumping cost was an important factor positively influencing the volume of groundwater extraction. The positive elasticity coefficient revealed that the demand for groundwater in lowland rainfed area was considered as a necessity input/good in both wet and dry season cropping.
The pumping cost, which signifies well depth and water availability, was used as a water supply proxy variable input into the stochastic production function. The results of the estimated mean yield function showed that the cost of machinery, cost of pesticides, and pumping cost were the most important determinants of yield levels of rice of rice grown during wet season cropping. The mean yield function revealed a diminishing marginal productivity for pumping cost. Nitrogen fertilizer was positively related to yield in the dry season cropping in the sample study area.
The variance function of the stochastic production function provided empirical evidence that pumping cost (used as water supply proxy variable) reduces yield variability in the wet season cropping. This implied that risk-averse rainfed lowland rice farmers concerned with reducing income variability could use groundwater as source of irrigation as a means of reducing production risk. On the other hand, the use of potassium fertilizer in wet season cropping was yield risk reducing input. The cost of pesticides, as well as cost of machinery, increased exposures to risk. The variance function in dry season cropping showed that nitrogen fertilizer is a risk-increasing input. This supported the findings of most studies done on rice. The study proposed, though subject to further verification, that the use of shallow tube well stabilizes rice yield in rainfed lowland irrigation agriculture.
The significant higher difference in gross margin (7,323 ha-1) attained by farmers in high recharge areas in dry season cropping was probably due to higher water levels, in turn more water availability than in low recharge areas. A glimpse on prioritization in the groundwater resource use allocation for irrigation agriculture and land use planning could possibly be drawn from the analysis of the results.
The study highly recommended the provision of more extension advice to STW farmers (i.e., on use efficiency, allocation, proper water irrigation management on the various stages of rice growth, consequences of groundwater over-abstraction, and dynamics of groundwater hydrology).
The welfare loss associated with increased pumping cost could shed some light on the lower bound estimate valuation of raw water fees for irrigation agriculture that use groundwater. This lower bound estimate only considers the extraction cost but consideration on the in situ value of the groundwater resource is highly important though it is not included in this study.