The agricultural water market (or water trade) is an effective water resource management tool to redistribute water from low-value to high-value agricultural farms. Water markets can play an important role in reducing the economic losses attributed to droughts by increasing flexibility in responding to water scarcity. Climate change has increased the scarcity and uncertainty of the agricultural water supply in the Mobile River Basin, mainly in Alabama, USA, which has imposed a huge risk to crop production in the region. In this study, agricultural water productivity is used to evaluate the value of irrigation water, and an analytical framework is developed to quantify potential economic efficiency gains within the river basin if water markets were to be implemented under future hydroclimate conditions. This approach circumvents the caveats of the traditional methods of estimating irrigation water demand. The results show that agricultural water markets can reduce the adverse impacts of climate change on the overall catchment-scale agricultural output in economic terms. The scenario approach presented in this study can provide preliminary estimates of the benefits of water trading, particularly in periods of drought and under future conditions of decreasing precipitation. The findings can aid in reducing the economic losses encountered by farmers under rainfed agricultural practices at a global scale…. Read more

Skip to content