Résumé
Worldwide growing water scarcity has
increased the call for economic instruments to stimulate
rational water use in agriculture. In addition cost-recovery
is now widely accepted as a cornerstone of
sustainable water management. As a consequence now
in developing countries, where currently agricultural
water use is often still heavily subsidized, a tendency
exists of introducing water-pricing as a policy to achieve
more sustainable water use. The exact impact of water
pricing policies on irrigation water use or on the
farmers’ production system is however mostly unknown.
A new two-stage methodology that allows estimating at
the farm level the effects of introducing or raising a
water price on the agricultural production process and
water demand is introduced in this study. The first stage
comprises the construction of a technical efficiency
frontier and the calculation of the technical and
allocative efficiency levels of each farm. This
representation of the technology is used in the second
stage in a profit maximization model. As an example the
method is applied to the case of small-scale irrigators in
South Africa. It is shown that water demand of farmers
is quite responsive even to small changes in the water
price. Moreover, the introduction of a water price is
shown to significantly decrease farm profit. This
appears to be mainly a problem for the poorer farmers.