Economic and environmental impacts of political non-cooperative strategies in water management [Elektronische Ressource] : an analysis of prospective policies in the cauvery river basin of India / submitted by Tharayil Shereef Amjath Babu

Amjath Babu, Tharayil Shereef

Informations

• Publié par: justus-liebig-universitat_giessen
• Publié le: 01 janvier 2008
• Nombre de lectures: 9
• Langue: English
• Poids de l'ouvrage: 3 Mo

Extrait

Faculty 09
Agricultural Sciences, Nutritional Sciences
and Environmental Management




Institute of Agricultural Policy and Market Research




Economic and Environmental Impacts of Political Non-
cooperative Strategies in Water Management: An Analysis of
Prospective Policies in the Cauvery River Basin of India



Dissertation
Submitted for the degree of Doktor des Agrarwissenschaften (Dr. agr.)
Faculty of Agricultural Sciences, Nutritional Sciences and Environmental
Management





Submitted by
Tharayil Shereef Amjath Babu







November 2008




This thesis was accepted as a doctoral dissertation in fulfillment of the requirements
for the degree of Doktor des Agrarwissenschaften (Dr. agr.) by Faculty of
Agricultural Sciences, Nutritional Sciences and Environmental Management, Justus-
Liebig University Giessen.









Examination committee

Chairperson: Prof. Dr. Ingrid Hoffmann
st
1 Supervisor: Prof. Dr. Ernst-August Nuppenau
nd
2 Supervisor: Prof. Dr. Siegfried Bauer
Examiner: Prof. Dr. Dr. h.c. F. Kuhlmann
Examiner: Prof. Dr. Stefan Gäth

























Acknowledgements

First and foremost, I would like to express my gratitude to my supervisor, Prof. Dr.
Ernst-August Nuppenau for inspiring me to look beyond conservative solutions to my
research problem. Academic and personal support that he extended during the years
that I spent at University of Giessen showed me the real meaning of ‘Doktorvater’. I
am also grateful to Prof. Dr. Siegfried Bauer, who is the second supervisor of this
research work, for suggestions and advises during the whole period of PhD
studentship. I am equally thankful to Prof. Dr. Suryaprakash for being a constant
inspiration in both academic and personal life starting from my masters’ life at
University of Agricultural Sciences, Bangalore.

I am deeply indebted to my wife, Rekha and my daughter Jia for being supportive
and understanding during my doctoral research days. My parents, Mr. Shereef and
Mrs. Subaida and my brother, Thambi deserve special thanks for their love and
encouragement. I am quite grateful to all my colleagues at the professorship of
environmental policy and at other professorships in the institute of agricultural policy
and market research for their contribution through comments, questions and
corrections. I also extend sincere gratitude to all my friends who supported me and
my family in various ways during our stay far away from home. Finally, I appreciate
DAAD (German Academic Exchange Agency) for their financial support which
made this doctoral thesis a reality.


















TABLE OF CONTENTS i
Table of Contents
Table of contents…………………………………………………….. i
List of tables………………………………………………………… iv
List of figures……………………………………………………….. iv
Abbreviations ……………………………………………………….. vi

1. INTRODUCTION TO THE HISTORY OF THE CAUVERY WATER
CONFLICT …………………………………………………………. 1
1.1 Evolution of a water conflict……………….………………. 1
1.2 Historical background……………….……………………… 1
1.3 Research questions…………………………………….……. 6
1.4 Objectives……………………………………........................ 6
1.5 Organisation of the study………………………………........ 6

2. RESEARCH DESIGN, DATA COLLECTION AND DESCRIPTIVE
STATISTICS……………………………………….……………….. 8
2.1 Description of the study area………………………………. 8
2.1.1 Rainfall and weather conditions ……………………. 9
2.1.2 Surface water availability in Cauvery Basin………… 10
2.1.3 Agriculture in Cauvery Basin……….………………. 17
2.1.4 Agricultural water requirement…..…………………. 20
2.1.5 Domestic and industrial demand for water…………. 22
2.2 Research design ad data collection…………..……………... 23
2.3 Overview of the farmer sample ………………………….…. 25
2.3.1 Age structure ……………………………………….. 25
2.3.2 Education and family size…………………….……… 25
2.3.3 Land characteristics and land prices………….……… 26
2.3.4 Crops….…………………………………….……….. 27
2.3.5 Comparative picture…………………………………... 27
2.3.6 Water use…………..……………………….………… 28
2.3.7 Credit availability….…………………………………. 29
2.3.8 Additional information……….………………………. 30

3. LITERATURE REVIEW ON ECONOMIC AND LEGAL ASPECTS OF
TRANSBOUNDARY WATER ALLOCATION …………………..… 31
3.1 Laws and conventions………………………………………… 31
3.1.1 International scenario………………………………… 31
3.1.2 Indian scenario……………………………….……….. 32
3.2 Transboundary institutions…………………………….…….. 33
3.2.1 Transboundary water agreements in India…….……... 33
3.2.2 Negotiation of Cauvery water allocation……………. 34
3.3 Spatial adjustments………..…………………………..…… 35
TABLE OF CONTENTS ii
3.4 Economic principles of water allocation…………..……… 36
3.4.1 Water markets in water dispute resolution………… 36
3.4.2 Limitation of existing water market models in developing
country context…………………………………………… 37
3.5 Characteristics of irrigation systems of developing countries:
An over view………………………………………………… 38
3.5.1 Technical features………………………………….… 38
3.5.2 Institutional setting…………………………………... 38
3.6 Previous study in Cauvery Basin on water allocation……….. 43
3.7 Environmental externalities in absence of water allocation
agreements …………………………………………………… 44

4. POLITICS AND ECONOMY OF NON-COOPERATION IN CAUVERY
WATER SHARING …………………………………………………. 46
4.1 Water and politics in Cauvery basin………………………… 46
4.1.1 Karnataka scenario…………………………………… 47
4.1.2 Tamil Nadu scenario…………………………………. 48
4.2 A theoretical explanation of non-cooperative behaviour of basin
states…………………………………………………………….. 50
4.3 Political importance (λ) and the underlying economic
motives………………………………………………………….. 53

5. WATER RIGHTS MARKET AS A MECHANISM TO RECONCILIATE
THE WATER SHARING DISPUTE……………………………… 55
5.1 Water rights market in a developing country: challenges and
opportunities…………………………………………………….. 55
5.1.1 Property rights: community and individual ………… 56
5.1.2 Water trade and water saving……….……………….. 57
5.1.3 Water trade and agricultural production…………….. 57
5.2 The water market setting……………………………...…… 58
5.2.1 Conceptual frame of the interstate water market……. 58
5.2.2: The supply side of the water market……………….. 59
5.3 The visible hand…………………………….…………….. 60
5.3.1 A principal-agent model of the contract scheme…… 61
5.3.2 Summary of the P-A model………………….…….. 67
5.4 Benefit of the market based water allocation in the Cauvery
basin………………………………………………………… 68

6. GROUND WATER EXTRACTION AS AN ALTERNATIVE FOR
SURFACE WATER RIGHTS AQUISITION: WEIGHING THE COSTS
AND THE BENEFITS………………………………………… 69
6.1 Investment costs in groundwater extraction …………….... 69
TABLE OF CONTENTS iii
6.2 Externality cost of pumping ground water ……………….. 70
6.2.1 Ground water levels in the Cauvery Basin………… 70
6.2.2 Hedonic regression………………………………… 71
6.3 Demand price of surface water right……………………… 78

7. ESTIMATING THE SUPPLY PRICE OF WATER RIGHTS: A NUMERICAL
SIMULATION OF THE PRINCIPAL-AGENT MODEL 79
7.1 The principal-agent specification………………………….. 79
7.2. Data for the empirical simulation………………………….. 79
7.2.1 Calibration of exogenous parameters……………….. 80
7.2.2 Contingent valuation exercise….….………………… 81
7.2.3 Endogenous variables……………………………….. 84
7.3 Results of the numerical simulation………………………… 85
7.3.1 Optimised values of endogenous variables………….. 85
7.3.2 Impact of the bonus specification……………………. 87
7.4 Evidence from research area………………………………… 88
7.5 Comparing water rights purchase and ground water use……. 89

8. CONCLUSIONS OF THE STUDY AND THE POLICY RELEVANCE OF
THE PROPOSED WATER RIGHTS MARKET IN THE CAUVERY BASIN
………………………………………………………………………… 90
8.1 Summary of the main findings………………………………. 90
8.1.1 Insights from the field research………………………. 90
8.1.2 Political pri