Abstract:
In this study, irrigation-induced salinity is analysed through a dynamic model. In the model, all the farmers in two neighboring Water User Associations (WUAs), which are managed independently, contribute to the accumulation of a common groundwater. However, by assumption, they are asymmetrically affected by the rising watertable due to the slope in the region. Since each farmer’s benefit function depends on not only his own irrigation parcatices, but also the groundwater accumulation, there are strategic interactions among all the farmers. We use differential games as the methodology and the open-loop Nash equilibrium as the solution concept. We analyse the model under four different scenarios. We show that even when each farmer moves in cooperation with other member farmers in his/her own WUA, socially optimal level of groundwater accumulation cannot be reached. Under these conditions, two different input taxes based on the level of groundwater accumulation are offered to each type of farmers to induce them to take sustainable irrigation decisions.
