Socioeconomic significance

In these predominantly agrarian regions of South Asia, the booming groundwater economies have assumed growing significance from viewpoints of livelihood and food security; however, their significance as engines of rural and regional economic growth has remained understudied. There are several ways to consider the scale of the groundwater economy; but one practical measure is the economic value of the groundwater production. An unpublished report for the United States Agency for International Development (USAID) in the early 1990s placed the contribution of groundwater irrigation to India's gross domestic product (GDP) at around 10% (Daines and Pawar, 1987); if the same proportion holds now, the size of the groundwater irrigation economy of India would be approximately $50-55 billion. In Table 2.1, we attempt a rough estimation of the market value of groundwater use in the Indian subcontinent. India, Pakistan and Bangladesh have active markets in pump irrigation service in which tube well owners sell groundwater irrigation to their neighbours at a price that exceeds their marginal cost of pumping. This price offers a market valuation of groundwater use in irrigation. We have used available estimates of the number of irrigation wells and estimates from sample surveys on average yield of wells and annual hours of operation of irrigation tube wells in the

Table 2.1. Proximate size of the agricultural groundwater economy of South Asia and the North China Plain (2002).

Pakistan Nepal

Table 2.1. Proximate size of the agricultural groundwater economy of South Asia and the North China Plain (2002).

Pakistan Nepal

India

Punjab

Bangladesh

Terai

A

Number of wells (million)

21

0.5

0.8

0.06

B

Average output/well (m3/h)

25-27

1 00

30

30

C

Average hours of operation/

360

1090

1300

205

well/year

D

Price of pump irrigation ($/h)

1-1.1

2

1.5

1.5

E

Groundwater used (km3)

189-204

54.5

31.2

0.37

F

Value of groundwater used per

7.6-8.3

1.1

1.6

0.02

year in billion dollars year in billion dollars countries covered. In India, for instance, a large number of farmers paid their neighbouring bore well owners $0.04/m3 for purchased groundwater irrigation in around 2 0 003; applying this price to the annual groundwater use of say 200 billion cubic metres gives us $8 billion as the economic value of groundwater used in Indian agriculture per year. For the Indian subcontinent as a whole, the corresponding estimate is around $10 billion. In many parts of water-scarce India, water buyers commonly enter into pump irrigation contracts offering as much as one-third of their crop share to the irrigation service provider; in water-abundant areas, in contrast, purchased pump irrigation cost amounts generally to 15-18% of the gross value of the output it supports. This can be used to draw the general inference that the agricultural output that groundwater irrigation supports is 4-5 times its market value.

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