The economic value of guaranteed water supply for irrigation under scarcity conditions

We assess the value farmers place on the guarantee of water supply, in the context of water scarcity and we identify the factors that characterise heterogeneity in valuations across respondents. We use a contingent valuation survey approach to elicit farmers’ willingness to pay (WTP) for secured water supply for irrigation in the South of Spain (Guadalbullon River within the Guadalquivir River Basin). We find that farmers are willing to increase by 10% and 20% their current irrigators’ community annual payment and, moreover, they are willing to reduce average supply by 30% of their administrative water concession, to increase their water supply guarantee. These results confirm that when water is scarce, farmers have non-market values associated with an increased guarantee, in addition to direct use for supplied water. This suggests that farmers perceive benefits in this change as their welfare increases, providing evidence of the predisposition to measures or strategies that permit such improvement.

► Valuation scenarios for measuring farmers WTP for increased guarantee of water supply are successfully tested.
► Farmers derive a significant value from the increase of the guarantee of water supply and sensitivity to scope is confirmed.
► Factors as agricultural training or household size, among others, affect the value of WTP.
► Farmers have non-market values associated with increased guarantee in addition to direct use for supplied water.
► Pre-requisite for introducing flexible water allocation mechanisms (e.g. water markets) are presented.