Estimating the demand for irrigation water in a humid climate: A case study from the southeastern United States

The southeastern United States typically receives more than 130 cm of precipitation per year. In this region, as in others around the world, irrigation is used as a supplement to rainfall. Over the past thirty years the number of hectares under irrigation in the region has grown considerably, as has population. Policy makers are currently searching for effective tools to address water demand. This study tests the effect of water costs, crop prices and technology on the multiple crop production decision using supplemental irrigation. Results for Georgia row crop producers indicate water demand is modestly affected by water price (with elasticities between −0.01 and −0.17), but more so by crop price (with elasticities between 0.5 and 0.82). Results also suggest adoption of lower pressure irrigation systems does not necessarily lead to lower water application rates on corn, cotton, peanuts, and soybeans.