Farmers’ willingness to pay for irrigation water: Empirical study of public irrigated area in a context of groundwater depletion

Abstract

There was strong support for irrigation water pricing as an indicator of water shortage and opportunity cost in conceiving the development. The purpose of the paper is to assess the willingness to pay (WTP) for irrigation supply improvements and to investigate factors that affect it. Data was collected among 90 farmers in the North of Tunisia interviewed face to face. Contingent valuation technique was adopted. A qualitative dependent variable model (logit) was used. Empirical results showed that water users might accept moderate increase of water prices in order to get better water supply service. The average WTP was of 245 millimes (0.08 US$). Comparing to actual practiced price of 150 millimes/m3 the farmers accept to pay on average 63.3% more than the price currently paid. The willingness to pay is strongly affectedby agricultural training and education level of farmers. It is proved too that corruption and free riding behaviour reduce significantly the farmers’ willingness to pay for groundwater.