Impacts of groundwater markets on agriculture and determinants of participation: a case study in hard rock areas of India

This article analyses the impacts of groundwater markets on agriculture in the hard rock areas of India. It also examines the decisions to buy and sell water. Water markets have improved resource-poor farmers’ access to groundwater and enhanced their income level, but these have also increased irrigation costs by lowering the water table and raising the proportion of well failures. The government subsidizes drip irrigation to encourage farmers to save water and reduce its scarcity, but farmers are using the subsidy to irrigate a larger area and sell their neighbours water. The subsidy programme has not adequately addressed the real problem. The decision to buy and sell water is influenced by farm and family size, land fragment, water cost and agricultural credit. Such information is crucial for framing groundwater policy.