Economic analysis of groundwater market for irrigation in Karnataka

This paper mainly focused on economics of groundwater markets for irrigation in Karnataka. Results indicated that groundwater markets have not only improved groundwater access and enhanced income levels of farmers, but also increased irrigation costs due to reduced water table and high probability of well failure. Net return per acre inch of groundwater and net return per rupee of irrigation cost was high for water buying farmers followed by water selling farmers and control farmers. Multinomial logit results indicated that water buying and water selling decisions are being influenced by farm size, family size, land fragments, water cost and agricultural credit. Such information is crucial for the policy makers while framing policies towards groundwater markets.