The Economics of Water-Efficient Agriculture: Tackling Scarcity with Innovation

Abstract

Lack of water is a major challenge to irrigated agriculture, food security and rural livelihoods across the globe. This paper assesses the economic costs of implementing water-efficient technologies in the agricultural sector, such as drip irrigation, rainwater harvesting and soil moisture management. Based on case studies and pilot projects in the water-deficit areas, this work defines the cost reduction potential, the main limitations and possible directions for the development of these technologies. The study also shows that water usage decreased by half and crop yields increased by 20-30 %; thus, the program achieves both economic and resource savings. However, there are barriers, such as high capital investment costs and low knowledge among farmers about how to adopt it completely. To this end, this research outlines policy actions, funding strategies, and capacity development measures that would help create the necessary framework to enhance the uptake of water-saving irrigation and sustainable agriculture as well as optimally manage water resources for better crop production.