Water and Fertilizer Efficiency in Rice Production Case Study: Krishna River Basin, India

Rice production in India is facing potential shortages in the future, and this may be due to various factors including water and labor shortages, growing populations, and a slowing rate of technical progress. Although rice is a water-intensive crop, water productivity in rice production is especially low. Stresses on water supply, including the potential impact of climate change, suggest a growing need for economic policies that enable increases in water efficiency levels in rice production. Fertilizers are used as a temporary solution in India to maintain increasing rates of production levels. The primary goals of this paper are twofold: first, to assess the current level of water and fertilizer inefficiency using a stochastic production frontier model for the study region in the Krishna River Basin of India; and second, to analyze and discuss the potential increase in water efficiency as a result of volumetric water pricing schemes.