| 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. |
