Irrigation water pricing policy and its effects on sustainability of table grape production in Spain
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In Spain, production of table grapes is located principally in two very and provinces of the Mediterranean region, which, although geographically close, have very distinct entrepreneurial behavior. The objective of this study was to determine the effects of availability and price of irrigation water on the sustainability of grape operations. First, shadow prices of irrigation water were obtained by applying compromise programming; calculations were performed for the current productive context, and another calculation was performed for the adoption of a series of technological improvements. Also, water demand curves were calculated to analyze the repercussions of applying an increasing tariff, such as that proposed by the current European Water Framework Directive. The results show that it is necessary to increase the technological level of the production phase to guarantee the sustainability of Spanish table grape production units. The most relevant improvements are changing surface irrigation for drip irrigation, perfecting the training structures, covering the fields with screens or plastic, introducing apirena varieties, and earlier harvesting. The resulting shadow prices for irrigation water are very high, indicating that in these production units water availability has a greater effect than price. However, the real prices the farmers could pay do not coincide with the shadow price but with that deducted from the demand curves, which were obtained by simulating the effects of implementing a water-pricing policy. For the farmer to obtain a minimal profit, even though the proposed technological improvements are adopted, the price could not surpass 0.6 epsilon m(-3) in the area with the least technology and 1.1 epsilon M-3 in that with the highest level of technology.