Economic perspectives on groundwater conservation: Insights from farmers in western Uttar Pradesh, India

Abstract

Groundwater management for irrigation is a critical area of research, particularly in developing economies like India where agriculture is heavily dependent on this resource. In India, groundwater is governed by the rule of capture, such that groundwater beneath an individual's land is treated as a private resource. This open-access nature leads to overexploitation and presents significant challenges for effective regulation. The present study seeks to assess the farmers' preferences for groundwater management alternatives and their marginal willingness to pay (MWTP) for sustaining the groundwater resources. Employing the contingent ranking method and rank-ordered logit model, the analysis is based on primary data from 300 farm households in Western Uttar Pradesh, India. Findings show that farmers prefer the groundwater management alternative of metered private tube wells, despite its higher cost, because their MWTP for this attribute is the highest. This suggests a strong preference for maintaining private rights to groundwater extraction while supporting sustainability through per-unit consumption charge. Farmers exhibit a significant MWTP of INR 1718 (USD 20.48) annually for the non-use benefits of groundwater. While this WTP may seem modest compared to the intrinsic value of groundwater's non-use benefits, it marks a critical step toward organised groundwater governance. Furthermore, farmer characteristics—such as education level and landholding size—significantly influence their preferences for various groundwater management attributes. These findings underscore the importance of policy interventions that incorporate economic incentives alongside conservation goals to address the ongoing groundwater depletion in agrarian economies like India.