Journal of Forest Economics > Vol 29 > Issue 1

Social welfare losses from groundwater over-extraction for small-scale agriculture in Sri Lanka: Environmental concern for land use

Wasantha Athukorala, Department of Economics and Statistics, Faculty of Arts, University of Peradeniya, Sri Lanka, wathukorala@yahoo.com Clevo Wilson, School of Economics and Finance, QUT Business School, Queensland University of Technology, Australia, clevo.wilson@qut.edu.au Shunsuke Managi, Urban Institute & Department of Urban and Environmental Engineering, Faculty of Engineering, Kyushu University, Japan, managi.s@gmail.com
 
Suggested Citation
Wasantha Athukorala, Clevo Wilson and Shunsuke Managi (2017), "Social welfare losses from groundwater over-extraction for small-scale agriculture in Sri Lanka: Environmental concern for land use", Journal of Forest Economics: Vol. 29: No. 1, pp 47-55. http://dx.doi.org/10.1016/j.jfe.2017.04.002

Published: 0/12/2017
© 0 2017 Wasantha Athukorala, Clevo Wilson, Shunsuke Managi
 
Subjects
 
Keywords
GroundwaterQuantity and quality deteriorationOnion productionSri Lanka
 

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In this article:
Introduction
Literature review of groundwater extraction costs
Groundwater quality problems
Empirical results: the social costs due to groundwater extraction for agricultural production
Conclusions and policy implications

Abstract

Quantity depletion and quality deterioration issues arising from the extraction of groundwater have been discussed in previous studies. However, the literature reveals no systematic analysis of the possible social welfare losses due to the cost of both quantity depletion and quality deterioration. This paper therefore investigates the long run welfare cost of using groundwater for agriculture by including both quantity depletion and quality deterioration costs simultaneously. This is achieved through an empirical study of onion farmers in Sri Lanka who use groundwater for their cultivation. A significant social welfare loss is found in terms of both groundwater quantity and quality deterioration costs and which is likely to increase over the long run. This is shown to have important long run implications for land use management.

DOI:10.1016/j.jfe.2017.04.002