Any discussion of demand-driven water pricing is fraught with political sensibilities. Complain to farmers about inefficient irrigation practices, and they point to the state for not doing enough to build reservoirs or recharge aquifers. Farming community stands in unison against any fee for groundwater abstraction, as access to fresh water sources is considered a god-given right.
But the reality is that groundwater is not a public good. While colonial era laws entitle landholders to groundwater abstraction without any restriction, water abstraction is an inherently unfair business. Theoretically, the consumer with the most powerful tube-well in the village can withdraw any quantity of water as long as he is willing to pay the cost of electricity; surely, tube-wells don’t respect land demarcations drawn by the village patwari.
Thus, by its very nature, groundwater abstraction results in winners and losers; as only the tube-well owner profits from the produce of the farm. Moreover, over-abstraction causes residue water-tables to drop further, driving up the cost of any future abstraction.
So, what steps can any government take to address the perverse incentives of water economy, considering that the political classes are beholden to the electorally important farming lobby? As increasing abiana pricing may not be politically convenient, provincial governments should consider targeted revenue collection from tube-well owing landholders. Restrictions could also be imposed on tube-well ownership based on number and electric power.
While increasing the price of water abstraction would surely impact food prices in the short-term, research indicates that this will create positive incentives for farmers to improve productivity in the long term. It is no surprise that Pakistan has one of the lowest crop-productivity in the world. Globally, groundwater use is generally associated with cultivating high-value cash such as oilseeds, vegetables and fruits. In contrast, farmers in Pakistan use groundwater for low yield crops such as wheat, rice and sugarcane.
Pakistan has much to learn from Mediterranean economies which sow high value crops such as peppers and tomatoes, which have groundwater productivity of up to $5.52 per cubic meters, compared to grains such as corn, sunflower, and cereals, whose groundwater productivity is estimated at as low as $0.28 per cubic meter of water use.
By increasing the cost of groundwater abstraction and consumption, Pakistani agriculturalists can be driven towards cultivation of high yield crops that in long term could lead to higher farming income and, possibly, even improve value earned from crops exports. Given Pakistan’s looming water crisis, food security has become a poor excuse for continued cultivation of water-thirsty commodities that the country would be better off importing.