Hydrologic-economic modeling of irrigated agriculture in the Lower Murrumbidgee Catchment : investigations into sustainability

Abstract

Increasing water scarcity and growing demand for food have made better management of land and water resources essential to maintaining the sustainability of irrigated agriculture. Policies designed to improve environmental quality and irrigated production need to be analyzed in an integrated framework. We present a catchment-scale hydrologic-economic model of irrigated agriculture which is dynamic and spatially distributed. It can be used to evaluate land and water policies designed to manage irrigation-induced salinization. The model incorporates hydrologically realistic representations of groundwater flow and soil salinization into an economic optimization framework. The sum of discounted net revenues from irrigation over the planning horizon is maximized by choosing annual areas planted to each crop in each of the economic subregions. The groundwater system is represented using a linear state-space model derived from a finite-difference approximation of the groundwater flow equation. The number of groundwater states is substantially reduced using balanced truncation, a technique used in control engineering. A simple representation of the salinization process is derived from detailed numerical simulations of unsaturated zone flow and salt transport. These detailed simulations include realistic meterological forcing, crop root extraction, and the effect of shallow, saline watertables. The use of the model for policy analysis is demonstrated in a case study of the Lower Murrumbidgee Catchment. The study area is in the Murray-Darling Basin of Australia and includes a major irrigation district threatened by salinization from rising watertables. We first simulate socially optimal management over a 15-year planning horizon. The socially optimal solution internalizes the externalities of the common-pool groundwater system and allows redistribution of water allocations to different areas. This solution is compared to scenarios which include the common-pool externality and policy options in various combinations. The policy options considered are a restriction on the amount of cropland planted to rice and the trading of surface water allocations. We find the rice area restriction decreases economic net benefits while water trading increases net benefits. There is little difference between the social optimum and the common-pool scenarios suggesting that the cost of the common-pool externality is small.