With the enforcement of the Water Framework Directive 2000/60/EC (WFD), policy makers are required to pursue the improvement of the use efficiency of the water resources in the agricultural sector. For this purpose, we suggest a methodology to perform an ex-ante analysis of the efficiency of water pricing policies, based on a two stage DEA technique, by which it is possible to disaggregate the technical and the ecological efficiency of the policy. According to our results, we found that, coherently with the WFD principles, the direct pricing methods show the highest levels of efficiency. However, we have also found that some indirect pricing methods show relatively high levels of efficiency. Therefore, since the high cost for the management and implementation of water measurement devices required to apply the volumetric methods, indirect pricing methods might still be preferable.

SUMMARY - In this study we analyze the price inducement effect of a generalized water tariff increase in the adoption of water saving innovation at farm level. We apply a linear programming decision making model to analyze the determinants affecting the adoption of two types of innovation: a process innovation, consisting on a crop mulching practice, and a management innovation, based on a voluntary water seasonal pricing scheme, differentiated according to a peak and off-peak periods. According to our results, the mulching practice is not affected by the tariffs that are still lower than the water marginal productivity, while they exert a negative effect when they become higher. On the contrary, the adoption of the voluntary water seasonal pricing scheme is affected by the tariffs increase only if the latter induce an excessive concentration of water demand during the peak.