Groundwater markets under the water scarcity and declining watertable conditions: the upland Balochistan region of Pakistan

The study documents comprehensive analysis on informal groundwater marketing in upland Balochistan, Pakistan. Informal groundwater markets are emerging as a feasible option to manage increasing water scarcity and declining water tables resulting from poor groundwater policies. Firstly, we evaluated the groundwater trading mechanism; we then examined factors affecting the groundwater trading using empirical data and logit econometric models. We did not observe any permanent groundwater transactions; only temporary groundwater exchange takes place. Two common transactions methods were noted - water in exchange for a given crop share and cash payment at a flat rate per hour. In all, 60% of respondents reported selling water in exchange for a crop share. This form of transaction intensifies as we move from high altitude areas to low altitude areas where water and land are relatively abundant. In general, crop sharing rates were 33% of crop output. Water trading in the form of cash transactions was practiced by 40% of respondents. The charge per hour also varied with altitude, with average prices of Rs. 100,(1) Rs. 112, and Rs. 205 per hour reported at low, medium and high altitudes, respectively. The increase in this form of water marketing as we move from low to high altitude areas is mainly in response to relatively scarce water and land in high altitude areas. The results of empirical models indicates that among others, cropping intensity, area under high value fruits, decline in watertable, tubewell reliability, alternate source of irrigation, and soil quality are important variables influencing water buying and selling decisions. Importantly, personal attributes such as kinships, age, and education were also found to be important factors affecting water buying and selling decisions. In upland Balochistan, the water markets appears to provide a cushion against increasing water scarcity by averting risk to high value horticultural crops and enhancing water use efficiency, as it helps overcome the problem of over irrigation or misuse of water by facilitating the sale of surplus or extra water and more sparing and efficient use of purchased water. It is envisaged that groundwater markets will continue to plays a key role in sustaining high value crops and will continue to make a significant contribution in upland Balochistan. (C) 2011 Elsevier Ltd. All rights reserved.