Value of Water in Agriculture: A Comparative Analysis of Water Scarce and a

If the balance between availability and requirement drives the value, then the economic value of water in agriculture should be remarkably higher in water-scarce regions when compared to water-rich regions. Similarly, in water-abundant regions, if the land is scarce, then the incremental return per unit of land should be higher than that in land-rich region that are water-scarce. These hypotheses are tested by comparing the situation in western Punjab, which is land-rich and naturally water scarce and eastern Uttar Pradesh which is land-scarce and water-rich. The methodology used for assessing the economic value of water considered estimating the incremental value of output for a composite farming system from a unit of irrigation water used. The incremental value of farm output was estimated on the basis of the volume-based weighted average of the water productivity values (Rs./m3) in various agricultural crops and milk production. The total effective volume of water used for various crops and milk production were estimated using physical productivity of water in various crops and milk production (kg/m3), and the weight of outputs in the respective crops and milk. The regression analysis shows that every extra unit of water diverted for agriculture generates more economic surplus in western Punjab. Regression of land against economic surplus shows that every extra unit of land put under cultivation generates more economic surplus in eastern Uttar Pradesh when compared to wester