Irrigation pricing policy aimed at the enhancement of water saving innovation at farm level. A case study.

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