4. Conclusion

We have shown here how it is possible with a pricing system based on two variables, reservation and consumption, for the WUA manager to get enough information in order to anticipate any disequilibrium between water demand and supply, when it is always possible to change the choice of the cultures. Moreover changing the parameters allows the WUA manager to modify the volume consumed by the farmers, which is especially useful when searching a decrease of the water consumption. Translated in a two-entry table, this method is simple enough to be understood by each farmer and quite acceptable since associating the pursuit of fairness, efficiency, and adaptability.

At last, with a judicious choice of the value for the parameters, it is possible to incite the farmers to be more or less acute in the choice of their reservation and consumption values. This pricing system should therefore allow a more efficient use of the water resource by the farmers, by the way decreasing the constraints on other economic sectors and on the environment.

The need for a better management of irrigation water is now recognized, and the potentialities of original pricing systems (see, for example, [22]) are confirmed by many work in economics, carried out in different contexts such as those presented by [23] in semi-arid climates, or [24], and [25] in different European countries.

Further researches are nevertheless needed to study how such a system keeps or increases its advantages when we take into account the fact that in many countries the water supply may be stochastic (see, for example, [26]). It would also be important to study the strategic interactions between farmers, as well as the different inter-annual dynamics that can be put in place, in order to facilitate the development of agricultural activities, while still under budgetary constraint (see [27]). In addition, the acquisition of information between the reservation (during the wet vegetation season) and the peak consumption (during the dry vegetation season) can be sequential. Taking this into account can lead to an even better valorization of the water resources, through the implementation of an adapted pricing policy. This leads to other refinements which are the aim of other present researches.

### Acknowledgements

We thank especially the financial help the European Union H2020 COASTAL project (Grant Agreement No. 773782) and of French Agence Nationale pour la Recherche program" Agriculture et développement durable" allocated to the" Appeau" contract. We thank too Jean-Marc Berland and Jean-Antoine Faby from the International Office for Water for interesting discussions on a preliminary version of this paper. We also thank Laboratoire Montpelliérain d'Economie Théorique et Appliquée (Lameta), now Center for Environmental Economics - Montpellier (CEEM), for allowing us to have previously made available the working paper on which this chapter is partially based (see [28]).

Author details

41

Jean-Philippe Terreaux<sup>1</sup>

1 UR ETBX, Irstea, Cestas, France

provided the original work is properly cited.

\* and Mabel Tidball<sup>2</sup>

Can Nonlinear Water Pricing Help to Mitigate Drought Effects in Temperate Countries?

DOI: http://dx.doi.org/10.5772/intechopen.86529

\*Address all correspondence to: jean-philippe.terreaux@irstea.fr

2 CEE-M, University of Montpellier, CNRS, Inra, SupAgro, Montpellier, France

© 2019 The Author(s). Licensee IntechOpen. This chapter is distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/ by/3.0), which permits unrestricted use, distribution, and reproduction in any medium,

### Conflict of interest

The authors declare that there is no conflict of interest.

Can Nonlinear Water Pricing Help to Mitigate Drought Effects in Temperate Countries? DOI: http://dx.doi.org/10.5772/intechopen.86529
