A dynamic model of irrigation and land-use choice: Application to the Beauce aquifer in France

Abstract

We set up a model of land-use and irrigation water choices to assess the impact of dry weather conditions and possible restriction policies on farmers' payoffs in the Beauce area in France. Given the informational context, we construct a dynamic two-period model in which farmers make conjectures on the water abstraction by other users and take into account variations in the height of the water table. We solve the problem using dynamic programming. We simulate different restriction policies, proposed in the literature and tested in the field. We show that these restrictions, although efficient with respect to hydrological criteria, result in serious economic losses for the farmers.