What Socio-Technical and Institutional Determinants Explain the Farm-Level Economic Divergence?

Abstract

This paper aims to investigate the multifaceted factors influencing agricultural farm productivity and test the hypothesis that participation in Water Users Association (WUA) activities contributes to improved farm productivity. Primary data was collected from the Sindh and Punjab provinces of Pakistan, and hierarchical regression analysis was employed to assess the statistical significance of different variable blocks. The findings reveal that farm productivity (measured in Rs/Acre) is primarily influenced by water and land resource characteristics (54%), followed by personal characteristics of resource users (7.9%) and community and institutional characteristics (1.1%). The study identifies a negative relationship between landholding size and age with farm productivity, while a positive relationship is observed between resource users' level of participation in WUAs and farm productivity. However, it is important to note that these positive outcomes should not solely be attributed to the success of devolution of irrigation management, as inequities in canal water allocation between head and tail still persist. The paper emphasizes the critical role of participatory irrigation management governance in addressing such inequities. The results further suggest that meaningful institutional and land reforms are essential for promoting equitable economic benefits in agricultural systems.