Last updated November 2007
Groundwater irrigation has increased dramatically in several developing countries over the last two decades, leading to a significant expansion in agricultural production but also to alarming declines in water tables. Governments have also actively designed schemes to increase irrigation among poor farmers through public provision of groundwater. This paper evaluates the effects of one such scheme on groundwater use in northern India. A priori, one would expect that increased access would accelerate water depletion. But contrary to this hypothesis, I find evidence that the program decreased total use of groundwater. To explain this result, I develop a simple model of the choice farmers face between sinking private wells, using public water, or farming without groundwater irrigation. The model shows that public provision of groundwater expands access to groundwater resources for smaller farmers and reduces groundwater usage among larger farmers. Public provision of water reduces total ground water usage when the fixed costs of well provision are high, price exceeds marginal cost of private well provision, and the land distribution is sufficiently long-tailed. Using village-level longitudinal data on wells and aquifer depth from the Indian Census of Minor Irrigation, I analyze the predictions of the model in a differences-in-differences framework. Consistent with the predictions, I find that there is a significant jump in the water-saving effects of the scheme at the water table depth at which the fixed costs of water provision rise substantially due to the physical limitations of surface pumps.