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GTAP Resource #1515

"Where has all the Water gone? Estimation of Agricultural Production Functions in Khorezm, Uzbekistan "
by Mueller, Marc

The paper summarized here has basically two objectives. The first is to address a problem widely known in agricultural economics, especially in the case of developing countries: Despite the importance of agriculture for many regional and national economies and the related ecological systems are input-output relationships often poorly recorded. With the exception of allocated areas is it hardly possible to assess information about quantities of water, labor, or fertilizer used for the different crops in an agricultural production system. This situation is aggravated in the presence of substantial governmental interventions, when both input and output markets are distorted and behavioral patterns of agricultural producers do not follow common assumptions such as profit maximization. Consequently is it at least difficult to analyze efficiency and productivity of input usages or derive recommendations for more sustainable consumption of resources. This issue is addressed by employing a 'maximum entropy' (ME) approach in order to estimate a quadratic production function on the basis of aggregated input data for the region Khorezm in Uzbekistan. Regularity conditions are imposed locally; the functions for all outputs are interlinked by the assumption that marginal rates of substitution have to be equal.
To quantify the allocation of water for the different crops in this region and to gain information about possibilities to reduce the water demand is the second objective of this paper. Khorezm is a region of interest because of the reliance of the regional economy on agriculture and the supply of irrigation water from the river Amu Darya. This supply became increasingly scarce since the mid-nineties and it is likely that the situation will deteriorate due to the recovering of crop production in more up-stream located countries, such as Afghanistan.
A set of factors determining the ability of the agricultural system in Khorezm to adapt to changes in the availability has already been identified. Most important among those are the governmental regulations concerning the production of main crops like cotton, wheat, and rice, the persistence of structures inherited from the former Soviet Union, the lack of advanced irrigation technology and the fact, that irrigation water is free of charge.
The analyses performed in this paper contribute to this discussion by estimating crop-specific input usages and marginal rates of substitution between the main inputs water, land, physical capital and labor. The results correspond with theoretical implications, although no assumptions about the ratios of input-prices were made.

Resource Details (Export Citation) GTAP Keywords
Category: 2004 Conference Paper
Status: Published
By/In: Presented at the 7th Annual Conference on Global Economic Analysis, Washington DC, USA
Date: 2004
Created: Mueller, M. (5/2/2004)
Updated: Mueller, M. (5/3/2004)
Visits: 1,497
No keywords have been specified.

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