The Economics of Irrigation in Almond Orchards. Application to Southern Spain

This paper offers an exploratory microeconomic analysis of water use in the cultivation of almonds when water is considered a limiting production factor. When a crop is subjected to water limitation, the microeconomic principles behind irrigation decisions are based upon the water-yield relationship. The analysis is applied to an estimated water-yield response function for irrigated almond trees in southern Spain; our research focuses on determining the optimal irrigation dose when deficit irrigation is applied, as it is usual in water-scarce contexts. The situation in Spain is compared to that of other countries where water rights are less constrained. The economic analysis of the water production function is crucial, since it determines farmers’ income and helps them make appropriate management decisions, such as simultaneous decisions regarding the allocation of limited water to crops and the size of the irrigated area for almond production. Furthermore, public institutions need this basic information for the allocation of water in times of increasing water demand and of limited and decreasing resources.