Journal of Global Resources
Volume 4
ISSN: 2395-3160 (Print), 2455-2445 (Online)

January 2017

Page 29-35

4
AN ECONOMIC ANALYSIS OF GROUNDWATER DEVELOPMENT VIS-À-VIS
RESOURCE USE EFFICIENCY IN TANK COMMAND AREAS
Venkatesh Gurusamy
Assistant Professor, J.K.K. Munirajah College of Agricultural Science, Erode, India
Email: venil2@hotmail.com
K. Mani
Professor and Head, Department of Agricultural Economics,
Tamil Nadu Agricultural University, Coimbatore, India
Ravikumar Teodore
Professor, Department of Agricultural Extension,
Tamil Nadu Agricultural University, Coimbatore, India
G. Asokan
Dean, J.K.K. Munirajah College of Agricultural Science, Erode, India
Abstract: In the study area, the majority of farmers (75 per cent) are cultivating rice in tankcommand areas. Among the rice growers 27 per cent of them have raised rice with tankwater alone while the rest applied both tank water and well water. The analysis was done fortwo situations i) tank water alone and ii) tank cum well water application. The total cost of
rice cultivation was Rs.16016.00 per hectare using only tank water and the total cost of ricecultivation was Rs.24628.00 per hectare in tank cum well water situation. The Mean
Technical Efficiency (MTE) was calculated to be 0.3996 for tank water using farmers. It
indicated that the technical efficiency of rice farmers were only 39.96 per cent and yield ofrice could be increased by 60.04 per cent more by adopting a technically efficient plan
without any increase in cost. The Mean Technical Efficiency (MTE) was calculated to be
0.6248 for tank cum well water users. It indicated that technical efficiency of rice farmers was
only 62.48 per cent and yield of rice could be increased by 37.52 per cent more by adopting
a technically efficient plan without any increase in cost.
Key words: Technical Inefficiency, Tank Command Areas, Tank Water Irrigation, Irrigation.
Introduction
The important factor in agricultural development in India is going to be efficient use ofavailable water resources for crop production. The increasing need for crop production due
to growing population led to the rapid expansion of irrigation throughout the world. The major
sources of irrigation in India are tanks, canals and wells. The tanks have existed in India
from time immemorial, and have been an important source of irrigation, particularly, in South
India where it accounts for about one-third of the rice irrigated area. (Palanisami et al.,2001). The recent estimate places the actual number of tanks in Tamil Nadu at 34,000, theremaining 5,000 plus has just disappeared over the past 15 years, so because of a variety ofreasons during the 1980’s, for example, the area irrigated by tanks in Tamil Nadu as aproportion of total irrigated declined from 33 per cent to 26 per cent; and the share of wellirrigated areas has increased from 34 per cent to 41 per cent (PRADAN, 1996). The
groundwater in agriculture production give enhanced yields as alone or if combined with tankwater as supplementary irrigation, which was less than 6 Million Hectares in 1959-60, went
up to 18 Million hectares in 1999-2000. Also, the share of ground water in total irrigated area
increased from 30 per cent in 1960-61 to 58.77 per cent 1999-2000. The area under groundwater is increasing progressively as this is the most reliable and cost-effective source of
irrigation. (Joshi, 2002). Though there are several studies on tank irrigation and its problems,29studies on groundwater development and resource use efficiency of rice in tank commandareas are limited. However, in this paper we attempt to study the resource use efficiency inrice cultivation and returns to supplemental irrigation in tank command areas. In particular,
we employ the stochastic frontier production techniques to measure technical efficiency ofrice.
Methodology
The measurement of efficiency was the main motivation for the study of frontier. The
technical efficiency literature begins with Farrell (1957), employed a deterministic approachin which he estimated a cost frontier by using linear programming (LP), requiring all
observations to lie on or above the frontier. Aigner and Chu (1968) translated Farrell’s cost
frontier into a production frontier, since outlier observations under a deterministic approachseriously affect the problem, by using a probabilistic frontier function. Then, Timmer’s (1971)
approach yields a frontier, which is probabilistic rather than deterministic or stochastic. Later
Aigner et al., (1977) developed a stochastic frontier model and key feature of the model wasthat the disturbance term is composed of two parts, one symmetric and the other ‘one-sided’.
A (linear) stochastic frontier model is specified as Y=f(X1, X2 …Xn) + (v ± u); v is thesymmetric error component causing the deterministic part of the production frontier f(X1,
X2…Xn) to vary across the firms. Technical efficiency relative to the stochastic production
frontier is captured by the one-sided error component (± depending on whether one specifies
a production or cost frontier), u≥0.
Direct estimates of the stochastic production function frontier model may be obtainedby maximum likelihood estimator (MLE) method. In this study MLE method is used toestimate (as was used by Olsen et al., (1980): and Banik Arindam (1994)). Measurement oftechnical efficiency has been attempted across crops such as Rice (e.g. Kalirajan & Shand
1994; Mythili & Shanmugam 2000); tea (e.g. Hazarika & Subramanian 1999); rice, groundnut
and cotton (Shanmugam 2003); and coffee, orange, banana and pepper (e.g. Venkatesh etal., 2005).
Data Model and Variables used in the Study
The study area was Sivaganga District, which is situated in southern region of Tamil Nadu
has more number of tanks purposefully selected for sampling. Multi-stage Stratified Random
sampling was employed. (Stage I) Sivaganga Taluk was chosen and four tanks of Public
Works Department (PWD) management and two of under Panchayat Union (PU)
maintenance (Stage II). So, six villages are benefited by the chosen tanks, namely Namanur,
Kovanur, Panaiur, Mudikondon, Valuthani and Salur. Twenty farmers from each of thementioned villages were randomly selected for sampling (Stage III). On the total 120
respondents were interviewed. Rice was the major cereal crop in this district. Therefore, rice
crop was chosen for further analysis. The survey was conducted during the year 2002-2003.
Cobb-Douglas production function was used to estimate the resource use efficiency.
Y = bo X1b1X2b2X3b3X4b4X5b5U
Where, Y = Rice yield in quintals per hectare
X1 = Area under rice in hectare
X2 = Fertilizer applied (NPK kgs/ hectare)
X3 = Labour man days/ hectare
X4 = Expenditure on bullock, machinery power, seeds and pesticides (Rs/ hectare)
X5 = Irrigation (hectare cm.,)bo= Interceptbi= 1,2,3,4, and 5 are production elasticity.
U= Error term
Result and Discussion
The total sampling size was 120 and around 100 were cultivating rice in tank commandareas. The rest of them having other crops and hence resource use efficiency has been
restricted for rice crop alone. Among the rice growers, 27 per cent of farmers have raised
30

rice with tank water alone while the rest applied both tank and well water. The CobbDouglas production function was estimated as specified for rice growers with tank water
alone as well as tank water plus well water and the results are presented in Table 1.
Table 1: Cobb-Douglas Production Function for Farms using Tank Water alone andTank cum Well Water
Estimated partial regression co-efficientParticulars
Tank water
Tank cum well water
Constant
5.4868 (10.2229)
5.6996 (6.2736)
Area under rice (ha.)
6.0359* (1.3542)
2.5984* (0.6899)
Fertilizer (NPK kg/ha.)
0.1090 (0.0398)
0.0934 (0.0189)
Labour man-days (ha.)
0.2045 (0.1731)
0.1324 (0.173)
Other expenditure (Rs/ha.)0.0019 (0.0007)
0.0007** (0.0003)
Quantum of water used in tank0.0393* (0.0454)
0.0289 (0.130)
irrigation (ha cm.,)
Quantum of water used in wellNA
0.2762* (0.0906)
irrigation (ha cm.,)
N
27
73
R2
0.897*
0.778*
Figures in parentheses indicate standard errors* Significant at 5 % and ** 1% level of probability
Other expenditure is expenditure on bullock, machine power, seeds and pesticides
Rice growers using tank water alone, the coefficient of multiple determinations was
0.897 which indicated that 89 per cent of variation in rice yield has been attributed by the
independent variables included in the function and the function was significant at one percent probability level. Among the independent variables included in the production function
area under rice, and quantity of tank water for irrigation had significantly influenced rice
yield at one per cent probability level. The partial regression coefficients revealed thatelasticity of production for area under rice was 6.039 and 0.0393 for tank water application
respectively.
The production function estimated for rice growers applying both tank water andwell water revealed that 77.80 per cent variation in rice yield was explained by independent
variables included in the function and it was a significant at one per cent probability level.
Among the explanatory variables included, the area under rice cultivation and well water
application significantly influenced the rice yield at one per cent probability level while theother expenditures significantly influenced the rice yield at five per cent probability level.
This showed that the availability of well water had encouraged the farmers to spend more
on seed, pesticides and machineries. The estimated partial regression coefficients showed
the elasticity of production due to land; well water application and other expenditures wererespectively 2.598, 0.276 and 0.0007.
The elasticity of production indicated that quantum of tank water, quantum of well
water and other expenditures spent on seed, pesticides and machineries were less than
one and were operating in the second zone of production. On the other hand, the elasticity
of production for area under rice was more than one for both tank water users and tank andwell water users. This showed that there is scope for increasing rice production throughexpansion of area in Sivaganga district provided the water is made available either in-sittu
conditions or water application deliberately and crop management methods.
Resource use Efficiency of Rice Growers
Resource use efficiency of rice growers have been worked out for the resources which hadsignificantly influenced the rice yield (Table 2). The ratio of Value of Marginal Product (VMP)of resource to their price indicated that for rice growers using only tank water for irrigation,
31

the land resource is over utilized whereas there is scope for further increase in use quantumof tank water. The ratio of VMP of resources to their price estimated for farmers using tankcum well also indicated the over utilization of land and other expenditures which money
spent on seed, pesticides and machineries whereas underutilization of well water.
Table 2: Resource use Efficiency of Rice Growers
A. Tank water alone
VMP
Px
Land
273.801500*
Tank Irrigation
32.17
4
B. Tank cum well waterLand
122.471500*
Well Irrigation
159.92
15
Other expenditures
829.42
912.0

VMP/Px
0.18
8.04
0.08
10.66
0.91

* Rental value of land was taken as the priceMarginal product=Elasticity*Average product. VMP valued at output price of rice

Maximum Likelihood Estimator Method for Production Function for Farms using
Tank Water alone and Tank cum Well Water
It could be seen from the Table 3 that the estimated discrepancy parameter (θ) was 0.9703
and 0.9521 for only tank water and tank cum well water application respectively. This impliedthat deviation in the output from the frontier yield was mainly due to technical inefficiency at
the farmers’ level. The Mean Technical Efficiency was 0.3996 and 0.6248 respectively fortank water alone and tank cum well water applying farms. This implied that yield was 60 per
cent less than the maximum possible output in tank water using rice growers and 38 per centin tank cum well water using rice growers respectively. The low technical efficiency was due
to inadequate water during crop period in the former category. Besides uncertainty in rainfall
and poor filling of tanks had led to these problems.
Table 3: Maximum Likelihood Estimator Method for Production Function for Farms
Using Tank Water alone and Tank cum Well Water
Estimated partial regression coefficients
Particulars
Only tank water for
Tank cum well water for
irrigation
irrigation
Constant
6.5177(7.1483)
6.2553 (4.7527)
Area under paddy (ha.)
4.9367* (1.1734)
2.6494** (1.1245)
Fertilizer (NPK kg/ha.)
0.1035 (0.0246)
0.0604* (0.0156)
Labour man days/ha.
0.1126** (0.0578)
0.0232**(0.0093)
Other expenditure (Rs/ha.)
0.0009 (0.0007)
0.0013* (0.0005)
Quantum of water used in tank0.0429* (0.0129)
0.0304 (0.0689)
irrigation (ha cm.,)
Quantum of water used in wellNA
0.6742* (0.1603)
irrigation (ha cm.,)
1.7776
0.6788σ2u
20.05440.0342σv
5.71534.4559λ=σu / σv
22
20.97030.9521
θ=σ u/ (σ u +σ v)
0.39960.6248
MTE=1- σu√2/πFigures in parentheses indicate standard errors* 1% level of significant level and ** 5% level of significant level
Other expenditure is amount of expenditure spent on bullock power, machine power, seeds and pesticides

Technical Efficiencies of Rice Growers
The distribution of rice growing farmers based on the technical efficiency is furnished inTable 4. In majority,15 rice growers (55.6 per cent) are using tank water alone were32

operating at 50-60 per cent technical efficiency level, on the contrary, 38 rice growers (52.1
per cent) in tank cum well water situation, were operating at 70-80 per cent technicalefficiency, and 80-90 per cent technical efficiency attained by 15.1 per cent of farmers. We
conclude that is very large scope to improve the technical efficiency of rice farmers in boththe situation, because water resources are underutilized.

#
1
2
3
4
5
6
7

Table 4: Technical Efficiencies of Rice Producing Farmers
Tank cum well waterTechnical efficiency of
Only tank water using
using farmers (inRice growers
farmers (in numbers)
numbers)<40
2 (7.4)40-50
8 (29.6)
50-60
15 (55.6)
4 (5.5)60-70
2 (7.4)20 (27.4)
70-80
38 (52.1)
80-90
11 (15.1)
90-100Total
27 (100.0)
73 (100.0)

Figures in parentheses indicate percentage

Returns to Supplemental Irrigation
The supplemental irrigation became necessary when the tank water was not available for theentire rice growing period. When the rice growers could not supplement well water with tankwater, they had to either harvest reduced yields or in several cases they had to abandon
their entire standing crops. Thus, all the expenses incurred for the crop cultivation could not
be recovered. The demand for supplemental irrigation depends upon the variety andduration of the crop and the yield depends on the number of supplemental irrigation
provided. In the tanks chosen for the present study, the rainfall received during the year 20022003 was less than the normal rainfall and hence water required for tank filling was less than full
capacity. Therefore, supplemental irrigation with well water played a vital role in obtaining
increased rice yield.
Mean Irrigation Water Applied by Different Rice Growers
The quantum tank water used for irrigation by rice growers was 25.70 ha cm. and 23.24 hacm. of tank water and 50.95 ha cm of well water used in tank cum well water using rice
growers. They applied 50.95 ha cm. of well water over and above the tank water. Generally,
farmers using tank water alone cultivated semi-dry rice varieties like PMK1, PMK2, MDU5,
IR20, IR36, ADT36, ADT39, ADT43 and CO43.
Mean Irrigation Water Used By Sellers and Buyers
From table 5, farmers sold 19.67 ha cm. of tank water and 53.53 ha cm. of well water
respectively to rice crop. On the other hand the well water buyers applied 16.94 ha cm. oftank water and 43.78 ha cm. of well water to rice crop and own users were applied 21.86 hacm. of tank water and 53.44 ha cm of well water to rice crop. The total water applied by well
water buyers were 60.72 ha cm less than the well water sellers.
Table 5: Mean Irrigation Water used by Sellers and Buyers
Groundwater
Number of
Tank water
Well waterusers
farmers(ha.cm.)(ha.cm.)Sellers
16
19.67
53.53
Buyers
18
16.94
43.78
Own users
39
21.86
53.44

Total
(ha.cm.)
73.20
60.72
42.77

Source: Field survey data using questionnaire, 2003

Comparison of Well Owners with Non-Well Owners
It could be seen from the Table 6 that the rice yield obtained with supplemental irrigation (5003kg) was more than farmers using only tank water (3511 kg). Availability of well water for33

supplementing tank water enhanced the use of other inputs like fertilizers, labour man-days andplant protection chemicals.
Table 6: Comparison of Well Owners with Non-Well Owners
Variables
Tank cum well water
Well water
Total water applied (ha/cm,)

74.19

2.7

Lobour man-days/ha

197.3

170.7

Fertilizer (NPK kg/ha)

282

217

Other expenditure (Rs/ha)

5742

4865

Rice yield (kg/ ha)

5003

3511

Rice yield (kg/ha cm.,)

67.54

136.62

Source: Field survey data using questionnaire, 2003

Rice yield per unit quantity of water was the highest at 136.62 kg per ha cm. forfarmers using only tank water. Whereas it was lower at 67.54 kg per ha cm. for farmers
supplementing tank water with well water.
Average Returns to Supplemental Irrigation
It could be seen from the Table 8 that without supplemental irrigation yield of rice obtained
as low as 2437 kg per hectare. As the number of supplemental irrigation increased the rice
yield up to 10-12 supplemental irrigations and then declined. Likewise the average net returnfrom rice cultivation has increased until 10-12 supplemental irrigations. The estimates ofreturns per supplemental irrigation applied were the highest for 10-12 supplemental
irrigation.
Table 7: Average Returns to the Supplemental Irrigation#

Number of
supplemental
irrigations

Well water
Applied(ha cm.,)Rice yield(kg/ha)Grossreturn(Rs/ha)Net return(Rs/ha)Averagereturn perirrigation
(Rs)

1

0

-

2438

12,188

2,737

-

2

2-4

8-16

3250

14,200

3,750

338

3

4-6

16-32

3737

16,489

4,929

438

4

6-8

32-48

4062

18,500

6,380

520

5

8-10

48-54

4875

21,457

7,806

563

6

10-12

54-60

5688

23,789

9,268

594

7

12-14

61-76

5119

24,7009,911

552

Source: Field survey data using questionnaire, 2003

Conclusion
Area under rice occupied 75 per cent of Gross Cropped Area in tank command areas. Only
27 farmers irrigated by tank water for rice cultivation while the rest used well water as
supplemental irrigation. Inadequate tank water cause increase in groundwater market wherein there were 16 water sellers, 18 buyers and 39 own users of well water for crop cultivation.
The yield was significantly influenced by area and tank water irrigation in the tank water
alone situation and the yield was significantly influenced by area, well water and expenditureon bullock, machine power, seeds and plant protection chemicals in tank cum well waterusing farms. In farms using only tank water, among the variables land and tank irrigation,
significantly influenced the rice yield, area under rice was over utilized while the tankirrigation was underutilized. The variables, other expenditures and area under rice were
under utilized in farms using tank cum well water situation while, well irrigation was overutilized. The technical efficiency analysis showed that 60 per cent less than maximum
34

possible output was achieved in tank water alone using farms and 38 per cent less thanmaximum possible output in tank cum well water using farms. Grouping of farmers based on
efficiency showed 55.6 per cent of farmers operated at 50-60 per cent efficiency level in tankwater alone situation. On the other hand, 52 per cent of farmer’s efficiency operated at theefficiency between 70 and 80 per cent category. Average returns increased up to 10-12
supplemental well irrigation and decreased thereafter. Average returns increased from
Rs.337.67 to Rs.593.73 using supplemental irrigation.
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