Answer

India’s agricultural water crisis is not just a problem of scarcity but a result of policies that incentivize unsustainable practices. Subsidies on electricity, fertilizers, and crops like rice and sugarcane encourage over-extraction of groundwater and inefficient irrigation methods. Addressing these misaligned incentives is key to ensuring sustainable water management in agriculture.

How current subsidy regime perpetuates unsustainable water use

• MSPs for thirsty crops: Guaranteed minimum support prices make rice and sugarcane more profitable than dryland alternatives.
  Example: Even with Haryana’s ₹ 5,000/acre incentive under “Mera Pani Meri Virasat,” paddy net returns (₹ 100,000/acre) dwarf bajra (₹ 20,000/acre).
• Input subsidies on power and fertilizers: Subsidised electricity and fertilizer encourage over-irrigation and intensive cropping.
• Assured procurement risk‐mitigation: Knowing the state will buy paddy reduces farmer reluctance to switch crops.
  Example: During bumper paddy harvests, government purchases absorb excess, reinforcing rice cultivation.
• Uniform electricity tariffs: No tiered pricing means heavy users pay the same flat rate as light users, removing conservation incentives.
  Example: A marginal unit of groundwater pumped costs nothing extra, so deep aquifers get drained.
• Isolated individual incentives: Schemes target solo farmers without addressing spillovers from neighbors’ cultivation.
  Example: Even villages with bajra adopters see water levels fall if adjacent fields remain under paddy.

Broader reasons behind India’s agricultural water crisis

• Distorted crop incentives: Support policies skew farmer choices toward water-intensive rice and sugarcane, which together consume over 60 % of irrigated water.
  Example: Despite 80 % of freshwater used by agriculture, rice and sugarcane backed by MSPs and assured procurement absorb the lion’s share of it.
• Tragedy of the commons: Groundwater is a shared resource; individual over‐extraction goes unchecked, leading to aquifer depletion.
  Example: Nearly 70% wells in Punjab 130 out of 186 have registered varying degree of fall in water level, in some cases by more than four metres
• Legacy of the Green Revolution: Early success in food self-sufficiency cemented heavy irrigation practices and high‐yield varieties that demand flooding.
  Example: Basmati PB 1121 yields soared, driving farmers to continue paddy cultivation despite falling water tables.
• Institutional fragmentation: Multiple agencies manage water, power and agriculture with little coordination, preventing integrated water governance.
  Example: State electricity boards subsidize pumping, while irrigation departments plan canals, but neither tracks net extraction.
• Lack of pricing signals: Flat-rate or free electricity severs the link between water use and cost, removing incentives to conserve

Way forward

• Village-level conditional subsidies: Release benefits only when 60–70 % of farmers in a hydrological unit diversify crops together.
• Tiered electricity pricing: Introduce rising block tariffs or prepaid metering so excessive pumping incurs real costs.
• Water-use rights and trading: Allocate volumetric entitlements and allow farmers to trade them, fostering conservation among high-value users.
  Example: Maharashtra’s watershed projects issue water credits, traded locally to balance scarce supplies.
• Hydrological zoning and cooperative governance: Form farmer groups at aquifer or canal‐command scale to manage cropping patterns.
  Example: Participatory Guarantee Mechanism in organic farming shows that peer monitoring boosts compliance and trust.
• Calibrated cash incentives: Link payments to the full opportunity cost of switching, pegged to local crop profitability data.
  Example: Incentives for bajra could be adjusted annually to match PB 1121 profit margins, making diversification economically viable.

To resolve India’s agricultural water crisis, subsidy reforms must prioritize efficient water use and sustainable farming practices. Policies promoting micro-irrigation, crop diversification, and water pricing can realign incentives. A collaborative approach involving farmers, policymakers, and technology will ensure long-term water security and agricultural resilience.

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