University Times

BRADFORD — Liquid assets have been the focus of Shailendra Gajanan’s recent work. The Pitt-Bradford economics professor spent two months this summer researching the role government policy has played in water depletion in India.

In his native Chennai, water security has become a prime issue — the area’s population has exploded and urbanization has put pressure on drinking water supplies. “Natural resources are being depleted, as we all know,” said Gajanan, noting that water supply issues are not limited to India but are a growing concern in China, Latin America and some parts of the United States as well.

Water is a politically loaded subject across the world — one that can manifest itself in bizarre ways, he said.

In Chennai, he said, water has become a political issue. In order to be elected, politicians need to satisfy city dwellers’ water needs. At the same time, depletion of water for agricultural use is occurring and politicians also rely on the farmers’ vote.

In his recent research, Gajanan and two colleagues from Presidency College in Tamil Nadu, India, documented a case in which the government’s provision of free electricity has played a role in groundwater depletion.

The research, “Strategic Democracy and Water Depletion: A Case-Study From Tamil Nadu Farmers,” will be a chapter in the upcoming book “Welfare Economics,” edited by Paul E. Weston and Robert N. Townsend.

Gajanan views the water situation as an instance of “the tragedy of the commons” principle with a political twist.

The economics principle derives its name from the case of a common pasture on which a number of shepherds graze their sheep. Each has the incentive to graze more sheep on the land to increase personal gain, eventually overusing the common land until its value is reduced, then destroyed.

“Typically we say free markets fail because people exploit the commons,” Gajanan said, citing overfishing as one present-day example. Somebody has to price the commons to bring equilibrium before all the users suffer the consequences, he said.

In their research, Gajanan and colleagues noted that politicians can serve their own purposes by providing the people free and open access to the commons, but such a short-term view is unsustainable.

While some economists believe the market will take care of itself, others say government controls are needed. “Here we are seeing government servants not controlling it properly and creating additional problems,” Gajanan said.

He noted that the principles behind the depletion of resources are the same as those behind America’s rising national debt — successive presidential administrations added to the debt and left the problem for their successors, essentially passing it on to the next generation. “The same psychology takes place,” he said.

In Tamil Nadu, politicians consistently reduced the price of electricity from the state-run power system, finally giving farmers free electricity in the 1990s.

The result: Farmers took advantage of the deal by installing electric pumps. They soon began using more and more water, quickly depleting the water supply and leading to a decrease in water quality.

Large farmers, who can afford to buy the biggest pumps, are getting richer, Gajanan said. Some of them, in addition to or even instead of farming, are pumping and delivering the water to city residents — a faster, easier way to make money than waiting for crops to produce. “Small farmers cannot do this, but the larger ones can,” he said.

In their research examining the impact of free electricity on the water supply, Gajanan and his colleagues surveyed 450 farmers and found that growers not only added wells but dug deeper ones. The farmers also added more powerful pumps and ran them for longer periods and increasingly opted to grow more water-intensive crops.

“The incentive to over-extract water is the most obvious strategy for any farmer,” the researchers wrote. “Consequently, as water runs out, farmers increase the depth of their wells. … However, water levels continue to deplete as rapidly as the depth of the wells increase.”

The researchers found that the area irrigated by wells rose significantly between 1990 and 2000, but by 2003, irrigated area from all sources, including wells, had decreased. “This is the fallout of open access to water, wherein over-extraction of an exhaustible resource is the unique equilibrium solution,” they concluded.

Because power reliability is perceived as a problem and voltage fluctuations damage equipment, the researchers also asked farmers whether they would be willing to pay for a hypothetical package of electricity that would be more reliable.

Interestingly, those with medium-size and large farms, who operated most of the strongest pumps, were less interested in such an option than those who ran small and marginal-sized farms.

“Given the number of wells, and electric pumps run by large farmers, their massive unwillingness to contribute to the social good underscores the importance of urgent public action,” the researchers stated.

To alleviate the water problems, Gajanan said that the government must provide rewards for developing aquifers and encourage farmers not to “harvest” water. Conservation strategies and protection of wetlands from urbanization also are needed, he said.

—Kimberly K. Barlow