Sustainability of European Irrigated Agriculture under Water Framework Directive and Agenda 2000

THE SUSTAINABILITY OF EUROPEAN IRRIGATED AGRICULTURE
vulnerable areas, reporting and authorisation system, definition of resource protection areas,
discharge control, etc.). These measures also include the pricing provisions created to
encourage users to manage water better. Measures can be drawn up at national level.
If the provisions above are not sufficient to fulfil the objectives set, supplementary measures
must be implemented. The Directive provides a non-exclusive list of these. These either
strengthen the basic measures or take the form of new provisions such as codes of good
practice, voluntary agreements, economic and fiscal instruments, provision of information to
users, etc.
7. ANALYSIS OF KEY ECONOMIC ELEMENTS FOR COST RECOVERY OF WATER
SERVICES IN THE WATER FRAMEWORK DIRECTIVE
7.1. Introduction
Water management is a European Policy priority. At the same time, use of water and water
resources has been the focus of the European Union (EU) Water Policy since the 1960s. This
section reviews the key economic elements of the Water Framework Directive.
The classical microeconomic view of water pricing focuses on the profit maximization
assumption and input-derived analysis of demand. When water is treated like any other input,
this may not recognise the social impact of irrigation, i.e. its contribution to rural development
and employment in less favoured areas. On the environmental side, irrigation also helps to
maintain certain minimum levels of population in sensitive areas and thus helps to slow down the
progress of desertification in arid regions.
Some of these experiences can be found in OECD (1999), and research on Spanish cases can be
found in Berbel and Gómez-Limón (2000) and Feijoó et al. (2000). These authors all argue that
price increases force farmers to change their cropping patterns in the direction of less waterintensive
crops, some of them heavily subsidised by the CAP, as opposed to labour-intensive
irrigated crops. They also conclude that elasticity effects should be taken into consideration,
finding that responses to price increases may only produce significant water savings when price
is already severely affecting farmers’ incomes.
It is also worth mentioning that two other domestic policies related to irrigation water have been
recently approved in Spain, namely the creation of water markets (Water Act, 1999) and the
modernisation of irrigation systems (National Irrigation Plan, 2001). Both measures, which are
being implemented in order to improve the efficiency of water use, are due to be complemented
by strengthened administrative rules. Nevertheless, this paper s focuses only on the two
European policies indicated above. We might also mention measures taken by other EU
members that have also reformed legislation involved in water management in agriculture, such
as Italy; ‘Decree 152/99 sulle acque’, that also anticipate Directive 60/2000.
7.2. Economic analysis of WFD
The inventory document will provide economic data on water usage. Under Article 9, waterpricing
methods and investment funding methods are described, and application of the
principle of recovery of the costs of water services reported on.
This economic analysis due for 2004 must be focused on valuation of water use, forecasting
supply and demand for water and general cost inventory.
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