Economics of groundwater sustainability: Modeling Incentives for Groundwater-Fed Irrigation in West Africa

Many areas in Sub-Saharan Africa face substantial food security concerns amidst uncertain future crop yield variability. Unexploited rechargeable groundwater resources could be used to stabilize and increase agricultural production through irrigation. To assess economic and environmental viability and impacts, we build a hydro-economic modeling framework to explore sustainable irrigation expansion fed by groundwater. The modeling framework simulates farmer profits under various upscaling and climate scenarios. We apply a nexus approach by incorporating groundwater dynamics and recharge, energy requirements for pumping, endogenous technology choice, and food production. This framework captures trade-offs and feedbacks among water extraction, energy consumption, and agricultural output under future climate conditions. The combination of biophysical models for yields and groundwater, as well as economic modeling for farmer revenues and costs, provides detailed insights into the impacts of multiple irrigation upscaling options. Because irrigation technologies are capital-intensive, they often need economic incentives. We therefore assess the impacts and returns of multiple subsidies and other policies that reduce farmers’ private costs for pumps and irrigation infrastructure. The modeling results show how farmers’ economic profit maximization under future conditions affects crop choices, caloric content of food production, irrigation water use, groundwater dynamics, and agricultural labor. Preliminary results from an application of the framework to three potential upscaling areas in West African Niger indicate substantial potential for sustainable expansion of groundwater irrigation. Multiple policy options support the uptake of groundwater pumping by bridging the high initial investment costs for farmers while delivering an overall positive return on investment, increased revenues from crop production that exceed government expenditure, and enhanced food system resilience.