Abstract:
Continued progress in water resources development in the future will depend upon the utilization of the
existing irrigation potential. An irrigation tank is a small reservoir to catch and store water during rainy season
and use it for irrigation during dry season. They recharge groundwater, which is not only a major source of
drinking water for numerous rural and urban communities, but also serve as a supplementary source for tank
water. Due to the loss in tank storage capacities, wells have become an important source of supplementary
water. Since farmers initially use tank water for cultivation, the risk associated with getting adequate water,
especially late in the season, has encouraged farmers to use wells for supplemental irrigation particularly later in
the crop season. Since only a few farmers in the tank command area own wells, and there is a growing demand
for well water, the well owners in most cases act like local monopolists. The study was undertaken with the
objective to study the water market in the two districts of Tamil Nadu viz., Sivagangai and Coimbatore. Inverse
demand function, Output function and Cost function were used to study the monopolistic behavior of water
market. The profit maximizing levels of well yield, price of water and hours of pumping are 4.6meters, Rs10
and 8.6 hours, respectively. Well owners maximize profits from water sales when the water level in the well is
at about five meters and the price of pumping hour is Rs. 10 and this correspond to about nine hours of pumping
per day from the well. Currently they pump only four hours per day and the water level in the well is about eight
meter. Under these conditions, well water output can best be increased by having farmers install more wells and
increased competition. With more wells, the demand for water from each individual well will fall, resulting in a
lower well water price. Therefore there is a need to increase the number of wells in the tank command area in
the study area up to threshold level.
