Water Tariffs in Agriculture: Emilia Romagna Case Study

The chapter presents changes in the irrigation tariff system of the irrigation district Tarabina, in the Emilia Romagna Region, Italy. In order to improve the management of the irrigation water resources (distribution of water and related costs), in 2006 the users voluntarily replaced the area-based payment (a fi nancial instrument) with a volumetric tariff (EPI) and introduced a set of formal rules. In the following years, a reduction in water use at district level has been observed. Such an outcome has aroused a particular interest in studying the contribution of the volumetric tariff, intended as an EPI, on the reduction of water use. The capability of such an EPI in reducing the amount of water used in agriculture would strengthen the policy intentions of the EU of implementing measures that induce a more effi - cient use of water resources. Based on a counterfactual analysis, it has been found that the introduction of the volumetric tariff induced a reduction, on average, of about 50 % of the water used for irrigation along with a reduction of about 70 % of the costs for the non-irrigators. Such fi ndings suggest that EPIs, associated to other instruments, such as site-specifi c regulations, might improve their effectiveness and pursue multiple policy goals.