Demand-based water allocation in irrigation systems using mechanism design: A case study from Pakistan

Global climate change has effected the snow covers and precipitation patterns leading to unreliable surface water availability for agricultural usage. Many studies suggest that demand based surface water management instead of supply based management may significantly mitigate the problem of supply-side fluctuations. Such management schemes have now been brought to the forefront due to the recent advances in information and communication technologies (ICTs). In the absence of a demand based water distribution mechanism in the Indus basin irrigation network, inequity and unreliability feature prominently. This research contributes to addressing these problems by proposing a demand-driven allocation scheme for surface water coupled with an auction-based pricing mechanism. We compare the proposed scheme with the currently practiced water distribution mechanism in IBIS (Indus Basin Irrigation system) by conducting a pilot study whose site is located in central Punjab, Pakistan. Our simulations suggest that under certain realistic assumptions, the proposed mechanism leads to a more efficient allocation of surface water, resulting in lower exploitation of groundwater resources and potentially higher agricultural yield due to improved water availability.