Effect of Forecast-Based Pricing on Irrigated Agriculture: A Simulation

In this study, an adaptive groundwater pricing model utilizing operational seasonal climate forecasts was evaluated for groundwater management. The price for groundwater in the upcoming season was selected according to an algorithm that incorporates the current groundwater elevation and a prediction of seasonal rainfall. A simulation based on 37 years of rainfall data and operational monsoon forecasts for Tamil Nadu, India, was conducted to assess the effect of forecast-based pricing on societal benefits, groundwater elevation, and farmer income.