Abstract for:Farmponds for Horticulture: Boon or Curse? Analysing Impact on Farm Profitability, Resource Sustainability and Social Welfare

Plastic lined farmpond, used to store groundwater for use in scarcity period, is currently a topic of much debate in Indian agriculture. Some regard it as a miracle drought-proofing tool which enables farmers to increase their income. Others consider it an unsustainable tool that allows some farmers to exploit a scarce resource at the cost of others. This paper offers a system dynamic analysis of farmponds in terms of their hydrological, economic and social impact. Farmers invest in farmponds in response to groundwater uncertainty and economic gain from shifting to water intensive high-value crops. As more farmers build new farmponds attracted by the success of the initial adopters and change their cropping pattern, groundwater extraction exacerbates causing further uncertainty in groundwater availability. The non-farmpond owners are particularly impacted pushing even more of them towards investing in farmponds. As this cycle continues, eventually even the farmpond owning farmers are impacted making everyone worse off compared to the initial state. The paper shows that it is unlikely that a desired state of equilibrium can be achieved without regulation because economic incentives continue to drive farmers to invest in farmponds even as groundwater levels fall thereby leading to the tragedy of the commons.