Regional blending of fresh and saline irrigation water: Is it efficient?

Blending fresh and saline irrigation waters is implemented in many countries facing water scarcity. However, when analyzed at the field level, previous economic studies have indicated that blending fresh and saline water is suboptimal. This paper examines the blending issue on a regional scale, where both water sources and land are concurrently allocated to crops. Regional water distribution networks that enable salinity adjustment at the field level are compared to networks that allow controlling water salinity on a regional scale only, such that salt concentrations cannot differ by crop. We characterize the conditions for blending to be an optimal strategy under regional salinity control networks, and show that these conditions can be met by an empirical water production model commonly used in the literature. Empirical analysis of 16 regions in Israel revealed optimal blending in six of them. However, regardless of whether blending is optimal or not, the optimal fresh-water application is higher under regional salinity control networks, implying that blending does not support freshwater conservation. The paper analyzes the relationship between water and land constraints' shadow values, and the properties of the two water distribution networks. We show that although farming revenues are higher under networks that allow assignment of specific water salinities to crops, regional salinity control networks can become more profitable to farmers who face prices set endogenously so as to be the binding factor on the use of constrained water and land. The implications of the network selection on intraregional water supply costs are discussed.