LAUSR

Abstract In this paper, we modeled water trading in southern Alberta by incorporating irrigation technologies and crop choices. We consider six irrigation technologies and twelve crops with a variation in land quality to examine the adoption gains from water trading. The results are summarized to account for the gains from water trading and the probability of farmers switching to efficient irrigation technologies to cultivate profitable crops. Simulation results suggest that famers are more likely to follow rational adoption approach in using the gain from water trading to adopt efficient irrigation technologies. This is more likely to occur when the net gain is higher than the cost of adopting an irrigation technology. However, sensitivity analysis shows that high crop price regimes and provision of subsidies on the impact of water trading on technology adoptions could encourage farmers to adopt improved irrigation technologies to produce profitable crops. Effective policies to provide incentives to farmers to adopt efficient irrigation technologies and to improve crop yields may be necessary for the study area.