Free Water

Country News of mmgnetwork posted a journal article titled “Temporary water price drops” written by Sophie Burns. The article explains the effects of decrease in price for temporary water that has given opportunities for things to occur. For example the rice and dairy farmers are beginning to increase, due to the lower price of water. The reason for this is because water is at an affordable price; that helps the farmers purchase more water to help increase their supply. In addition to the increase supply, the profits will also increase since more of the product can be produce, this leads to a lower overall selling price.

After reading the article, it occurred to me this can be linked to the chapter 13 of the book “Environmental Principles and Policies – Quotas, Trades, Offsets, and Banks.” In the introduction of the chapter it illustrates the idea that every resource must have a price set. Without a price resources can be used freely and abused with no risk to them; whoever is able to obtain the resource first will have the most. However when a price is placed on the resource can be easily controlled and managed to prevent exploitation.

I agree with the books ideas; yes it may be true if a certain resource if not controlled will be abused to the point where there is no more. But in special cases they can be seen as beneficial but it has its limitations, here is a scenario:
Take the same scenario of the rice and dairy farmers and provide them a free source of water. This would allow them to increase their own profits by producing more resources to sell. Using those profits, they are able to purchase modern technology to help them efficiently make they’re crops. Since farmers are already poor relative to other jobs with the amount of work, this would be very beneficial. However this is nowhere near possible since the water can be abused by the farmer easily. The water would not be distributed evenly; perhaps it could drain the fertile soil of its fertility, and erode the soil. It’s a possibility that this will occur if the farmer is given free source of water.

The emphasis the book is trying to make is that when a resource is placed with a price tag, it is not so profits are made. But a way of allocating the resources so they do not deplete. This is the incentive to check with ourselves if we really need the resource. The definition of value in economic terms is: something has value when the willingness to pay is present, when the willingness to pay is not then it has no value. If something has no value to us (buyer) we wouldn’t want to spend large quantities of money on it. Overall the idea of using economics to allocate our resources is a great method to sustain our resources.

Reference:

Burns, Sophie. "Temporary Water Price Drops." Country News - McPherson Media Group. Web. 24 Nov. 2009. .

Beder, Sharon. Environmental Principles and Policies An Interdisciplinary Introduction. Minneapolis: Earthscan Publications Ltd., 2006. Print.