Question

Answer 2 of the following questions and relate your answers with other students’ answers when appropriate: 1. In California, farmers pay a lower price for water than do city residents. What is this method of allocation of water resources? Is this allocation of water efficient? Is this use of scarce water fair? Why or why not? 2. If farmers were charged the same price as city residents pay, how would the price of agricultural produce, the quantity of produce grown, consumer surplus, and producer surplus change? 3. New Zealand’s private forests In the early 1990s, the government auctioned half the national forests, converting these forests from public ownership to private ownership. The government’s decision was an incentive to get the owners to operate like farmers—that is, take care of the resource and to use it to make a profit. Source: Reuters, September 7, 2007 Was the timber industry efficient before the auction and did logging companies operate in the social interest or self-interest? What effect has private ownership had on efficiency of the timber industry?

Answer 1

1. The method of water resource allocation in california is 'Intricate system of common law principles, constitutional provisions, State and federal statutes, court decisions, and contracts or agreements'. All these tools consitute the institutional framework aims at the protection of public interests and their balance with private claims in California’s water allocation and management.

This is very effiecient method as it put significant limitation on water rights by prohibiting the waste, unreasonable use, unreasonable method of use, or unreasonable method of diversion of water.

this method is having fair means of use the scarce water resources as it has following features:

a). The State retains continuing supervisory control over its navigable waters and the lands beneath them. This prevents any party from acquiring a vested right to appropriate water in a manner harmful to the uses protected by the public trust. The State Water Resources Control Board may reconsider past water allocation decisions in light of current knowledge and current needs.

b). As a practical matter, it will be necessary for the State to grant usufructuary licenses to allow appropriation of water for uses outside the stream, even though this taking may unavoidably harm the trust uses of the source stream.

c). The State has an affirmative duty to take the public trust into account in the planning and allocation of water resources, and to protect public trust uses whenever feasible.

2) If farmers were charged the same price as city residents pay, then the cost burden on the famers for cropping will rise, which altimatly affect the quantity of produce grown and to cover increased burden and low production make addition in the price of the agriculture produce. with the rise in price consumer and producer surplus will both reduce.

3) With the govenment auction program of forest in New Zealand in early 1900's, the effiency of the timber industry negatively grown even though its profitablity increases but on cost of sustainablity of the forests, the land lost about 75% of the indegenous forest cover as with private ownership maori followed by europeans settlments the large areas were cleared for pastoral farming and logging industry. Woodchip industry which became the main cause of forest clearance on private land.

By the years govt. realised the impact and to protect the enviorment the exporting of woodchip stops frinn the indegeneous forests by the govrenment inn 1996. and it was ordered that the native forests must replanted with fast growing species as 'Pinus Radiata'