Modelling the hydrological externalities of agriculture in wetlands: The case of rice in Esteros del Iberà, Argentina

The conversion of wetlands to alternative uses, or land uses that affect either water levels or water quality, have profound implications for the ecological and hydrological services wetlands provide. This study considers the hydrological externalities of agricultural production in one freshwater wetland: the Esteros del Iberà in north-eastern Argentina. Two externalities are considered. First, an international hydroelectric power project, the Yacyretà dam, has significantly increased the extent of the Iberà wetland and will continue to do so over the next decade. This has negatively affected the production of rice. Second, production of rice positively affects the area of the wetland. Further increases in water levels in Iberà are expected to induce a reallocation of rice production within the region and in particular within the wetland. The paper models the externality and estimates the costs involved.