Water governance matters: Self-supplied versus collective irrigation services and their impact on technical efficiency and production in olive oil farming

This study examines the impact of irrigation water services in shaping the economic performance of olive farms, with particular attention to their effects on production variability and technical efficiency. Employing a stochastic frontier analysis, we evaluate how different modes of irrigation service provision (self-supplied versus collective) affect farm-level outcomes. The empirical analysis is based on 954 observations from the Farm Accountancy Data Network, covering olive farms in Apulia, Italy’s principal olive-producing region, over the 2016–2019 period. The findings point out that self-supplied irrigation is associated with lower variability in both output and technical efficiency, reflecting greater reliability of water service. Conversely, farms relying on collective irrigation services experience higher variability in technical efficiency. These results highlight the importance of targeted policy interventions aimed at enhancing the reliability of collective irrigation services, also integrating current water allocation mechanisms with pricing differentiation policy. • Irrigation service type significantly affects olive farm performance in Apulia. • Technical efficiency variability differs by irrigation service type. • Farms equipped with self-supplied service show the lowest production variability. • Collective systems show higher production variability likely due to reliability. • Self-supplied irrigation service type face lower climate-related production risks.