Since 1991, India has been undertaking a process of liberalisation of the agricultural sector. This process threatens to affect the irrigation patterns by introducing a system of payment for the electricity used for pumping, but it may prevent the wastage of the water resource. In this paper, a mathematical model is used to simulate farmers' reactions to different water policy scenarios in Haryana and analyse their impact on the agricultural production, the rural livelihood and the water resource. This policy could have a low impact on the public expenditure, but it will hinder farmers' income, increase the agricultural risk, and affect rural consumption, without improving the conservation of the water resource. To prevent unfair impacts on the farmers' pockets, a policy of pricing water would require rates to be 'adjusted' according to the categories of the farmers.