The Economic Value of Irrigation Water, Cropping Pattern, and Farmer Gross Margin Under Drought Conditions: The case of the Qazvin plain

Document Type: Research Paper

Authors

1 Assistant Professor, Office of Economic Affairs, Agricultural Research, Education and Extension Organization (AREEO), Tehran, Iran

2 Ph.D. student of Agricultural Policy and Development, Payame Noor University, Tehran, Iran,

10.22111/jhe.2019.5420

Abstract

Water is a necessary but scarce input among the inputs used for crop production, so determining its economic value can be a good instrument to improve its management. In this respect, the present study aims to determine the economic value of irrigation water under drought conditions and to propose a cropping pattern and estimate farmer gross margin in the Qazvin plain in Iran using linear programming and positive mathematical programming (PMP) models. The statistical data were of the document type for the 2013-2014 growing season. The results showed that the economic value of irrigation water is 1,161 IRR/m3 whereas farmers pay 417 IRR/m3 as the water price. Also, the economic value of irrigation water is 1,152 IRR/m3 in the base year, which increases by 12.2-94.1 percent to 1293-2236 IRR/m3 under the scenarios of water limitation by 10-50 percent. In these conditions, farmers tend to reduce the acreage of sugar beet and sunflower and increase the acreage of irrigated wheat and barley. This will reduce farmers’ gross margin. This reduction of gross return is maximized when the costs of coping with drought and production costs are maximal. So, timely informing of farmers before the occurrence of drought and holding training courses about methods to counteract the negative consequences of this climatic phenomenon by governmental agencies, such as Jihad-e Agriculture Organization and research and educational centers, can be helpful in supporting farmers and officials in their attempts to cope with the consequences of drought. Determining the economic value of irrigation water across the region and accepting a reasonable price as water price by farmers can lead to a considerable saving of this scarce input in the region. So, it is recommended to price irrigation water in accordance with its economic value and the consideration of its equivalence.

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