Evaluation of the financial efficiency of farmers involving the economic value of water

since the agricultural sector in IRAN is the largest consumer of water resources , it is important to determine the economic value and financial efficiency of farmers as an economic good. The purpose of this paper is to determine the economic value of water and financial efficiency of farmers in Khondab plain, Markazi Province of IRAN. In this study, the performance of four crops including wheat, barley, alfalfa and corn were calculated, involving a newly developed mathematical model. The average price of agricultural water has been determined using three weighting methods based on the volume of water, the cultivated area and the income, for each plant. Among these method the method based on volume of water, has selected as the most appropriate method. Financial efficiency for the all three modes, free water, 10% of the calculated price and the actual price of water from the farmer were calculated. Results show that financial efficiency is sensitive to changes in income and it is more sensitive that changes in costs. Irrigation efficiency and financial efficiency are not similar in all cases.