Estimated Demand and Economic Value of Water in Production of Forage Sorghum in Sistan

Reform of pricing system based on the economic value of water in agriculture is one of the most efficient tools of demand management which leads to set the pattern of water used ..The aim of this study is the to determine the economic value of agricultural water using production function approach for sorghum in Sistan area in 2015.To determine the economic value of water, flexible and inflexible functions were used. Based on the results, a Cobb-Douglas function was selected to estimate water demand. The price elasticity of derived demand water was 2.25 which showed that price policy could be an important factor in the control of non-optimum use of water. Final production efficiency was 0.3 and economic value of water was 450 Rials per cubic meter of water which was 44.5 percent less than current water charges. Therefore, it was suggested that by gradually eliminating the difference in prices, the value of water would be closer to its price.