Valuation of Under Ground Water Exploitation of Agricultural Case Study of Wheat Farmers in Khatam City

Iran with an annual average rainfall of 250 mm is faced with the problem of dehydration and nonuniform distribution of water resources. Scarcity of water on the one hand, and the enormous costs on the other hand, is considered productivity and economic value of water as one of the most important national goal. Consumption of Water in agricultural sector includes about 90 percent of the country´s water consumption, so the economic value of water in agriculture is one of the most important priorities in water resources management. In this study the economic value of water based on basic function of social welfare for wheet producers in Yazd (Heart - khatam) was analyzed. Required data and information has been obtained from 100 questionnaires using two-stage cluster sampling in 1387.Based on these information social welfare function has been estimated via Eviews 5 software. The results show the existence of decreasing return to scale for wheet production in the region.The marginal productivity of production factors , water, labor and pesticides respectively 1/4, 65 and 1113 kg per unit. Also producers are willing to sacrifice to 0/228 unit and 0/0067 unit of water to obtion and use one additional unit of labor and pesticides. The value of Marginal productivity of factors price ration water, labor and pesticides has been estimated respectively 0/0049, 0/0005 and 0/0159 Actual economic value of water , 12,593 Rials, differes significantly from current value 277/4 Rials) in region which leads to excessive withdrawal of groundwater in the region. The shadow price of labor and pesticides are 604,500 and 10,350,900 Rials respectively. Price and income elasticity of demend water for has been estimated 15/33 and 45/329 respectively.