The Effects of Regional Water Markets Formation on Balancing the Supply and Demand of Irrigation Water in the Sistan Region

The regional water markets as economic instruments, promote the development of decentralization and optimal allocation of water resources among farmers. For this purpose, in present study the formation effects of regional water markets in Sistan region were investigated and the potential of irrigation water transfer under stress irrigation conditions in region were analyzed. For this purpose, from the economic- hydrologic modeling system comprising of positive mathematical programming (PMP) model and with constant elasticity of substitution (CES) production function approach was used. The data and information required in this research are cross-sectional and related to the 2015-2016 crops which were collected by referring to the relevant authorities in Sistan region. The presented economic- hydrologic modeling system in the GAMS 24.7 software was solved. The results showed that with establishment of the regional water markets in Sistan region; in addition, creation the balance between supply and demand of irrigation water and equilibrate the water trading between the studied regions, increases the acrage of wheat and barley and decreases the acrage of alfalfa, onion, watermelon and melon relative to the lack of water market conditions. This result provides the possibility of lands development up to 23.4 percent compared to the base year conditions. The farmers’ total net profits of Sistan are improving under conditions of establishment of regional water markets also and changes from 22039 to 23242 million rials.