Application of Hydro-Economic Model in Assessing Pricing Scenarios of Agricultural Water and Their Intersectoral Effects (Case Study: Irrigation Districts in Downstream of Zayandehrud Dam)

Investigation of the effects of irrigation water price changes is one of the primary economic measures in managing water demands in Iran. However, imposing any policy in this sector would result in inter-sectoral (economic, social and environmental) consequences. Identification of these consequences helps the water managers and authorities to find the optimum price for this valuable input. In this article, using the hydro-economic model, the current agricultural economic conditions within the six irrigation districts located in downstream of Zayandehrud Dam, Isfahan, Iran, was simulated for the base year of 2014-2015. Along with the optimal water allocation, effects of specific pricing scenarios in these irrigation districs on economic, social and environmental indices were then assessed. Results of the study revealed that effects of pricing scenarios (increasing the irrigation water price) have negative impacts on the farmers’ revenue, employment in agricultural sector and water consumption, and positive or fixed impacts on energy balance index. Finally, by considering the importance of intersectoral consequences of selected pricing scenarios, the existing water price (based on the stabilization of agricultural water price law) is selected as suitable water price in Nekoabad, Mahyar and Jarghooye, and Borkhar Irrigation Districs (225, 195 and 205 Rials/m3, respectively). Meanwhile, this important item (the economic value of water) was obtained as 3249, 3002 and 3438 Rials/m3 in Abshar, Rudasht and Traditional Irrigation Districts, respectively.