Comment on Market Approach in Agricultural Water Management

Water management in arid and semi arid regions is of great importance. Population growth and increased demand for food in Iran, in one hand, climate change, reduction of rainfall, and recent decades of draught on the other hand, resulted in limited water resources and reduction in water supply. Optimization of water resources allocation is very crucial and some experts considered the water market as a tool for water resources management. The study seeks to a) examine the water Market in economics b) review the experiences of the countries of interest. The results show that, in addition to primary requirements, it is inevitable and essential to respect the fundamental requirements to establish an efficient water market. In total, the water market could signal manufacturers and consumers to efficiently use water resources when the market meets these requirements. Considering the set of institutional arrangements and climatic, geographic and technical issues, the market approach as the first and most effective function for pricing and optimal allocation of water resources, and due to the lack of basic requirements and the impossibility of providing this facility in our country in short term, it will be an strategic mistake that will have long term inappropriate consequences in protecting and preserving the water resources. The results of the study show that the current condition of water market approach in protecting water resources is inefficient; therefore, it may be easier and more effective to use other approaches, such as improving water productivity in different sectors like agriculture, to optimize exploitation of existing water resources.