Assigning Appropriate Irrigation Water Price Based on Probable Reaction of Farmers and Inter-sectoral Effects of the Price (Case Study: Roodast Irrigation District)

Selection of appropriate irrigation water price could be one of the primary economic measures in demand management of Iran's water resources management conditions. However, imposing any policies in the section would result in inter-sectoral (economic, social, and environmental) consequences. Identification of these consequences helps the water managers and authorities to find the optimum irrigation water price value. To investigate the results of implementing different policies and farmers' reaction to these scenarios, models are required that can help authorities achieve these goals with high confidence. Also, water resources planners believe that simulation of potential responses of farmers to the implementation of different policies can have an active contribution to making more correct decisions. Determination of the supplied water cost and the weighted average value of the economic value of water, to implement the scientific range of appropriate pricing scenarios to assess its inter-sectoral effects, is the main contribution of this study.

The present study attempts to simulate the agricultural conditions of Roodasht Irrigation District using the economic model for the base year of 2014-2015. Inter-sectoral effects of irrigation water pricing and probable reactions of the farmers are also investigated. With the ranking of the economic, social, and environmental indicators (using a hybrid configuration of AHP and SAW) the optimum water price is obtained.

According to the results, employing the pricing scenarios led to alter the existing cropping pattern of the Roodasht irrigation district, located in Varzaneh city in Esfahan province, by the farmers. In other words, with increasing the irrigation water price, the positive reaction of the farmers (in the form of cropping pattern) has been detected. The analysis is conducted using the Positive Mathematical Programming economic model in Gamz software. However, employing the pricing scenario has been lead to negative impacts on the economic and social indicators, while positive impacts on the environmental index. In another word, under the conditions that the local water authorities impose the increasing water scenario, the farmers' income has decreased from 19.9 to 14.33 M IRR per hectare. Moreover, the water pricing scenario reveals a similar pattern in the social indicator, so that the maximum and minimum values obtained 60.5% and 38.37% respectively for the first and the fifth scenarios. From the environmental viewpoint, by increasing the water price, the water consumption and energy balance criteria respectively show the decreasing and increasing trends.

Summing up the obtained results, with considering the importance degree of the inter-sectoral consequences of the pricing scenario; including economic, social, and environmental; the weighted average value of the entire crops of the existing cropping pattern (1540 Rial per a cubic meter) is selected as the irrigation water price.