Determination of operation of the informal water market in comparison with one type of the formal market; the case study of Mojen region

The water market is a worthwhile mechanism in order to address increasing demands, and it helps rewarding redistribution of water in a given zone. Water markets can be both formal and informal, that is, each of them has exclusive features and is being used in lots of regions throughout the world. This study is seeking to answer the question that what extent an informal market can affect the optimal allocation of water and farmers' performance. Furthermore, the performance of the informal water market is been compared with that of the hypothetical formal water market. The results of the study show that due to the existence of informal markets in the region and the expansion of interactive relationships between farmers and gardeners, the average number of people who have not been able to meet their water needs has decreased from 88 to 55 people per year. It was also concluded that by solving some challenges and providing an interactive environment for farmers, the informal water market would have a performance of nearly 80% of a formal market without the need to become a formal market. This result highlights the importance of informal water markets. The lack of considerable reduction in crop area, at relatively low rainy years, due to the existence of the water market, is another result obtained in this study.