Effects of Drought on Cultivation Pattern and Welfare of Farmers in South Mahyar Plain

Groundwater resources in the world are experiencing significant reductions due to climate change and drought. Therefore, in order to make appropriate decisions by managers and planners, forecasting and studying the economic effects of drought is essential. Thus, the purpose of this study was to investigate the welfare effects of drought on groundwater beneficiaries. Accordingly, the present study investigated the economic effects of drought and its impact on the cultivation pattern of the southern Mahyar Plain and changes in social welfare in the 2016-2017 crop years, using the groundwater market approach. For this purpose, three approaches of regression estimation, positive mathematical programming, and dynamic programming were used. The results showed that in drought conditions, the area under barley and wheat cultivation increased and the area under corn decreased. Other results showed that the reduction of water supply due to drought would reduce the social welfare by 1020 million Rials (based on 2016 prices). Therefore, it is suggested that the amount of welfare lost by farmers due to water shortages should be a criterion for determining the amount of compensatory payments.