The Effects of Tax and Subsidy Policies to Maintain and Sustain Water Resources in Kaboodarahang Plain

Over the past decades, climate changes and the limitation of surface water resources have caused excessive utilization of groundwater stocks, so that aquifers in most of the country's plains have no favorable situation now. Kaboodarahang plain is as one of the critical forbidden plains of the country which is facing water crisis. The status entails employing proper management of groundwater resources policies. The present study focuses on the economic, social, and environmental impacts of applying tax and subsidy policies per cubic meter of consumed or saved surplus water as an alternative to pricing approach.

This study was conducted and investigated via using Positive Mathematical Programming and Maximum Entropy Planning. Tax and subsidy policies were applied per cubic meter of surplus used or saved surplus water in three varying scenarios e.g. 329, 658 and 987 Rials. Needed data and information were obtained by referring to relevant organizations and 141 questionnaires completed via multi-stages cluster sampling method amid farmers of Kaboodarahng Plain during 2016-2017.

The results showed no significant change in the area under cultivation by applying tax and subsidy policies per cubic meter of surplus water consumed or saved, while rather drives the cropping pattern towards certain crops e.g. barley, cucumber and watermelon. Also, the outcomes of the research proved that applying the foregoing policies, besides reducing water consumption would increase the gross profit of target farmers.

Applying tax and subsidy policies per cubic meter of used or saved surplus water could not only motivate farmers to reduce their water consumption but provide a good alternative to water pricing policy.