Agricultural Water Pricing Under Conditions of Uncertainty (Case study: Rafsanjan-Anar plain)

Of major constraints for crop production in arid and semi-arid regions of Iran are the lack of water resources and drought, and due to uncontrolled groundwater abstraction, the quality of agricultural water is declining gradually. Water pricing is one of the tools for water resources planning and water demand management. In this regard, the present study aims to determine the economic value of water in agriculture with respect to its different qualities in conditions of uncertainty in Rafsanjan and Anar provinces. Using interval mathematical programming, the shadow price range for different qualities of water was obtained. The price elasticity of demand was estimated in order to evaluate the effectiveness of pricing, the standard water demand function and to use it more efficiently. The findings show that the shadow price of water varies within different groups, and fresh water, moderately saline water and highly saline water were of the highest economic value, respectively. Comparing the efficiency of the plan in the current and equilibrium modes reveals that although water consumption has decreased by 50%, but the efficiency of activity has decreased by only 13.44%, and this implies that the amount of water consumption can be reduced in the virtue of redistributing water in pistachio orchards with minimal reduction in activity efficiency. This is feasible via eliminating low yield and profit, yet preserving higher yield pistachio orchards, may lead to reducing water consumption and extraction, and it also ensures high economic benefits for farmers.