Abstract
Abstract This paper aims to determine the minimum agri‐environmental premium per hectare that farmers should receive to reduce crop irrigation.To this end, the authors develop a mixed‐integer quadratic model using a new methodology based on traditional positive mathematical programming, which allows the inclusion in the model of crop variants that are not present in the baseline situation of the farms.What is shown is that the results obtained with this new methodology, using the cost average approach of calibration, are the same as those obtained with an empirical method, when there is no change of crop distribution after the changeover from irrigated to nonirrigated farms.The theoretical results are compared with those obtained using the calibration with exogenous elasticities and are illustrated numerically for a representative farm of an area around Spain's Tablas de Daimiel in which the use of groundwater for crop irrigation has led to the ongoing deterioration of wetlands that depend on the same source of water, endangering the region's environmental sustainability.
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