Abstract
This paper presents a System Dynamics based model to simulate a water resource system in order to develop and evaluate various supply and demand policies in a region. The proposed model focuses on the interaction of agricultural activities, water resources availability, and economic issues. The key components of this model are: estimation of available groundwater in terms of quality and quantity; evaluation of allocated water volume and their impact on crop production; estimation of groundwater environmental costs due to over-extraction; and economic assessment of multiple strategies. The model is developed in an object oriented programming environment and is applied to an arid region of Rafsanjan plain in central part of Iran. Based on this model, management scenarios are developed and analyzed using Net Present Value method. The results show that there is a limit to economic growth of this region through agricultural activities. Furthermore, economic analysis of the scenarios demonstrates that improving irrigation methods and limiting under cultivation area are the main demand management challenges.
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