Determining the shadow price of water using MGA method: A case study of Dasht Naz of Sari-Iran

Abstract

One of the major limiting factors of the Iranian agricultural sector development is the water entry. Thus, optimized exploitation management which is achieved through establishment of balance between supply and demand of this scarce resource is the only solution. This study tries to use a modern method for Dasht Naz of Sari in different scenarios of the total return (here normal linear programming program) to achieve the water shadow price (water economical value). This would be achieved by using the Modeling to Generate Alternative (MGA) technique, utilizing the gathered data from Dasht Naz of Sari Agriculture and Industry Complex, Sari city agriculture administration and sari city meteorological administration during 2008. The MGA technique results indicate that the water shadow price in low income deviations of Dasht Naz of Sari Agriculture and Industry Complex is sensitive and quite sensitive for high deviations. So that the water shadow price during the summer, in 50% deviation of total return becomes zero. Also, the water economical value in summer for the normal linear programming model is Rls 1030. This parameter for spring and autumn becomes zero. Key words: Dasht Naz of Sari, Iran, shadow price of water, modeling to generate alternative technique.