Economic impacts of water market simulation in agriculture

Leyla Nourani,Abdoulrasool Shirvanian,Seyed Nematolla Moosavi

doi:10.2166/ws.2022.047

Leyla Nourani, Abdoulrasool Shirvanian + Show 1 more

Open Access

https://doi.org/10.2166/ws.2022.047

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Abstract

Abstract Water market is one of the modern issues in demand management in face of water scarcity, which is increasingly used in different parts of the world as a tool for optimal allocation of water consumption and transfer of water to consumers with higher final efficiency. Despite the benefits of forming a water market, such markets are not yet developed in developing countries, such as Iran. Accordingly, this study examines the economic impact of water market design on farmers’ livelihood in Iran. The data of this study were collected using a multistage random sampling method from 100 users with water rights in the irrigation network of Ramjerd plain in Fars province. The data were analyzed using positive mathematical programming and scenario making. The results showed that with the formation of the water market, the gross margin of the total lands with irrigation network of Ramjerd plain increased from 2,013.080 billion Rials to 2,194.2200 billion Rials. As a result, the agricultural economic situation of the region experienced an increase of 9%. therefore an appropriate legal and regulatory structure is recommended to create a water market on the lands located within the irrigation networks.

Highlights

Rapid population growth in recent decades has led to a sharp increase in water demand for agriculture and industry (IWRM 2010)
The positive values of the difference between supply and demand indicate a surplus of water supply and the negative values represent an excess of water demand
The results sensitivity analysis indicated that at prices below the equilibrium price, there is an excess of demand

Summary

Introduction

Rapid population growth in recent decades has led to a sharp increase in water demand for agriculture and industry (IWRM 2010). Demand management is considered the most fundamental solution to control water consumption and water supply management (Aljanabi et al 2018). There is another new view in balancing water supply and demand in face of a shortage. According to this view, the water market is one of the effective and ideal tools for reallocating water resources, which can increase the efficiency of water consumption and mitigate the economic impact of water shortage (Randall 1981; Easter & Huang 2014)

Methods

Results

Conclusion