Optimal allocation of land and water resources in irrigated agriculture by means of Goal Programming: Application in Loudias River Basin

Abstract

Agriculture is an economic activity that contributes significantly to the gross national product of a country, securing at the same time the viability of the rural sector and the social coherence. On the other hand, it can generate an environmental externality, especially concerning water resources that, in the name of higher crop productivity, are often overexploited or polluted. Most agricultural decision analysis studies are primarily focusing on farmers’ welfare optimization. Therefore, this externality is only examined as a negative environmental effect of different farming and agricultural policy scenarios. However, a proper decision analysis in the field of agricultural policy should be guided by the goal of finding a unique “optimal” solution out of a great number of possible alternatives that arise from a complex integrated socio-economic and environmental system, which incorporates significant conflicted interests. The main objective of this paper is to create, apply and evaluate a model that aims at the simultaneous maximization of farmer’s welfare and the minimization of the consequent environmental burden. More specifically, weighted and lexicographic goal programming techniques are employed. These techniques are implemented on a representative area in the Loudias River Basin in Greece to seek for a compromising solution - in terms of area and water allocation (under different crops) - resulting in figures that will come as close as possible to the decision maker’s economic, social and environmental goals. The information that is incorporated into the selected goals includes farmers’ welfare, characterized by securing income and employment levels, as well as environmental benefits, such as water resources protection from excessive application of fertilizers and from unsustainable use of irrigation water. Several weights or priority levels can be assigned on these goals, according to the intentions of the decision maker, that are likely to differentiate the final allocation of resources. Hence, the analysis is undertaken under different policy scenarios (e.g. environmental friendly, farmers’ friendly and compromising scenarios) and the results are well elucidated. In addition, it is further examined the different final outcome that may arise when the targets of the various economic and environmental goals are relaxed in order to reduce the information bias from the decision maker as well as to better perceive the indirect relationship between some competitive goals.