The Impact of water pricing method on agricultural water consumption in Gonbad Kavoos County

Document Type : Complete scientific research article

Authors

1 Assistant Professor of Agricultural Economics, Gorgan University of Agricultural Sciences & Natural Resources,

2 Msc Student of Agricultural Economics, Gorgan University of Agricultural Sciences & Natural Resources, Gorgan, Iran

3 Associate Professor of Agricultural Economics, Gorgan University of Agricultural Sciences & Natural Resources, Gorgan, Iran

Abstract

Water as the most scare input in the production of agricultural products is not only a limiting factor for agricultural activities, but also is obstacle to other economic and social activities. Water supply of different sectors faces a lot of constraints with increasing population and development in different dimensions and rising standards of living. Therefore, appropriate policies should be used to manage water demand. One of these policies is the pricing of water resources in different ways in the agricultural sector. Investigation of internal studies on water valuation shows that there is a great difference between the economic value of water and paying farmers for water. Water pricing policies based on the economic value of water can be effective in allocation and optimal use of water. Therefore, it is necessary to do various studies in order to apply appropriate policies to the climatic conditions of different regions. Pricing policies in different parts of the country in most cases are used only by area pricing. Due to the problem of water crisis, the growing demand, and the gap between water supply and demand, area-based pricing method does not provide sufficient incentives for optimal use of agricultural water. Therefore, this study examines the different methods of water pricing such as area pricing, volumetric pricing and combination of both.
Therefore, this study examines the optimal consumption of water resources for the purpose of water and soil conservation in Gonbad-e-Kavous County, Golestan province. This syudy considered the volumetric pricing and composition of volumetric with area-based methods in addition to area-based pricing method that is the innovation of this study. Since different agricultural policies can not be investigated and analyzed in the laboratory environment, so the potential effects of these policies should be investigated by appropriate instruments of policy before, during and after the implementing of policy. Therefore, due to the importance of the subject, in this study, the Positive Mathematical Programming (PMP) model is used to simulate farmers' behavior in the downstream lands of Golestan Dam (1) in Gonbad-e-Kavous County, in the implementation of various water pricing methods such as Area-based, volumetric and mi combined of them. In this study, data were collected using random sampling method and 20 scenarios were investigated. The GAMS software package is also used to analyze the information in this study.The results of this study show that water demand in all three methods (area-based, volumetric and combined) will decrease from 22.6 to 48.8% as water price rises in different scenarios. The highest and lowest water demand reduction is related to the area-based and combined water pricing method, respectively.Applying appropriate water pricing methods makes water be distributed optimally between users based on the value of marginal product and provides incentives to save and prevent loss. Therefore, based on the results of this study, it is recommended to use a volumetric and area-based pricing method in combination.

Keywords

References

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Journal of Water and Soil Conservation
Volume 27, Issue 2
May and June 2020
Pages 179-194

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