Evaluating the Welfare Effects of Groundwater Level Decline on Rice Farmers in Golestan Province

Abstract
Background and objectives: The rapid population growth, along with the increasing need for agricultural production, industrial development, urban expansion, and the improvement of public health and welfare, has led to a significant rise in water demand and has consequently resulted in the excessive extraction of groundwater resources. Statistics indicate that about 46% of the world's crop production comes from irrigated lands, whereas in Iran, out of approximately 83 million tons of various crops harvested in the 2022-2023 agricultural year, 75 million tons (90.16%) were obtained from irrigated lands. Groundwater resources are one of the most important sources of water supply in areas facing surface water shortages. Excessive harvesting, continues droughts, illegal well drilling, and the lack of preventive laws have put the country's groundwater resources in crisis in some areas, and the intensification of the decline in groundwater levels in aquifers has placed more than half of the country's plains in the category of forbidden plains. Excessive harvesting of groundwater for agriculture and the decline in aquifer levels in recent years, have posed significant challenges for policymakers and managers, particularly in most of the country's aquifers, especially in Golestan Province. Since Golestan's economy relies heavily on agriculture and water is a key input in agricultural production, playing a vital role in the sustainable development of the sector, the depletion of groundwater resources not only has environmental consequences but also reduces the welfare of farmers in Golestan Province. In Golestan Province, about 86% of groundwater resources are allocated to rice (paddy) cultivation. Accordingly, this study evaluated the welfare effects of declining groundwater levels on Paddy farmers in Golestan Province.

Materials and methods: In this study, to investigate the welfare effects of groundwater level reduction on Paddy farmers in Golestan Province, after estimating the supply and demand function of water consumption in Golestan Province, the level of welfare is calculated through the area between the water supply and demand curves. The water demand function is derived from the rice production function, while the water supply function is extracted from the marginal cost of water extraction. To estimate the rice production function and the water extraction cost function, various functional forms (log-linear, linear-log, Cobb-Douglas, transcendental, translog, and quadratic functions) were estimated. The most suitable functional form was selected through econometric tests. In this study, rice production cost data (from 168 Paddy farmers) and agricultural well data (131 deep wells with rice as the dominant crop) for the 2022-2023 crop year were collected via questionnaires. To reduce bias, enhance generalizability, ensure statistical reliability, and minimize costs and time, stratified random sampling was employed. Additionally, part of the data, including water resource information for Golestan Province and watershed basins, was gathered from reports by the Agricultural Jihad Organization and the Golestan Regional Water Company. The statistical population for the rice production cost questionnaire included all Paddy farmers in Golestan Province, while the well water questionnaire targeted all deep wells (considering that deep wells account for about 60% of groundwater extraction in Golestan Province and experience the most significant decline in groundwater levels). Over 95% of these wells are used for agricultural purposes, primarily for rice cultivation. Due to climatic variations in the study area, the De Martonne index was used for stratification in the stratified random sampling method.

Results: The results indicated that the Cobb-Douglas function was selected as the superior production function, while the quadratic function was chosen as the superior cost function for well water extraction. Based on the results of the best production function (Cobb-Douglas production function), the elasticity of water input was calculated to be 0.73, indicating that a 1% increase in water consumption leads to a 0.73% increase in rice production (paddy) in Golestan Province. Using the superior production function (Cobb-Douglas) and the superior groundwater extraction cost function (quadratic function), the impact of declining groundwater levels on the welfare of Paddy farmers in Golestan Province was estimated. The findings on welfare effects revealed that for every one-meter decline in groundwater levels, the welfare of Paddy farmers decreases by 420 million Rials. Given that the average groundwater level and volume in Golestan Province's deep aquifers decreased by 2.71 meters and 31 million cubic meters, respectively, in 2023 compared to 2022, and for every one-meter drop in groundwater levels in deep aquifers, the groundwater volume decreases by 11.46 million cubic meters. The amount of water loss per deep well per meter of groundwater level decrease is 3,773 cubic meters, and the amount of welfare loss per cubic meter is 111,316 rials. Based on the average water consumption of Paddy farmers of 8,369 cubic meters per hectare, the average amount of welfare loss per Paddy farmer per hectare is 61.931 million rials.

Conclusion: The results showed that as well depth increases, water extraction costs increased, with each additional meter of well depth (decline in water table) increasing extraction costs by 4.02 million rials. For every one-meter drop in groundwater levels, farmers' welfare decreases by 420 million rials. Thus, the decline in groundwater levels reduces the welfare of Paddy farmers in Golestan Province. The study's findings indicate that excessive groundwater extraction leads to a drop in water levels and, consequently, a decline in farmers' welfare. Appropriate policies must be implemented to reduce groundwater consumption. Over-extraction of groundwater increases extraction costs and reduces farmers' profits. By raising farmers' awareness of the additional costs and overall losses caused by unsustainable water extraction, their perspective on excessive water use can be reformed. Introducing modern and water-efficient irrigation methods instead of traditional practices can help prevent overconsumption of groundwater resources. The government should also pay more attention to plans to preserve and nourish groundwater aquifers and, taking into account the reduced welfare of users, invest at least this amount annually in preserving and nourishing groundwater aquifers. Subsidy payments for fallow land and purchasing groundwater rights from farmers are among the effective schemes for preserving groundwater resources. If these policies are properly implemented by the government, they can help reduce pressure on groundwater resources while safeguarding farmers' livelihoods.