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Optimization of Agricultural Water Use and Trade Patterns: The Case of Iran

Listed author(s):
  • G. R. Soltani


    (Department of Agricultural Economics, College of Agriculture, Shiraz University)

  • M. Bakhshoodeh


    (Department of Agricultural Economics, University of Shiraz)

  • M. Zibaei
Registered author(s):

    This study addresses the problem of agricultural water use efficiency via optimization of cropping patterns, irrigation strategies and external trade of agricultural products in Iran. Towards this end, comparative advantages of some principal crops are first determined using Policy Analysis Matrix (PAM) at three levels- farm, plain and basin. Due to importance of irrigation water, a new approach is developed for estimating scarcity price or the social price of irrigation water in the selected regions. Then, optimal cropping patterns at basin and farm levels are determined using mathematical programming techniques and considering water supply risk. According to the findings of this study, optimal allocation of water at the farm level is achieved when marginal return to irrigation water is the same not only in all growing stages of a crop but also at different growing stages of competing crops grown in the farm. Finally, the findings indicated that it is possible to direct optimal cropping patterns at basin level to maximize social profits, water-use efficiency and net virtual water import simultaneously. However, in order to draw a definite conclusion with respect to virtual water trade, more data is needed on the quantity of water embedded in each crop imported from and exported to each country. Moreover, it is necessary to design a suitable agricultural external trade plan to be used as a target for directing cropping patterns. The approach used in this study can be considered a first step in this direction.

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    Paper provided by Economic Research Forum in its series Working Papers with number 508.

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    Length: 93 pages
    Date of creation: Dec 2009
    Date of revision: Dec 2009
    Publication status: Published by The Economic Research Forum (ERF)
    Handle: RePEc:erg:wpaper:508
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    1. Diao, Xinshen & Roe, Terry L. & Doukkali, Rachid, 2002. "Economy-Wide Benefits From Establishing Water User-Right Markets In A Spatially Heterogeneous Agricultural Economy," Bulletins 12971, University of Minnesota, Economic Development Center.
    2. Rosegrant, M.W. & Ringler, C. & McKinney, Daene C. & Cai, X. & Keller, Andrew & Donoso, G., 2000. "Integrated economic-hydrologic water modeling at the basin scale: the Maipo river basin," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 24(1), December.
    3. Cai, Ximing & McKinney, Daene C. & Rosegrant, Mark W., 2003. "Sustainability analysis for irrigation water management in the Aral Sea region," Agricultural Systems, Elsevier, vol. 76(3), pages 1043-1066, June.
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    8. J. Brian Hardaker & Louise H. Patten & David J. Pannell, 1988. "Utility‐Efficient Programming For Whole‐Farm Planning," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 32(2-3), pages 88-97, 08-12.
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    11. Rosegrant, Mark W. & Binswanger, Hans P., 1994. "Markets in tradable water rights: Potential for efficiency gains in developing country water resource allocation," World Development, Elsevier, vol. 22(11), pages 1613-1625, November.
    12. Javier Calatrava & Alberto Garrido, 2005. "Spot water markets and risk in water supply," Agricultural Economics, International Association of Agricultural Economists, vol. 33(2), pages 131-143, 09.
    13. Amir, I. & Fisher, F. M., 1999. "Analyzing agricultural demand for water with an optimizing model," Agricultural Systems, Elsevier, vol. 61(1), pages 45-56, July.
    14. Hardaker, J. Brian & Pandey, Sushil & Patten, Louise H., 1991. "Farm Planning under Uncertainty: A Review of Alternative Programming Models," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 59(01), April.
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