The impacts of water pricing and non-pricing policies on sustainable water resources management: A case of Ghorveh plain at Kurdistan province, Iran

Abstract

As with other regions of Iran, due to excessive extraction of groundwater for intense agricultural activity, Ghorveh plain, a water-scarce irrigation district in the west of Iran, has faced a serious water crisis during the last decade. The present study investigates the impacts of two scenario policies, namely, non-price policy (as a supply-oriented policy) and water pricing policies (as a demand-oriented policy) on agricultural sector of Ghorveh Plain, using positive mathematical programming (PMP). The model was calibrated by using farm-level data for the crop years in 2016–2017. Our findings indicate that applying water supply constraint policy will change the land use and cropping pattern to the crops with higher water productivity. The increase of water resource constraints can lead to the increase of water economic return which indicates a rising value of water resources shortage, warning the producers of the agriculture sector to allocate water to the crops with higher economic value under the water resources shortage conditions. In addition, the findings underline that in a situation where the price of irrigation water is low due to the low elasticity of water demand in the agriculture sector, formulating the economic instruments such as rising water prices does not solely suffice to achieve sustainable water resource management. However, mixed scenarios emphasized that the water distribution policies should be aligned with the increases in water cost.