Estimating the Cost of Water and the Economic Value of Water in the Farmlands Covered by Man-Made Ponds: A Case Study of the Alborz Project Area in Iran
Water pricing is considered as one of the most important management tools of water resources, which can result in optimized allocation in the agricultural sector. In this regard, this study estimated the cost of water and the value of water in the farmlands covered by the selected manmade ponds...
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| Format: | Article |
| Language: | English |
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Islamic Azad University
2018-03-01
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| Series: | International Journal of Agricultural Management and Development |
| Subjects: | |
| Online Access: | http://ijamad.iaurasht.ac.ir/article_537839_d90e8f3dd051d609750d73ab2b95a8f1.pdf |
| Summary: | Water pricing is considered as one of the most important
management tools of water resources, which can result
in optimized allocation in the agricultural sector. In this regard,
this study estimated the cost of water and the value of water in
the farmlands covered by the selected manmade ponds (MMPs)
within the Alborz project area in Mazandaran Province using
the engineering economics methods and production function
calculation. The required data were collected via a survey conducted
in 2013-2014 growing season. Sample size was estimated
to be 198 people. After studying various production functions,
transcendental production function was chosen as the best
functional form. Next, the economic value of water for rice in
the basin covered by the selected MMPs was calculated to be
19,065 IRR per m3 using an estimation of the production
function. In addition, the cost of water per m3 in the selected
MMPs was obtained as to be 868 IRR at the interest rate of
22% and 394 IRR at the interest rate of 12%. Comparing the
cost of water with the economic value of water demonstrated
that the economic value of water is higher than the cost of
water in the selected MMPs, and that both of them had great
difference with the price paid by farmers. The implication is
that the existing gap between the real price and the price paid
by farmers should be filled by the economical pricing of water. |
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| ISSN: | 2159-5852 2159-5860 |