Economic Valuation of Groundwater in Agriculture Sector (Case Study: Hamedan-Bahar Plain)

Document Type : Research Article

Authors

• H. Balali ¹
• F. Kasbian Lal ²

¹ Agricultural Economics,, Department of Agricultural Education and Extension, Agriculture Faculty, Bu Ali Sina University, Hamedan, Iran

² Agricultural Economics, Department of Agricultural Education and Extension, Agriculture Faculty, Bu Ali Sina University, Hamedan, Iran

https://doi.org/10.22067/jead.2022.72334.1079

Abstract

Introduction
Our country is among regions facing water scarcity as a large area of Iran is located in arid and semi-arid climates. So, comparing the annual average rainfall with annual mean annual precipitation on the planet, the rainfall in Iran is less than one-third of the the world, in addition, the amount of rainfall and the area in which the agricultural main water user are located, does not match.The average annual rainfall in the world is about 850 mm and for Iran is about 250 mm, which is 40% less than the annual rainfall in Asia and approximately 33% less than the annual average of the world. The province of Hamedan has an area of 19493 square kilometers, located in the west of Iran between 33 degrees and 59 minutes to 35 degrees and 44 minutes north latitude, 47 degrees 47 minutes and 49 degrees, and 30 minutes east along the meridian of Greenwich.
This province area consists of four plains including bahar, Kabotrahang, Razan and Qahavand. The water catchment area of Hamedan-Bahar plain, also known as Siminrood, is located on the northern slopes of Alvand altitudes with an area of 2,243 square kilometers. The plain is 880 km² and the surface area of the main aquifer is 468 km² (Fig. 1).
Figure 1- Location of Hamedan-Bahar Plain and its Main Aquifer Area
This plain, based on climatic divisions, is located in a cold semisolid climate and has a cool, mountainous climate. The ban on the development of exploitation of groundwater in the Hamedan-Bahar plain has been applied since the year 1992 due to the negative balance and the susceptibility of supplying drinking water in the cities of Hamedan, Bahar, Laljin.
Around, 330 of the 609 plains in the country have been declared forbidden due to excessive perceptions. Hamedan-Bahar plain has been faced with a serious problem of water shortages due to excessive withdrawal of groundwater and negative water balance and the expansion of the area under irrigated production, as the annual rate of groundwater loss in this plain is 1 meter.
The main objectives of this research are to estimate the economic value of groundwater in the agricultural sector of Hamedan-Bahar plain and to determine the optimal cropping pattern in the studied area using the GAMS programming model and mathematical programming.
Eshraqi and colleague (7) on "Estimating the economic value of water in wheat production in Gorgan," have surveyed the demanders using a production function approach in 2012-2013. The results show that the economic value of water was estimated at 1564.5 Rials per cubic meter of water. Zeratakish (23), on "The economic valuation of water in the agricultural sector with an environmental approach in the Lichter plain", used a multidisciplinary mathematical programming approach. The economic value of water with a limit of 50, 60 and 70 percent was determined as 250, 1500 and 3050 rials, respectively.
Mohammad Ayattha Watto and Amin William (2016) addressed a positive mathematical planning approach for estimating and valuing groundwater in Pakistan. Their results indicate that limiting groundwater extraction forces farmers to irrigate the demand for water. Azavara et al. (2012), conducted a study using the PMP method to evaluate the economic irrigation water in three California regions. The analysis of the results showed that the final economic value of water is at least 2.5 times the price paid by the users.
Materials and Methods
In this study, a dynamic mathematical programming model was used to evaluate the economics of groundwater in the agricultural sector. The general form of the model is as follows:




Max:NPVGM= ] * *


(1)




S.t:


 




 


(2)




 


(3)




 


(4)




The objective function (equation 1) of the dynamic programming model is to maximize the gross returns of the crop activities of the region.In this equation NPVGM is the return of the program from the agricultural activities of the study area, p_i the price of the product i, y_ijs of the product i produced with the irrigation system j in area s (kg/ha), c_ijs, the variable cost of production of product i with irrigation system j In area s per hectare, cw water consumption cost, cfer fertility cost, CE fertilizer cost, cpes cost of various chemical pesticides and co cost of other inputs including power, machinery. In this regard, X_ijs is the crop area i produced by irrigation method j in s, w, water input, fertilizer input chemical fertilizer, e energy input, pes input chemical pesticide, and other inputs. The limitation of production inputs, including water, land, labor, and chemical inputs and the market, is generally referred to in equation (2) in which b_ijs is the technical coefficient of inputs and B_i is the amount of each of them. Equation (4) represents the cost function of water used for agricultural activity in which pw is the price or tariff of a unit of water, CWE_e The cost of extracting water from the surface of the earth and pumping and distributing it at the farm level per unit area (ha) and AW The amount of water consumed per hectare is from different crops.
Results and Discussion
As the Table 1 shows, products such as tomatoes, watermelons, sugar beets and chickpeas have been eliminated from the cultivar pattern, the high water requirement, the energy required for these products and the low price, have led to an increase in farmers production costs if this pattern is implemented in the area, so cultivation of these products have not been economical for farmers in the region. The cultivation of potato and alfalfa products that have high water demand are significant in the pattern, which can be due to the economic benefits and high yield of these two products in the region. Cultivation of cobbler products, such as cucumber, is low in optimal cropping patterns. Low-crop cultivation such as corn, rapeseed, garlic and pumpkin in the optimal pattern is due to market constraints in the region and low yields of these products (corn, rapeseed, garlic and pumpkin).
Table 1- The Pattern of Cultivating the Studied Area in Optimum (unit: ha)




Product


hamedan


lalejin


Bahar


salehabad




Alfalfa


1489.500


1760.773


381.977


-




Barely


-


1526.398


-


-




Corn


-


500


-


-




Canola


-


291.727


708.273


-




Cucumber


-


2552.500


-


-




Garlic


800


-


-


-




Potato


1489.500


2552.500


1090.250


1204




Pumpkin


-


-


500


-




Wheat


1489.500


1026.102


1090.250


1204




Beans


689.500


-


590.250


1204




Source: Research Results
Estimating the economic value of groundwater in the regions
According to Table 2, the economic value of groundwater for each meter in Hamedan region is 3543 Rials, Lalejin 4538 Rials, 4015 Rials bahar and Salehabad 3690 Rials.
As these figures indicate, any additional water supply unit in the region can increase the gross margin of farmers as much as the calculated economic value of water. The average economic value of water in the Hamedan plain-spring is 3946.5 Rials.
Table 2- Results of Groundwater Economical Valuation in the Study Area (Rials)




Area of study


Economic value of water (per cubic meter)




hamedan


3543




lalejin


4538




bahar


4015




salehabad


3690




Average plain of hamedan- bahar


3946.5




Source: Research Results
Conclusion
Since the main objective of this study is to estimate the economic value of water in the region, the results showed that the economic value per cubic meter of calculated water in the study area is higher than the current price of water in the region. Therefore, any additional unit of water intake in the region can be as much as the calculated economic value of the water to increase the gross margin of farmers in the studied area.

Keywords

• Dynamic mathematical programming
• Economic valuation
• Groundwater
• GAMS
• Hamedan-Bahar plain

20.1001.1.20084722.1401.36.1.3.0

Main Subjects

• Environment and Natural Resources Economics

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