Research Article
H. Rahiminia; B. Akbari Moghadam
Abstract
Introduction: The limitations regarding production factors as well as the increasing global markets requirements have increased the importance of products competitiveness. Despite its potentials for export including easy access to Iraq's market as well the availability of important resources of agricultural ...
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Introduction: The limitations regarding production factors as well as the increasing global markets requirements have increased the importance of products competitiveness. Despite its potentials for export including easy access to Iraq's market as well the availability of important resources of agricultural products, Kurdistan province in Iran has failed to make progress in terms of production and exporting agricultural products. Iran's Kurdistan Province has the important water and labor sources of Agricultural products. Kurdistan share of Iran's Agricultural products export is nearly 1.5 percent. Kurdistan province must recognize its comparative and competitive advantage to increase its competitiveness in international market. Comparative and competitive advantage are used to explain the tendency of countries to export or import commodities. We have used a combination of different indicators to explain the competitiveness of agricultural products in Kurdistan province.
Materials and Methods: The international competitiveness is a challenging phenomenon that has become increasingly important in today's world. Some economic theory emphasizes that change in comparative advantage should be a reflection of changes in the endowment and factors of products. Others attribute the major cause of world trade fluctuations to the technology gap, production factor and domestic costs. Institutional quality and human capital are the factors affecting world trade. Evidences that production and exports become more diversified-not more specialized- as per capita income rises has been interpreted to suggest that comparative advantage does not evolve as theory predicts and has been taken as a basis for a revival of industrial policy in developing countries.
This paper uses the Normalized Revealed Comparative Advantage (NRCA) and Constant Market Shares (CMS) indices to analyze the competitiveness of agricultural products of Kurdistan province for the years 2010-2016. CMS index is combination of three indictors: goods effects, market effects and competitiveness effects. These indexes are calculated for 32 agricultural items with relevance to the agricultural sector. The relevance basis for the classification of 32 agricultural items is the Harmonized Coding and classification system (HS).
Result and Discussion: The results show that Kurdistan province has the comparative advantage between 16 agricultural items comparing to other Iran' provinces. Among those 16 agricultural items, apple, tomato, cucumber, lettuce, other vegetables, pepper, potato, watermelon and eggplant have a high comparative advantage with the NRCA index by more than 0.0005. In the other words, the CMS index indicates the revealed competitive advantage of Kurdistan province in 8 agricultural items. These consist of eggplant, strawberry, animals-meat, garlic, carrot, onion, lettuce and oil and fruit seeds. Kurdistan province cannot convert comparative advantage of important products to competitive advantage. These important products are apple, tomato, cucumber, lettuce, potato and watermelon.
Results of market effect index emphasized that the Iraq market is appropriate for exporting products such as fresh animals, milk and dairy products, potato, piles and shallots, lettuce, carrots and turnips, cucumber, eggplant, currant, watermelon, dried fruits and grains. But Kurdistan province has not export advantage in all products. The results of this study suggested that it is beneficial for the framers in Kurdistan province to produce the products which have relative and comparative advantage and also try to move from comparative to competitive advantage.
Conclusion: This paper offers empirical consistency among five indices of competitiveness advantage to examine Kurdistan province' international advantage in agricultural items in the previous seven years. The results show that Kurdistan province has comparative advantage in many of agricultural products, but it is not successful in creating competitive advantage in target market. Kurdistan province must try to convert its comparative advantage of products to competitive advantage to develop its share of target markets.
Research Article
S.S. Ahmadzadeh; H. Amirnejad; S.A. Hosseini Yekani
Abstract
Introduction: The overuse of fertilizers in recent years has led to the production of harmful agricultural products and environmental pollution. Studying the environmental efficiency of agricultural activities and transferring the results of these studies to farmers and making practical use of ...
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Introduction: The overuse of fertilizers in recent years has led to the production of harmful agricultural products and environmental pollution. Studying the environmental efficiency of agricultural activities and transferring the results of these studies to farmers and making practical use of them is one of the important strategies that can have a significant impact on the production of healthy products with less negative impacts on the environment. The main objective of this research is to measure the technical and environmental efficiency of rice farms in Guilan province. Previous studies in agriculture sector considered pesticides and fertilizers as undesirable inputs in the environmental model but considering undesirable outputs as inputs leads to an unbounded PPS, which is not rational from an economic perspective. So in this study, the nutrient surplus (nitrogen and phosphorus surplus) from rice fields, caused by overuse of chemical fertilizer, was considered as an undesirable product in the environmental model.
Materials and Methods: The presence of outliers in the dataset may bias efficiency estimates: this could make the results meaningless and misleading. The data cloud method is useful in identifying and removing outliers in the data, thus leading to more accurate efficiency estimates. Therefore, at first, farms that were identified as outliers were deleted from the sample. Then the nitrogen and phosphorus surplus were calculated by material balance condition and farms with negative or zero NS and PS were removed from sample, then the remaining farms were used to estimate the technical and environmental efficiency. To determine efficiency, the directional output distance function method was used. In this method, it is assumed that undesirable output is produced along with the desirable output and that means maximizing optimum output while reducing undesired output. The required data were collected by questionnaires from 427 Rice farmers.
Results and Discussion: The results indicated that the amount of nitrogen and phosphorus surplus in rice farms of Guilan province were 44.63 and 14.31 kg/ha, respectively. Therefore, if rice farmers continue to use current levels of nitrogen and phosphorus fertilizers, environmental problems caused by NS and PS would increase.
The average technical efficiency of farmers in constant and variable returns to scale is 59 and 69 percent, respectively. So, it is possible to improve the efficiency of rice farms. In other words, the technical efficiency of farms under assumption of CRS and VRS can be improved 41% and 31%, respectively, through increasing output. The average environmental efficiency was 52%, it indicates that environmental efficiency is low. So according to the directional nutrients efficiency measure, rice farmers can increase their rice production and reduce environmental pollution simultaneously.
Based on the results, environmental efficiency of farmers is lower than technical efficiency and there is a significant difference between the average efficiency with regard to nutrient surplus and without it, so if the nutrient is not considered in the model the efficiency score is estimated more than the actual value by 17%. The results also showed that almost 82% of these rice farmers are technically inefficient and 85% are environmentally inefficient. Spearman correlation coefficient between technical and environmental efficiency was 0.772. This indicated there is a positive relationship between these two kinds of efficiency and units with high technical efficiency also have high environmental efficiency.
Conclusion: One of the reasons for over usage of fertilizers and neglecting chemical fertilizer damages by farmers is that most farmers cultivate rice based on past experiences and they are more concerned with the economic aspect of production and not considering the external effects of increasing production methods. Lack of facilities and appropriate market for introducing and supplying healthy crops and the absence of appropriate agricultural policies are major obstacles to producing healthy crops that leads to continued usage of conventional production methods and the inadequate consumption of pesticides and fertilizers. So controlling fertilizer usage in farms, encouraging the consumption of healthy products, establishing training classes for farmers and raising their awareness about dangers of overuse of chemical fertilizers are essential for improving the environmental efficiency of Rice farmers in Guilan province.
Research Article
H. Mohammadi; M. Aminizadeh; H. Aghasafari
Abstract
Introduction: International trade leads to financial and economic development by improving domestic productivity. Given the importance of trade, various trade topics such as intra-industry trade, trade survival, trade balance and trade liberalization have been examined in the research literature. One ...
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Introduction: International trade leads to financial and economic development by improving domestic productivity. Given the importance of trade, various trade topics such as intra-industry trade, trade survival, trade balance and trade liberalization have been examined in the research literature. One of the most important trade concepts received less attention is export efficiency. The export efficiency is defined as the ratio of actual exports to the maximum export potential in the destination markets. Pistachio is one of the important products in Iran’s agricultural exports. The share of Iran’s pistachio exports has dramatically decreased from 58 percent in 2000 to 24 percent in 2016. Despite the importance of investigating the exports efficiency in planning and policymaking, there is no empirical study about the measuring pistachio exports efficiency. So, this paper aims to assess the main determinants of pistachio exports of Iran and evaluate the export efficiency in the main destination countries
Methodology and Data: In this study, the stochastic frontier gravity model is employed for investigating the Iran’s pistachio export efficiency in its importing countries. The gravity model is a well-known tool by international trade economists which explains trade flows between two trading countries based on economic size and geographical distance. The analysis is based on panel data covering 42 trading countries during 2001-2016. The selected countries are Australia, Bahrain, Belgium, Bulgaria, Canada, China, Cyprus, Czech Republic, Egypt, France, Germany, Greece, Hong Kong, Hungary, India, Iraq, Italy, Japan, Jordan, Kazakhstan, Kuwait, Lebanon, Luxembourg, Malaysia, Mexico, Netherlands, Pakistan, Poland, Qatar, Romania, Russia, Saudi Arabia, Slovakia, Spain, Sweden, Switzerland, Syria, Tunisia, Turkey, Turkmenistan, United Arab Emirates and United Kingdom.
Results: The results of Fisher and IPS (Im, Pesaran and Shin) panel unit root tests clearly show that all the variables are stationary. The results of Chaw and Hausman tests indicated that fixed effect model is the best model. The coefficient of Iran’s GDP carries a positive sign on its coefficient and is consistent to expectations. The coefficient of importers’ GDP carries the expected positive sign on its coefficient and is highly statistically significant at 1 percent level, indicating that higher GDP has translated into higher demand and so higher imports. The coefficient of the variable geographical distance is as expected negative and statistically significant at 10 percent level. This means that distance play an impeding role in pistachio exports from Iran to its importers. The coefficient of the variable per capita GDP difference as a proxy of economic difference is positive and significantly statistically at 10 percent level. This shows that pistachio export from Iran to its importing countries with different economic structure is higher compared to importing countries with similar economic structure.
According to the results, the coefficient of the dummy variable for regional trade agreement is positive and statistically significant at 5 percent level. This indicates that membership of Iran and its partner in same agreements has significantly affected Iran’s pistachio exports to its importing countries. The coefficient of the dummy variable for common border is positive and highly statistically significant at 1 percent level indicating that common border between Iran and its partner led to same food-style and lower transaction cost which have increasing effect on Iran’s pistachio exports. The coefficient of dummy variable for high income is positive and significant at 10 percent level, suggesting that Iran’s pistachio exports to high income countries is higher compared to other countries. The coefficient of dummy variable for global economic crisis is negative and highly statistically significant at 1 percent level. This means that economic crisis led to decrease demand for unnecessary food. The coefficient of dummy variable for economic sanctions is negative and highly statistically significant at 1 percent level, showing that economic sanction led to decreasing supply from Iran to its importing countries particularly EU countries.
Based on the efficiency results, none of the country showed100% technical efficiency. Also, the average of Iran’s export efficiency has decreased in all destination markets over the period 2001-2016. In the panels of Asia and Europe as important destination regions, Iran’s export efficiency has increased and decreased respectively.
Discussion: According to the empirical findings, there is a lot of potential in order to increase Iranian pistachio exports to destination countries. Therefore, due to the positive and significant effect of common border, it is suggested that trading countries with same border (land or sea border) should be a top priority for pistachio exports. Also, based on the positive effect of regional trade agreement, it is recommended that exporters be granted through access to larger and safer destination markets by joining larger trade agreements.
Research Article
F. Kashiri Kolaei; S.A. Hosseini Yekani; S.M. Mojaverian
Abstract
Introduction: Selecting suitable crops for cultivation in a non-certain environment is considered as an important management topic in the agricultural sector. Despite the multiple application of probability theory in quantifying uncertainty in the form of risk programming, validity of this theory ...
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Introduction: Selecting suitable crops for cultivation in a non-certain environment is considered as an important management topic in the agricultural sector. Despite the multiple application of probability theory in quantifying uncertainty in the form of risk programming, validity of this theory depends on the existence of frequency for uncertain variable. For events that cannot be measured by frequency, the only solution is to use subjective judgment of persons in the domain field rather than historical data. Some experts have mistakenly considered subjective judgmentl as a subjective probability and thus used the probability theory to quantify subjective judgmental. But based on existing evidence, the quantification of subjective judgment should be carried out in another theory called the uncertainty theory. In uncertainty theory, in addition to using the belief degree rather than frequency for calculating mathematical moments, the expected value of multiplicative variables will be different with their corresponding relations in the probability theory. Considering these conditions and having in mind that the agricultural sector is always faced with uncertain variables such as price of crops and weather conditions like rainfall, in this study the revenue uncertainty measures of major crops in the Goharbaran region of Sari have been calculated and compared. There are different measures for uncertainty, which in the present study variance and Tail Value at Risk (TVaR) have been used.
Materials and Methods: The first step in the application of the uncertainty theory is the elicitation of the belief degree or subjective judgments of the farmers about the crop's price and rainfall during the crop season. To elicit the uncertainty distribution of these variables based on the subjective judgments of farmers, 120 farmers were randomly selected in 2018. After eliciting the farmers' beliefs about uncertain rainfall and prices in the cdf method, it was necessary to select the number of belief degree which current practice was based on previous studies in this field. After calculating the above subjective judgments, while assuming linear, zigzag, normal and normal forms for uncertainty distribution, the parameters of each function were calculated using the least squares method. Among the forms of uncertainty distribution functions, the best form of the uncertainty distribution for each crop's price and rainfall was selected by comparing the RMSE indexes. Subsequently, by calculating a causal relationship between rainfall and crop yield, inverse uncertainty distribution of yield was also extracted. Given the inverse uncertainty distribution functions of crop price and yield, required parameters such as expected revenue, variance and TVaR of revenue at 95% confidence were calculated based on operational laws of uncertainty theory and probability theory. Eviews and Matlab software were used to estimate the yield response function and the uncertainty distribution functions, respectively.
Results and Discussion: In this study, after collecting the belief degree of farmers in the studied area about different levels of price and rainfall, three groups of comprehensive beliefs about prices and rainfall were determined by goodness of fit test. Then, according to the relationship between crop yield and rainfall, the inverse function uncertainty distribution is also calculated. With the uncertainty distribution function of crops price and yield, the expected revenue, variance (standard deviation) and TVaR measure for revenue per hectare of crops were calculated and compared with the uncertainty theory as well as probability theory. Based on the results of this study, the amount of the above measures varied in different belief degree groups, which is due to differences in the uncertainty distribution parameters. Also, based on the results of this study in all groups of beliefs for all crops, the probability theory compared to the uncertainty theory has estimated the variance approximately more than 30% less, which is a significant result. In other words, applying probability theory to belief modeling will lead to erroneous and misleading results. In the case of the TVaR measure in binary multiplicative variable conditions, the use of probability theory and uncertainty theory in calculating TVaR does not yield conflicting results.
Conclusion: The purpose of this study was to compare the results of applying probability theory for modeling belief degree rather than uncertainty theory in order to illustrate the necessity of using uncertainty theory in belief degree modeling. Studying the effect of probability theory in modeling the belief degree also suggests that the application of probability theory in the presence of two uncertain variables has no significant effect on expected values and TVaR but has a significant effect on variance size. Based on the results of the present study, assuming the binary multiplicative variable, in calculating higher mathematical moments such as variance, the results of probability theory and uncertainty theory make a considerable difference. This demonstrates the need to promote the uncertainty theory in belief degree modeling. In other words, basic training in the belief degree modeling method should be considered.
Research Article
S. Nikmehr; M. Zibaei
Abstract
Introduction: Water resources are under increasing pressure from climate change, population growth, and socio-economic development. Recent assessments have revealed that climate change accounts for about 20% of the increased water scarcity. Due to the impacts of climate change on water resources, agriculture ...
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Introduction: Water resources are under increasing pressure from climate change, population growth, and socio-economic development. Recent assessments have revealed that climate change accounts for about 20% of the increased water scarcity. Due to the impacts of climate change on water resources, agriculture is one of the most important sectors of the economy affected by this event. Accordingly, food security threatened by climate change is one of the most important challenges of the 21st century to provide sufficient food for population growth. Because of the abundant effects of climate change and water scarcity on farmers' welfare, different strategies have been adopted to adapt to these changes. Adaptation can be defined as: “adjustment in ecological, social or economic systems in response to actual or expected climatic drivers and their effects or impacts. Climate change phenomenon has occurred in Iran during recent decades and it will continue in the future with greater intensity based on the seventh report of the Intergovernmental Panel on Climate Change. In other words, Iran’s aridity has been exacerbated by the climatic change to pose serious threats to its water resources and the ability to meet its residential, environmental, industrial, and agricultural water demands. In this regard, improved irrigation efficiency is vital for alleviating water scarcity and can be an adaptation strategy to climate change for this country due to water losses account for at least 45% of the water used in Iran's irrigated agriculture, which arises from inefficient irrigation systems.
Materials and Methods: The Karkheh River Basin (KRB) is one of the largest watersheds in Iran after Karoon and Dez. It is located on the western border of the country in a strategic position. This watershed consists of five sub-basins, namely Kashkan, Qarasou, Gamsiab, Seymareh, and South Karkheh. The Karkheh River Basin deal with water shortage through the frequent droughts in the region over the past decades, leading to major water deficit in downstream of the basin. Also, Climate change is expected to exacerbate the current water problems in KRB. Such ways that, 10-30% decrease in the runoff by mid-century is estimated in this basin thanks to less precipitation and higher evapotranspiration. The aim of current research is to evaluate the potential effects of climate change on irrigated agriculture and irrigation efficiency improvement strategy for adaptation in South Karkheh sub-basin using a hydro-economic model. This model integrates the strengths of the Positive Mathematical Programming (PMP), and Water Evaluation and Planning (WEAP) as a hydrological model. The MABIA module within WEAP was also used to simulate the impacts of climate change scenarios and water availability scenarios on crop yield. The hydro-economic model simulation starts with run WEAP-MABIA model for hydrological simulation of South Karkheh sub-basin. For this purpose, Model calibration was carried out using the PEST method. The Zahraei’s climate change scenarios (2015) were then used as input to the WEAP-MABIA model. Finally, results of the WEAP- MABIA were used as input to the Positive Mathematical Programming model to investigate the effects of climate change scenarios and adaptation strategy (improvement of irrigation efficiency) on the crop patterns and farmers’ profit. Required data for this study were collected from various sources. The data related to the Hydrological aspect was obtained from Khuzestan Water and Power Authority (KWPA) and Khuzestan Meteorological Office for the base period 1960-2018. Also, the required economic data were obtained through interviews with 180 farmers which randomly selected in Karkheh basin and Agriculture Organization of Khuzestan province.
Results and Discussion: The results of the WEAP model show that climate change will decrease the availability of water in agricultural areas of south Karkheh sub-basin. But the impact of climate change varies across regions. So that the water available in Payepol and Karkheh-Noor is reduced by 8.29% and 32.76% respectively. The MABIA method results also indicated that the B2 climate change scenario in the 2018–2050 periods may have a severe impact on crop yields and irrigation water requirements.The MABIA method results also showed that the climate change scenario will likely lead to crop yield decreases, ranging between 1.5% and 34.05%. These changes in crop yields would be accompanied by increases in irrigation water requirements ranging between 1.11% and 22.43%, for all crops. A strategy to improve irrigation efficiency will mitigate the effects of climate change on the performance of different crops (especially rice crops). The results show that applying this strategy does not have a significant impact on the pure water requirement (actual evapotranspiration of products). In fact, applying this scenario (improving irrigation efficiency by 20%) will reduce gross water requirement by preventing water loss. Finally, results of the Positive Mathematical Programming showed that the total irrigated crop area is reduced under climate change by 17.93%. Therefore, Total agricultural profits decrease by 44% under climate change, compared to the reference scenario. The Karkheh Noor irrigation area faces the largest reductions in crop area. Also, this area shows the largest reduction in agricultural profits (59.9%). In contrast, the smallest decrease in crop area and agricultural profits have occurred in Payepol. But the reduction of water use due to the improving irrigation efficiency will increase the profit of agricultural activity in the Karkheh sub-basin by 340 billion Rials.
Conclusion: This research has tried to contribute to the analysis of climate change impacts and adaptation by addressing the processes that occur at the sub-basin level. The Karkheh sub-basin case study, an illustrative example of critical water and climate interactions, permitted to illustrate climate change vulnerability and adaptation. The results of this study showed that Climate change can affect South Karkheh sub-basin's agriculture through changes in water resource flows and allocations. These changes impose remarkable economic costs on farmers. But the application of on-farm adaptation option via investment in improved irrigation efficiency technology does reduce the impact of climate variability. Therefore, this research demonstrates that the implementation of such a policy, can support adaptation and reduce the risk faced by farmers in light of climate change.
Research Article
S. Roudari; masoud homayounifar; M. Salimifar
Abstract
Introduction: The banking sector has a financial intermediary role and can directly and indirectly support the growth of the real sector of the economy. In countries such as Iran whose economy is bank-based, economic growth is largely dependent on bank loans and according to macroeconomic changes, banking ...
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Introduction: The banking sector has a financial intermediary role and can directly and indirectly support the growth of the real sector of the economy. In countries such as Iran whose economy is bank-based, economic growth is largely dependent on bank loans and according to macroeconomic changes, banking flexibility has a great importance in economic development. On the other hand, according to the policies of the agricultural sector in the development perspective document, which insist on food security of the country by relying on production from domestic sources and emphasize on the self-sufficiency of production of basic products, the development of the agricultural sector has always been a matter of concern for the policymakers. One of the most important limitations in the agricultural sector is the limitation of financial resources for using modern technologies and the creation of higher added value products. Among the factors influencing the formation of an efficient financing system is the instability in other financial markets, especially the exchange rate, which affects the country's GDP and creates cyclical effects, finally affecting the performance of the banking sector. In fact, the impact of GDP on banking ability to provide facilities during periods of recession and booms is explained through business cycles. The purpose of this study is to investigate the effect of fluctuations in some asset markets such as exchange rate and stock index along with the variables of business cycles and agricultural products import on the efficiency of agricultural facilities.
Materials and Methods: In the present study, several econometric models have been used to investigate the effect of exchange rate and stock index fluctuations and business cycles on the efficiency of agricultural facilities. Initially, wavelet transform model was used to extract exchange rate and stock index fluctuations. The Daubechies discrete wavelet was used for this purpose. The advantage of this approach over the family of Arch models is the ability to distinguish fluctuations across time periods. In addition, Hodrick Prescott filter was used to extract business cycles, and Bootstrap data envelopment analysis approach was applied to evaluate the efficiency of agricultural facilities. The advantage of this approach over the data envelopment analysis approach is its bias correction and greater stability. The Markov switching model was also used to estimate the final research pattern. The used period in the study is 1384:1-1396:4.
Results and Discussion: According to Hamilton's study, the intercept that has the lowest coefficient indicates a low regime (low efficiency of facilities granted to the agricultural sector) and the intercept with a highest coefficient indicates the high regime (high efficiency of facilities granted to agriculture). Therefore, the zero regime in the present study indicates the high efficiency regime while regime indicates the low efficiency regime of the granted facilities. Based on the results of model estimation, the occurrence of business cycles in all regimes would lead to decline in the efficiency of the banking network facilities provided to the agricultural sector. The impact of exchange rate fluctuations depends on the time period. Short-term fluctuations have no significant effect on facility efficiency but medium- and long-term fluctuations have a negative significant impact. If the currency market volatility persists, it would reduce the efficiency, regardless of the regime and the level of efficiency of the facility. Of course long-term exchange rate fluctuations will have a stronger negative impact when the regime of agricultural facilities efficiency is high. Stock index fluctuations in the medium and long term also have a positive and significant impact when the efficiency of agricultural facilities is high. In case of high efficiency level of agricultural facilities, increasing imports of agricultural products will lead to decrease in efficiency.
Conclusion: In many studies on the effect of exchange rate, stock fluctuations, and business cycles on the performance of the banking network, several important factors have been ignored such as regime changes, and time-scale in the efficiency of facilities granted to the agricultural sector. Due to different impacts of exchange rate and stock index fluctuations across different time periods as well as on the different efficiency regimes of agricultural sector facilities, the policymakers of currency and capital market should manage currency and stocks based on the volatility period and the level of efficiency of facility. In fact, in such situation, the nonperforming loans will be less and the banking network will not have problem to finance the agricultural sector.
Research Article
F. Baktash; K. Azarbayjani; Gh. Kiani; S. Daekarimzadeh
Abstract
Introduction: One of the most efficient methods of demand management that leads to the regulation of water consumption pattern is amendment of pricing system based on total price of water in agriculture sector. In fact, one of the best policies and methods to maintain water resources through ...
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Introduction: One of the most efficient methods of demand management that leads to the regulation of water consumption pattern is amendment of pricing system based on total price of water in agriculture sector. In fact, one of the best policies and methods to maintain water resources through proper water pricing in different regions is to utilize an optimum pattern of water consumption. Evaluating common systems of irrigation in Khouzestan (Dez network) has indicated that the functions of most of them have been decreased because of defect in design and implementation, inappropriate maintenance, delaying in repair and lack of proper management. Economically, the costs of investment and projects construction has been considerably more than the predicted amount; moreover, the projects construction mostly lasts longer than the due date. In terms of management and utilization, decimation of water leads to stagnant water and salinity problems. Therefore, inappropriate utilization causes injustice in water distribution and discrimination among utilizers.
Materials and Methods: This study aimed to calculate the total cost of agriculture water considering funding costs, utilization costs and maintaining the costs of facilities from the perspective of Water Organization of North Khuzestan district and determining the total cost of agriculture water in irrigation network using Activity-Based Costing (ABC) method in the crop year 2018. Activity based costing is a cost-finding system that uses cost stimulants of activities to assign overhead costs of products. In fact, it is a resource consumption model that can provide proper information to help making decision about the improvement of product process. Statistics and required data were collected from agricultural Jahad organization of Khouzestan province and water affair organization of North Khouzestan district.
Results and Discussion: The price of water per cubic-meter in each activity based on costing method for wheat and corn products are 1445 and 1519 Rials respectively. It can be concluded that the quantities calculated by the Water Organization for both wheat and corn are much less than the quantities of agriculture water provision cost that is equal to 1231 Rials. Thus, the prices paid by the farmers for the products, wheat and corn, which are 142.1 and 201.3 respectively, are less than the cost of water supply. Therefore, the paid price of water could not compensate the cost of water supply. In general, it is revealed that the activity based costing (ABC) system can be one of the management solution to achieve the accurate decision making to resolve the informational requirements of the management and to benefit the company by implementing and planning this system. In addition, the results show that using ABC method in computing total cost of agriculture water in North Khuzestan leads to more accurate overhead costs dedication that causes not only to obtain accurate and correct data but also to acquire simple implementation of costing system that can benefit the managers strongly.
Conclusion: The study finds that ABC system is more accurate and correct to compute overhead costs and leads to accurate and correct data beside simplicity in executing a cost finding system that can have many profits for the managers. Considering the total cost of water, it is necessary to amend the water assignment and increase the water price gradually to decrease wasting water and prevent from overuse of water. Moreover, it is necessary to expand the area under cultivation and increase the farmers' income to improve the output of irrigation.
As water is the essential element to produce agricultural crops, costing policy based on the real cost of water should be executed gradually. It should be noticed that pricing water based on the real water price is not enough. The total costs obtained from the farmers should be applied to improve the water resources of agricultural sections and efficient management of water supply plan.