TY  - JOUR
AU  - Moghaddasi, Reza 
AU  - Bakhshi, Ali 
AU  - Kakhki, Mahmood Daneshvar 
PY  - 2009
TI  - Analyzing the Effects of Water and Agriculture Policy Strategies: An Iranian experience
JF  - American Journal of Agricultural and Biological Sciences
VL  - 4
IS  - 3
DO  - 10.3844/ajabssp.2009.206.214
UR  - https://thescipub.com/abstract/ajabssp.2009.206.214
AB  - Problem statement: Because of growing demand for water resources, 
increasing cost of supplying water and overdraft of underground waters, economists 
suggest water pricing policy to improve water allocation efficiency in Iran. While 
due to political risk, economic and cultural concerns, government tends to reject 
that advice. This study addressed questions of what policy alternatives to water 
pricing could be used to improve irrigation water allocation efficiency. Approach: 
Three policy options include water pricing, water complementary input 
factor taxes and output taxes were examined. In order to minimize the problems 
of bias produced by fully aggregated models, sample farms were classified into 
homogeneous groups of farmers by means of clustering technique. The analysis carried 
out by means of Positive Mathematical Programming (PMP), utilizing quadratic cost 
functions. Results: Results showed that effects of alternative 
policies were strongly dependent on group of farmers and that would create widespread 
effects on policy goals across clusters. The results also indicated that water 
pricing policy worked well in reducing the irrigation water use when the water 
price level was high and will have, in most cases, higher effects than other policy 
scenarios. Conclusion: Low level of input taxation wasn't a good 
driver in decreasing irrigation water demand and keeping the welfare level. Water 
pricing and output tax policies were better suited and effective than water complementary 
input factor taxation but both input factor tax and output tax policy at certain 
rates could be alternatives to water pricing policy. Water pricing policy had 
noticeable effects on social and environmental goals, while input and output taxes 
had small effects on that goals.