Evaluating the impact of creating a water market on improving productivity using a mathematical programming model (Case study: Tajen watershed)

Document Type : Research Paper


Department of Water Engineering, Faculty of Agricultural Engineering, Sari Agricultural Sciences and Natural Resources University, Sari, Iran.



The purpose of this study is the effects of the formation of water markets on the improvement of water productivity in the Tajen catchment basin. In this research, a mathematical programming model modeling system and profit maximization objective function were used in MATLAB environment. After simulating the formation of the water market, its impact on physical and economic water productivity indicators was evaluated in two groups including: farms without water restrictions group (A) and farms with water restrictions group (B). Based on the results, forming a water market leads to a 13 percent increase in profit in group (A) and 30 percent in group (B). According to the results, the formation of the water market reduces and increases the amount of water consumption in representative farms (A) and (B), respectively. The results of the evaluation of water productivity indicators indicate that in group (A), the availability of water and consequently the increase of the cultivated area, and in group (B), the compensation of the lack of water and the increase of the cultivated area have led to an increase in physical productivity. In the farms of group (A), the sale of water and in the farms of group (B), the allocation of water to products with higher economic value has led to an increase in the economic productivity of water. In general, it can be said that forming a water market leads to an increase in productivity, but alone it does not lead to achieving sustainable agriculture and reducing water consumption at the watershed level. Therefore, the implementation of other policies such as the control of extraction from surface and underground water resources, volume delivery of water based on the pattern of optimal cultivation and allocation of water to products with higher economic value along with the water market approach can improve water productivity in addition to reducing water consumption.


Main Subjects

  1. Aghaie, V., Alizadeh, H., & Afshar, A. (2020). Agent-Based hydro-economic modelling for analysis of groundwater-based irrigation Water Market mechanisms. Agricultural Water Management, 234, 106140.
  2. Ahmadi, A., Zolfagharipour, MA., Nikoee, A., & Darali, M. (2016) Economic evaluation of the implementation of the technical platform market agricultural water irrigation network Mahyar part of the study. Iranian Water Resources Researches Journal, 37(3), 35-49. (In Persian).
  3. Anwar, AA., & Haq, ZU. (2013). Genetic algorithms for the sequential irrigation scheduling problem. Irrigation Science, 31 (4), 815-829.
  4. Bagheri, A., Nikoyi, A., Khodadad Kashi, F., & Shaukat Fadaei, M. (2017). Evaluation of the water pricing policy on the stability and preservation of the aquifer: a study of the northern Mehyar aquifer in the Zayandeh Rood basin. Journal of Agricultural Economics and Development, 31(2), 105-120. (In Persian).
  5. Balali, H., & Viaggi, D. (2015). Applying a system dynamics approach for modeling groundwater dynamics to depletion under different economical and climate change scenarios. Water, 7(10), 5258-5271.
  6. Çetin, O., & Kara, A. (2019). Assessment of water productivity using different drip irrigation systems for cotton. Agricultural Water Management, 223, 105693.
  7. Chu, L., & Grafton, Q. (2020). Water pricing and the value-add of irrigation water in Vietnam: Insights from a crop choice model fitted to a national household survey. Agricultural Water Management. Journal of Environmental Management, 183, 453-459.
  8. Erfani, T., Binions, O., & Harou, JJ. (2014) Simulating water markets with transaction costs. Water Resources Research, 50(6), 4726-4745.
  9. Feike, T., & Henseler, M. (2017). Multiple policy instruments for sustainable water management in crop production: a modeling study for the chinese Aksu-Tarim region. Ecological Economics, 135, 42-54.
  10. Goldberg, DE. (1989). Genetic Algorithms in Search, Optimization and Machine Learning. Addison-Wesley.
  11. Hao, LN., Su, XL., & Singh, VP. (2018). Cropping pattern optimization considering uncertainty of water availability and water saving potential. International Journal of Agricultural and Biological Engineering, 11(1), 178-186.
  12. Kiani, G., & Bagheri, A. (2016). Examining the economic consequences of local water markets (Case study of Ardabil city). Journal of Iran's Water Research, 1(10), 163-169. (In Persian).
  13. Lalehzari, R., & Kerachian, R. (2020). Developing a framework for daily common pool groundwater allocation to demands in agricultural regions. Agricultural Water Management, 241, 106278.
  14. Mardani, M., Nikouei, A., Ziaei, S. & Ahmadpour, M. (2017). Codifying regional cropping pattern of agricultural and horticultural products in Isfahan province: multi-objective structural planning approach. Journal of Agricultural Economics and Development, 30(3), 188-206. (In Persian).
  15. Mozafari, M.M. (2016). Irrigation water demand management in Ardalan Plain with emphasis on pricing policy. Water and Soil Resources Protection Quarterly, 5(4), 47-68. (In Persian).
  16. Nazari, M. (2016). Water Market in Theory and Practice: Market Failure and Public Policy. Journal of Water and Sustainable Development, 3(1), 103-114. (In Persian).
  17. Noorani, L., Mousavi, S.N., & Shirvanian, A.R. (2021). Evaluating the economic effects of forming an agricultural water market in the Ramjard plain irrigation network. Agricultural Economics and Development, 29(116), 177-204. (In Persian).
  18. (2015). Water resources allocation: sharing risks and opportunities. OECD Studies on Water.
  19. Rissman, A.R., Kohl, P.A., & Wardropper, C.B. (2017). Public support for carrot, stick, and no-government water quality policies. Environmental Science and Policy, 76, 82-89.
  20. (2010). Mahab Ghods, collection of reports of performance evaluation plan and monitoring of operation management, maintenance, improvement, repair and improvement of Doroodzan irrigation and drainage network. Shiraz: Redional Water Company of Fars (RWCF). (Persian).
  21. Safari, N., Zarghami, M., Behbodi, D., & Alami, M. (2016). Modeling the welfare effect of the market in the allocation between water districts in comparison with public allocation with cooperative market development; Case Study. Iran Water Resources Research, 12(3), 22-34. (In Persian).
  22. Shahnazari, A. (2015). Studies on the integration and preparation of the decision support system (DSS) of water resources and uses in order to optimize water resources and uses in Mazandaran province. volume, 5, 73 p. (In Persian).
  23. Sun, S., Zhang, C., Li, X., Zhou, T., Wang, Y., Wu, P., & Cai, H. (2017). Sensitivity of crop water productivity to the variation of agricultural and climatic factors: A study of Hetao irrigation district, China. Journal of Cleaner Production, 142, 2562-2569.
  24. WEF. (2017). Global Risks Report 2017. 12th Edition. World Economic Forum (WEF).
  25. Wheeler, S. A., Loch, A., Crase, L., Young, M., & Grafton, R. Q. (2021). Developing a water market readiness assessment framework. In Water Markets. Edward Elgar Publishing.
  26. Xu, L., Li, X., Wang, X., Xiong, X., & Wang, F. (2019). Comparing the grain yields of direct seeded and transplanted rice: A meta-analysis. Journal of Agronomy, 9(11), 767.
  27. Zaman, AM/, Malano, HM., & Avidson, BD. (2012). An integrated water trading–allocation model, applied to a water market in Australia. Agricultural Water Management, 96,149-159.
  28. Zeng, XT., Li, YP., Huang, GH., & Liu, J. (2016). Modeling water trading under uncertainty for supporting water resources management in an arid region. Journal of Water Resources Planning and Management, 142(2), 72-89.
  29. Zibaei, M., & Malek, (2017). The potential effects of creating a water market on improving productivity and reducing water-related conflicts in Fars’s province. Water and Wastewater Journal, 28(1), 126-138. (In Persian).