Irrigation Water Pricing in Iran: The Gap between Theory and Practice

Pricing policies play an important role in water demand\udmanagement and its optimal allocation. Determining proper\udwater price leads to optimal allocation of water especially in\udagricultural consumptions. Applying new subsidy targeting law\udin Iran which insists on pricing water based on its supply cost,\udwill effects considerably on water resource management in\udagriculture sector. So, in this study, different Irrigation water\udpricing methods is investigated and proper irrigation water\udprice is determined using survey data for 2010-2011 farming\udyear in Golestan Province of Iran. At the first step using econometric\udapproach, economic value of irrigation water in different\udagriculture crops is determined that shows demand side price\udfor water. Then, supply cost of surface and ground water is calculated\udusing accounting approach which shows supply side\udprice for irrigation water. Finally, economic value and supply\udcost of irrigation water compared and different water pricing\udmethods is evaluated. Results indicated that, weighted average\udof economic value and supply costs of irrigation water in\udGolestan province were 1795 and 1399 IRR per cubic meter,\udrespectively. So, improvement of water demand and supply\udmanagement could be achieved using price policies