The impact of water price strategies on the allocation of irrigation water: the case of the Jordan Valley |
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| Institution: | 1. Departamento de Ingeniería Hidráulica y Ambiental, Pontificia Universidad Católica de Chile, Av. Vicuña Mackenna 4860, Santiago, Chile;2. Escuela de Arquitectura e Instituto de Estudios Urbanos, Pontificia Universidad Católica de Chile, El Comendador 1916, Santiago, Chile;3. Centro de Desarrollo Urbano Sustentable CONICYT/FONDAP/15110020, Av. Vicuña Mackenna 4860, Santiago, Chile;4. Fondazione Eni Enrico Mattei, 30124, Venice, Italy;5. Department of Mathematics for the Economy. University of Valencia, Campus dels Tarongers S/N, 46022 Valencia, Spain;1. Luke Natural Resources Institute Finland, Economics and Society, Koetilantie 5, FI-00790 Helsinki, Finland;1. College of Arts and Sciences, Northeast Agricultural University, Harbin 150030, China;2. College of Economics and Management, Northeast Agricultural University, Harbin 150030, China;3. School of Water Conservancy & Civil Engineering, Northeast Agricultural University, Harbin 150030, China |
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| Abstract: | This paper discusses the optimal water allocation and cropping patterns for the Jordan Valley, taking into consideration variations in expected incomes from agricultural production and rising water prices. The calculations were based on information available on water supplies, areas under irrigation and market conditions, and used linear programming models for determining solutions that maximize gross margins and minimize potential variations in these gross margins. The results indicated that optimizing cropping patterns and the allocation of irrigation water still has a substantial potential to increase the financial return from agriculture. Optimal solutions that consider risk from varying gross margins react quite elastically in terms of demand for irrigation water to rising water prices. This adds the element of a changing market supply to any discussion about managing water consumption between sectors of the society by using pricing mechanisms. |
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