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Developing a Bi-level programming model for water allocation based on Nerlove’s supply response theory and water market

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Abstract

The issue of water resource management in the Sistan region has been complicated by water fluctuations of the Hirmand River in recent years. The decrease in the water flowing toward Sistan and followed by continuous droughts has caused a severe water crisis in this region. The critical situation of water resources in the Sistan region has faced a serious problem in the process of sustainable development in this region. Consequently, it has become more imperative to adopt effective approaches for optimal and efficient management of water, especially in the agricultural sector as it is the biggest water consumer in the Sistan region. This research focused on the optimal allocation of water to the agricultural sector with an emphasis on the water market by integrating the Stackelberg–Nash–Cournot equilibrium model and Nerlove’s supply model. The Stackelberg–Nash–Cournot equilibrium game was run with a metaheuristic algorithm composed of a dynamic genetic algorithm and a fuzzy programming method. Also, to cope with the challenges, tackle the future uncertainty, and provide more information for the adjustment of the agricultural irrigation pattern, the scenario-building technique was applied in which two parameters of irrigation coefficient and the amount of water allocated to the agricultural sector were changed. The results showed that the Hirmand 2 region has been allocated with the highest amount of water. The lowest amount of water is allocated to wheat and barley due to their low return, whereas the highest amount of water is allocated to onion and melon production. By creating a water market, the economic profit increases by 20,013 million IRR, and the inequity in water allocation changes by 0.02. The results of modeling the scenario of different irrigation coefficients and water allocated show that the economic profit increases to 695,152 and 6,109,136 million IRR when the irrigation coefficient increases to 50% and 70%, it increases to 474,550 million IRR when the amount of water allocated is increased, and it decreases to 834,946 million IRR when the amount of water allocated is decreased. The comparison of the allocation with and without a water market shows the significance and effectiveness of the water market. Accordingly, the establishment of a regional water market in the Sistan region not only changes the water allocated to the crops in the studied regions and the profit of the cropping pattern but also improves the income of the farmers and contributes to equity in water allocation among the regions. Also, the water market contributes to reducing the amount of water allocated per unit of economic profit. Given the supportive and constructive role of local and regional water markets, it is recommended to lay the ground for establishing this mechanism and optimally using it. In order to overcome the lack of water among crops and gain more economic profit, it is possible to implement the scenario of increasing irrigation efficiency using modern irrigation systems. According to the results of water allocation between regions and agricultural crops, it is suggested that low-yield crops such as wheat and barley have been removed from the cultivation pattern and replaced by high-yield crops such as onions, melons and alfalfa.

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Authors and Affiliations

  1. Department of Agriculture Economics, Agriculture Institute, Research Institute of Zabol, Zabol, Iran

    Z. Ghaffari Moghadam

  2. Department of Agricultural Economics, University of Sistan and Baluchestan, Zahedan, Iran

    E. Moradi, M. Hashemi Tabar & A. Sardar Shahraki

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  1. Z. Ghaffari Moghadam
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  2. E. Moradi
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  3. M. Hashemi Tabar
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  4. A. Sardar Shahraki
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Ghaffari Moghadam, Z., Moradi, E., Hashemi Tabar, M. et al. Developing a Bi-level programming model for water allocation based on Nerlove’s supply response theory and water market. Environ Dev Sustain 25, 5663–5689 (2023). https://doi.org/10.1007/s10668-022-02658-z

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