Evaluating the financial efficiency of farmers, involving the economic value of water

Document Type : Research Paper

Authors

1 MSc Student

2 Associate Professor

Abstract

Since the agricultural sector is the largest consumer of water resources, it is important to determine economic value of water and financial efficiency of farmers. The purpose of this paper is to determine the economic value of water and financial efficiency of farmers in Khondab County, Markazi Province. In this study, the performance of four crops including wheat, barley, alfalfa and corn were calculated, involving a newly developed mathematical model. The average price of agricultural water has been determined using three methods: weighting methods based on the volume of water, the cultivated area, and the income for each plant. Among the methods, the method based on volume of water has selected as the most appropriate method. Financial efficiency was calculated for three modes including: free water, 10% of the calculated price, and the actual price of water from the farmer. Results show that financial efficiency is sensitive to changes in income more than changes in costs. Irrigation efficiency and financial efficiency are not similar in all cases. It is possible to perform pressurized irrigation if 10% of the calculated price would be received from farmers.

Keywords

References

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Iranian Journal of Agricultural Economics and Development Research
Volume 47, Issue 1
April 2016
Pages 141-150

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