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

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.