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

Pricing policies play an important role in water demandmanagement and its optimal allocation. determining properwater price leads to optimal allocation of water especially inagricultural consumptions. applying new subsidy targeting lawin iran which insists on pricing water based on its supply cost,will effects considerably on water resource management inagriculture sector. so, in this study, different irrigation waterpricing methods is investigated and proper irrigation waterprice is determined using survey data for 2010-2011 farmingyear in golestan province of iran. at the first step using econometricapproach, economic value of irrigation water in differentagriculture crops is determined that shows demand side pricefor water. then, supply cost of surface and ground water is calculatedusing accounting approach which shows supply sideprice for irrigation water. finally, economic value and supplycost of irrigation water compared and different water pricingmethods is evaluated. results indicated that, weighted averageof economic value and supply costs of irrigation water ingolestan province were 1795 and 1399 irr per cubic meter,respectively. so, improvement of water demand and supplymanagement could be achieved using price policies.