Alternative pricing for irrigation water management in the context of climate change

Abstract

Abstract Irrigation water pricing is an economic regulation instrument widely used in agriculture. Constant annual pricing is always criticized by local decision-makers as well as scientific researchers because it does not take into account the seasonal availability of water in the context of climate change. This study proposes a mathematical programming model to test alternative seasonal pricing scenarios in the context of climate change. This model is applied at farm level in the Kalâa Kebira region of East-Central Tunisia. The results show that summer seasonal pricing was economically beneficial for large farms, while winter pricing was beneficial for small and average farms. Water savings were only possible for small farms using 89% of available water in summer and for average farms using 93% of available water in winter. On the other hand, the sensitivity test proved that when water demand is elastic, increasing seasonal pricing of irrigation water by a rate between 20 and 30% generates water savings for different types of farms. This seasonal water saving is also accompanied by optimal use of agricultural labor and diversity of cultivated areas.