Pricing irrigation water for drought adaptation in Iran

• Alternative policies are examined to assure food security from irrigation in the face of water shortages.
• Two-tiered water pricing is compared to existing policies for pricing and allocating water in Central Iran.
• An integrated water management framework if developed for policy analysis at the basin scale.
• Results show that two-tiered pricing can be economically efficient and equitable.
• Two tiered pricing is shown to meet cost recovery objectives.

SummaryThis paper examines alternative water pricing arrangements that better manage and more accurately reflect conditions of increased water scarcity experienced during drought in Iran. A comprehensive water balance and crop use model compares the existing below cost water pricing model with an alternative two-tiered pricing approach. The tiers reflect two uses of irrigation water. The uses are (1) subsistence level crop production from farm household production of crops for food security and (2) discretionary cropping. Results of the study offer evidence for a reform of Iranian water pricing principles, subject to caveats described by the authors.