The economic value of irrigation water in paddy farms categorized according to mechanization levels in Guilan province, Iran

The economic value of irrigation water is not considered as a highly affective criterion in water tariff system in Iran. To this end, proper measures and viable scientific and management solutions are very important for the optimal use of this input. This study aims to determine the economic value of irrigation water used in rice agriculture in Guilan province. For this purpose, production functional forms were utilized. In addition, determining the marginal product and its value led us to achieve economic value of irrigation water for farms with different mechanization levels. It is noted that the cross-section data used in this study were derived from questionnaires in the “production cost plan” of Iranian Ministry of Agriculture during 2013-2014 crop years. Generalized Leontief functional form was selected as the favorable form for the farms with high mechanization level. The economic value of irrigation water considered in these farms is 0.5108 $/m3. For the farms with low mechanization level, Translog functional form is chosen as the superior form whose final water economic value equals 0.5054 $/m3. Reviews of the statistical difference between the two groups showed significant differences between the economic values of water. Considering water scarcity in Iran and the existing difference between its tariff system and economic value, it is recommended that the present tariff system be reformed and economic value of irrigation water be considered in the corresponding tariff system.