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International Journal of Business and Management Study

Impacts of Water Pricing Variability on Optimality Conditions of Water-Crop Productivity and Revenues Maximization



One of the major daily challenging questions is how to manage the water resources around the globe? Currently, thirty-one countries face water stress and scarcity and over a billion people lack adequate access to clean drinking water. Crucial actions and serious measures should be taken in order to adjust or at least put back on track the deteriorating water resources conditions around the world. One way to enhance water usage is through the implementation of effective and efficient water pricing mechanisms that would lead to better water allocation policies and thus higher water use efficiency. The objective of this study is to assess the impact of applying different water pricing rates on the optimal cropping patterns and water productivity. Linear programming models were built and solved using LINDO software with a multitude of scenarios and sub-scenarios incorporating various constrains such as additional water provision and budget limitations. The study area includes the 700 irrigable dunums of the Agricultural Research and Education Center (AREC) of the American University of Beirut (AUB) in the Beqaa’ valley of Lebanon. Subscenarios including additional water supply in dry months and budget constraints were developed to test for higher sensitivity responses. Sets replicating the cropping pattern applied in AREC returned inferior results (i.e., lower net profit and crop water productivity values) when compared with other set that includes newly suggested crops. The net profits and water productivity were further increased under scenarios with additional water supply (i.e., Supplementary Irrigation). Reducing the budget constraints by almost 50% had no impacts on the cropping patterns for either set of scenarios, implying that water availability is more of binding constraint in our case that cash availability. Scenarios with a wider set of crops resulted in higher water productivity and net profit levels. The study developed models and the results of this study could serve as effective guiding tools in helping the decision makers to take optimal choices with respect to the use of the available water resources, once relevant data are incorporated.

No fo Author(s) : 2
Page(s) : 1 - 8
Electronic ISSN : 2372-3955
Volume 3 : Issue 1
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