The growing need for sustainable management of water resources has introduced the implementation of water pricing as an indirect method for efficient and sustainable water use. Agriculture is the main consumer of water worldwide but in many countries it is also a very fragile socioeconomic sector. Within this sense, the paper examines the effect of irrigation water pricing on water demand and on farmers' income. The derivation of a demand function through a linear programming model is the most common approach as it is relatively easy to be implemented and has limited data requirements. However, this method does not allow for a possible reduction of water consumption from the maximum level of water productivity in order to attain the maximum economic outcome. Thus, a non-linear model was formulated in order to estimate the best allocation of water and land resources for each crop. The results show significant differences between the two models (the linear and the non-linear), especially at high water prices.

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