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Insights from a Calibrated Optimization Model for Irrigated Agriculture under Drought in an Irrigation District on the Central Mexican High Plains

1
Department of Civil and Environmental Engineering, University of California, Merced, 5200 Lake Road, Merced, CA 95340, USA
2
División de Ciencias Económico-Administrativas, Universidad Autónoma Chapingo. Km 38.5 carretera México-Texcoco, Texcoco de Mora, Estado de México 56230, Mexico
3
Economía, Colegio de Postgraduados, Campus Montecillo. Carretera México-Texcoco. Km. 36.5. Montecillo, Estado de México 56230, Mexico
*
Author to whom correspondence should be addressed.
Water 2019, 11(4), 858; https://doi.org/10.3390/w11040858
Received: 21 January 2019 / Revised: 23 February 2019 / Accepted: 17 April 2019 / Published: 24 April 2019
(This article belongs to the Special Issue Hydroeconomic Analysis for Sustainable Water Management)
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Abstract

An economic assessment of the value of agricultural water was conducted at the subdistrict (module) level within the Alto Rio Lerma Irrigation District 011 in Guanajuato, Mexico. The assessment employed positive mathematical programming (PMP), a deductive valuation methodology, which self-calibrates to baseline production input use. Production and water use values for the 2016–2017 agricultural year, and the averages of the 2014 to 2017 agricultural years for yields, agricultural commodity prices, and production costs were employed disaggregated per irrigation module. Results indicate that the economic value of water is 1.8 to 4.7 times higher than the rate currently paid by users, about US$7.89 dam−3 (cubic decameters). The differences among the rate and shadow prices could create a pricing water policy focused on water conservation and its efficient use. This work also conducts an assessment of a formal water market in the irrigation district as way to achieve economically efficient water allocations and reduce the potential economic impacts of water shortage during droughts. Modeling results show that an active water market would allow the irrigation district to adapt to scarcer water conditions by shifting cropping patterns and trading water among subdistricts, by reducing loss in net income at the irrigation district. A successful implementation of this system would be feasible, provided that the irrigation modules are able to import and export water, under water scarcity scenarios considered for the water market model. Potential distributional effects and policy insights from this assessment are discussed. View Full-Text
Keywords: positive mathematical programming; irrigation water; drought; water markets; Guanajuato; Mexico positive mathematical programming; irrigation water; drought; water markets; Guanajuato; Mexico
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This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).
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Rodríguez-Flores, J.M.; Medellín-Azuara, J.; Valdivia-Alcalá, R.; Arana-Coronado, O.A.; García-Sánchez, R.C. Insights from a Calibrated Optimization Model for Irrigated Agriculture under Drought in an Irrigation District on the Central Mexican High Plains. Water 2019, 11, 858.

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