VALUATION OF GROUNDWATER EXPLOITATION OF AGRICULTURAL CASE STUDY OF WHEAT FARMERS IN KHATAM CITY

Country with an annual average rainfall of 250 mm is faced with the problem of dehydration and non-uniform distribution of water resources. Scarcity of water on the one hand, and the enormous costs on the other hand, is considered productivity and economic value of water as one of the most important national goal. Consumption of Water in agricultural sector includes about 90 percent of the country´s water consumption, so the economic value of water in agriculture is one of the most important priorities in water resources management. In this study the economic value of water by considering methods of calculate, methods based on basic function of social welfare witch economic value of water for production of Wheat in Yazd (Heart - khatam) was analyzed required data and information is collected from 100 questionnaires using two-stage cluster sampling in 1387. For estimation of functions is used from Eviews5 software. The results show decreasing scale in the region. Also marginal production of factors so that water, labor and pesticides evaluated respectively 1.4, 65 and 1113 kg per unit. Producers are willing to sacrifice to 0.228 unit of labor (or sacrifice to 0.0067 unit of pesticides). Marginal production-factor price ration for water, labor and pesticides are 0.0049, 0.0005 and 0.0159 respectively. Actual results (economic) value of water is 12,593 Rials witch difference significantly with current value (277.4 Rials) in region that leading to excessive withdrawal of groundwater water in region. The shadow price of labor and pesticides are 604,500 and 10,350,900 Rials respectively. Price and income elasticity of water derived demand are 15.33 and 45.329 respectively. JEL Classifications : C13, C20, D21, Q11, Q25, Q34. Key words: Cobb Douglas production function, economic value, efficiency to scale, demand elasticity, Yazd province, Khatam-Heart.