Water demand management for date palm orchards: the use of water pricing policy

Groundwater resources are the main source of water supply to the date palm orchards in Saravan County, Iran. The demand function is estimated using the Translog cost function and cost share equations of inputs. Results show that the real price of water is much more than the price paid by orchard owners. The substitution elasticity of water for the date crop shows its strong substitution with other inputs, but its price elasticity with other inputs is weak. In addition, the price elasticity is expectedly negative for water, but it is smaller than one and the demand (- 0.03) is inelastic.

Automated summary

The study reveals that date palm orchards in Saravan County, Iran heavily rely on groundwater resources, with the actual price of water being much higher than what orchard owners pay. Water shows strong substitution elasticity with other inputs, but weak price elasticity. The demand for water is inelastic, with a price elasticity of -0.03.