Economic and environmental assessment of irrigation water policies: A bioeconomic simulation study

N. Lehmann, R. Finger

Research output: Contribution to journalArticleAcademicpeer-review

7 Citations (Scopus)

Abstract

We present a bioeconomic modeling approach that links the biophysical crop growth model CropSyst to an economic decision model at field scale. The developed model is used in conjunction with a genetic algorithm to optimize management decisions in potato production in the Broye catchment (Switzerland) in the context of different irrigation policy scenarios. More specifically, we consider the effects of water bans, water quotas, and water prices on water consumption, profitability, and the financial risks of potato production. The use of a genetic algorithm enables the direct integration of the considered decision variables as management input factors in CropSyst. We employ the farmer's certainty equivalent, measured as the expected profit margin minus a risk premium, as the objective function. Using this methodological framework allows us to consider the potential impacts of policy measures on farmers' crop management decisions due to their effects on both expected income levels and income variability. Our results show that the region's current water policy, which frequently prevents irrigation during hot and dry periods by banning water withdrawal, causes high levels of income risk for the farmer and increases the average water demand in potato production. In contrast, the implementation of an appropriate water quota could significantly decrease water consumption in potato production while allowing the farmer's certainty equivalent to remain at the same level as it is under the current irrigation water policy.
Original languageEnglish
Pages (from-to)112-122
JournalEnvironmental Modelling & Software
Volume51
DOIs
Publication statusPublished - 2014

Fingerprint

environmental assessment
Irrigation
irrigation
Economics
potato
economics
simulation
Water
water
income
genetic algorithm
Crops
crop
Profitability
Genetic algorithms
policy
Environmental assessments
water demand
profitability
catchment

Keywords

  • stochastic weather generators
  • evolutionary algorithms
  • management-practices
  • modeling approach
  • crop model
  • risk
  • climate
  • optimization
  • agriculture
  • yield

Cite this

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title = "Economic and environmental assessment of irrigation water policies: A bioeconomic simulation study",
abstract = "We present a bioeconomic modeling approach that links the biophysical crop growth model CropSyst to an economic decision model at field scale. The developed model is used in conjunction with a genetic algorithm to optimize management decisions in potato production in the Broye catchment (Switzerland) in the context of different irrigation policy scenarios. More specifically, we consider the effects of water bans, water quotas, and water prices on water consumption, profitability, and the financial risks of potato production. The use of a genetic algorithm enables the direct integration of the considered decision variables as management input factors in CropSyst. We employ the farmer's certainty equivalent, measured as the expected profit margin minus a risk premium, as the objective function. Using this methodological framework allows us to consider the potential impacts of policy measures on farmers' crop management decisions due to their effects on both expected income levels and income variability. Our results show that the region's current water policy, which frequently prevents irrigation during hot and dry periods by banning water withdrawal, causes high levels of income risk for the farmer and increases the average water demand in potato production. In contrast, the implementation of an appropriate water quota could significantly decrease water consumption in potato production while allowing the farmer's certainty equivalent to remain at the same level as it is under the current irrigation water policy.",
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Economic and environmental assessment of irrigation water policies: A bioeconomic simulation study. / Lehmann, N.; Finger, R.

In: Environmental Modelling & Software, Vol. 51, 2014, p. 112-122.

Research output: Contribution to journalArticleAcademicpeer-review

TY - JOUR

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AU - Finger, R.

PY - 2014

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AB - We present a bioeconomic modeling approach that links the biophysical crop growth model CropSyst to an economic decision model at field scale. The developed model is used in conjunction with a genetic algorithm to optimize management decisions in potato production in the Broye catchment (Switzerland) in the context of different irrigation policy scenarios. More specifically, we consider the effects of water bans, water quotas, and water prices on water consumption, profitability, and the financial risks of potato production. The use of a genetic algorithm enables the direct integration of the considered decision variables as management input factors in CropSyst. We employ the farmer's certainty equivalent, measured as the expected profit margin minus a risk premium, as the objective function. Using this methodological framework allows us to consider the potential impacts of policy measures on farmers' crop management decisions due to their effects on both expected income levels and income variability. Our results show that the region's current water policy, which frequently prevents irrigation during hot and dry periods by banning water withdrawal, causes high levels of income risk for the farmer and increases the average water demand in potato production. In contrast, the implementation of an appropriate water quota could significantly decrease water consumption in potato production while allowing the farmer's certainty equivalent to remain at the same level as it is under the current irrigation water policy.

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