Bio-economic modelling to assess the impact of water pricing policies at the farm level in the Oum Zessar watershed, southern Tunisia

Abstract

For integrated assessment at farm level, the Farm System SIMulator model (FSSIM) was used. FSSIM is a bio-economic model developed for the European context, and was adapted and tested for Tunisian conditions to assess, ex-ante, impacts of water pricing policies at the farm level to the year 2015. The results show that all farm types are strongly dependent on the water pricing policy. Farmers that have private irrigation systems and pay for pumping mainly, are more sensitive to the progressive increase of irrigation water costs compared to farms that obtain water from public irrigation systems, who pay for the amount of water received. A sensitivity analysis showed that increasing the water price with more than 17% is not advisable to local decision makers, because the net income continued to decline, while the water consumption remained stable with further increases. Hence, there is no further gain in terms of water saving. Overall, intensive agricultural systems with private irrigation systems seem more vulnerable and unsustainable and therefore the extension of public irrigation systems and semi-intensive agriculture is recommendable to improve the sustainability of agriculture in this arid zone.