The irrational use of water in agriculture is often responsible for several problems concerning the depletion and/or the pollution of water resources. In these cases specific policy measures should be taken to protect water resources from harmful agricultural activities, mitigating at the same time their potential impact on farmers’ welfare. To this end, a multicriteria decision-making model is formulated that aims at allocating efficiently water and land resources in a rural area of Greece, by optimizing a set of important socio-economic and environmental objectives. According to the model’s output, past and current decisions on irrigated agriculture turned out to be oriented towards meeting exclusively the socio-economic objectives. Yet, there are several other possible allocations schemes that could be applied in order to improve the performance of environmental indicators and to contribute to a more sustainable use of natural resources.Moreover, the decision-making model can be further employed to assess a number of additional policy measures in irrigated agriculture. In this framework, the outcome of imposing various water pricing policies was evaluated. The efficiency of these policies was found tightly connected to the elasticity of water demand. Namely, higher elasticity seems to enhance the flexibility in resource allocation and the movement towards environmental objectives.

Reprinted with Permission from Springer's Open Choice