The first regional water market scheme operating in Khaf County of Iran’s Khorasan Razavi Province since last July is a win-win solution to alleviate water scarcity in drought-stricken regions, the project manager said.
“Setting up water markets where buyers and sellers trade water rights through short- and long-term leases will help better manage surface and ground resources that are dwindling rapidly,” Babak Hassani was also quoted as saying by ILNA.
The scheme allows farmers to sell their excess water share to industrialists in the county, through which they can earn money and equip their fields with new farming and irrigation facilities to boost productivity, he added.
Mining industries in the dry area can develop sustainably, as they do not need to drill deep water wells to meet their requirements.
According to the official, iron ore mines in Khaf County gobble up at least 10 million cubic meters of water annually and the figure is projected to triple over the next five years.
“A water crisis looms in the area and if industries keep tapping into diminishing ground resources, the dire consequences can be irreversible. There is no time to practice trial and error methods in the key water sector and creative approaches, such as water markets that have been long in use in Spain, Australia and the US, have proved effective,” he said.
“This system permits farmers and industrialists to buy and sell water that can be within catchments, between catchments or along rivers depending on actual need. Water trading has become a vital business tool for farmers in many countries.”
Geological studies warn that the shortage of this natural resource in Iran is worsening despite having a network of rivers, most of which originate in the rugged mountain regions and flow into interior basins. Nineteen rivers flowing along Iran's international boundaries are shared with six neighbors.
Hassani said water markets encourage more efficient water use, as well-structured markets can augment water conservation efforts that have made little progress so far.
Such markets will help boost the allocation of more water to productive economic sectors. The farming sector, for instance, uses more water relative to its economic output than other sectors.
"Of the total consumption, 90% are used in the agriculture sector, while households and industries account for 7% and 3%, respectively," he said, echoing the growing concern of conservationists and economic experts in Iran about the poor agro performance and the cost it is imposing on the economy saddled by growing problems.
Intense Shortage
Water markets will very likely draw greater attention, as shortages become more frequent and intense, the official said.
Such markets constitute a regional-friendly measure to help alleviate paucity and for the same reason, academicians, conservationists and water experts are supporting such measures.
When consumers and those in charge concur that water is a precious economic commodity, regions can make efficient use of market instruments to flexibly reduce overexploitation of existing resources, rethink consumption patterns and increase efficiency.
An added advantage, Hassani said, is that when jurisdictions move from a centralized allocation of limited surface and underground water to market instruments, users are likely to be more cautious about the valuable resource and consume it with utmost care.
According to Mohammad Borzouei, the head of water resources’ affairs in the provincial water company, the pace at which groundwater resources are depleting has become a serious source of concern and combating illegal water wells could be a preventive measure.
“Of the 4,000 illegal wells in the province, 2,000 were sealed in 2020, which helped save 62 million cubic meters of water,” he said.
With 7 million people, the province is a big and populous region. More than 30 million domestic and foreign pilgrims annually visit Mashhad, the provincial capital and Iran’s most important shrine city.
Borzouei said close to 97% of the province’s water are supplied by underground resources, which explain why extraction from renewable resources is critical, as 25% of what are being consumed now belong to future generations.
