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Abstract

Economic values of water for the main Public Irrigation Schemes in the sub-middle region of the São Francisco River Basin, in northeastern Brazil, are determined in this study using an integration of a global agro-economic land and water use (MAgPIE) with a local economic model (Positive Mathematical Programming). As in the latter, the water values depend on the crops grown, and as Brazilian agriculture is strongly influenced by the global market, we used a regionalized version of the global model adapted to the region in order to simulate the crop land use, which is in turn determined by changes in global demand, trade barriers, and climate. The allocation of sugarcane and fruit crops projected with climate change by the global model, showed an impact on the average yields and on the water costs in the main schemes resulting in changes in the water values locally. The economic values for all schemes in the baseline year were higher than the water prices established for agricultural use in the basin. In the future, these water values will be higher in all the schemes. The highest water values currently and in the future were identified in municipalities with a significant proportion of area growing irrigated sugarcane. Being aware of current water values of each user in a baseline year and in a projected future under global climate and socioeconomic changes, decision makers should improve water allocation policies at local scale, in order to avoid conflicts and unsustainable development in the future.