Role of uncoordinated policy making in unsustainable pistachio acreage expansion with regard to water resources

    In this study, using time series data from 1981 to 2004, the impact of uncoordinated policy making on unsustainable pistachio acreage expansion in Iran was analyzed. The results indicated that independent and uncoordinated policy making in macro economy, water resources and agriculture sectors, have reduced welfare gains and have caused unsustainable expansion of pistachio acreage in Iran. The results of simulation model showed that motivational policies for water resources protection, such as water tax, work successfully if and only if the discount rate is low and economy is stable. In other words, with high discount rate, it is better to use legal controlling tools. The results, also, showed that an increase in pistachio price, because of non oil export inducing policies in agricultural sector, will enhance welfare gains and establish sustainable development if and only if water resources protection policies are intensified simultaneously. Thus, policy making in one sector, ignoring the others, will decrease welfare gains and will expand pistachio acreage unsustainably. The current conditions in pistachio producing regions in Iran indicated that pistachio acreage was expanded unsustainably in the past. At the end of the study, a compromise programming model was introduced for determining optimal level of each policy in each sector.     JEL Classification : Q01, Q18, Q25, Q28, R13