Observatorio de I+D+i UPM

Memorias de investigación
Research Publications in journals:
Optimization of water procurement decisions in an irrigation district: the role of option contracts
Year:2015
Research Areas
  • Agriculture
Information
Abstract
Water supply instability is one of the main risks faced by irrigation districts and farmers. Water procurement decision optimisation is essential in order to increase supply reliability and reduce costs. Water markets, such as spot purchases or water supply option contracts, can make this decision process more flexible. We analyse the potential interest in an option contract for an irrigation district that has access to several water sources. We apply a stochastic recursive mathematical programming model to simulate the water procurement decisions of an irrigation district?s board operating in a context of water supply uncertainty in south-eastern Spain. We analyse what role different option contracts could play in securing its water supply. Results suggest that the irrigation district would be willing to accept the proposed option contract in most cases subject to realistic values of the option contract financial terms. Of nine different water sources, desalination and the option contract are the main substitutes, where the use of either depends on the contract parameters. The contract premium and optioned volume are the variables that have a greater impact on the irrigation district?s decisions. Key words: Segura Basin, stochastic recursive programming, water markets, water supply option contract, water supply risk.
International
Si
JCR
Si
Title
Australian Journal of Agricultural And Resource Economics
ISBN
1364-985X
Impact factor JCR
1,065
Impact info
Volume
1
Journal number
60
From page
130
To page
154
Month
SIN MES
Ranking
Participants
  • Autor: Dolores Rey (Cranfield Water Science Institute, Cranfield University (UK).)
  • Autor: Javier Calatrava (Universidad Politécnica de Cartagena)
  • Autor: Alberto Garrido Colmenero (UPM)
Research Group, Departaments and Institutes related
  • Creador: Grupo de Investigación: Economía Agraria y Gestión de los Recursos Naturales
  • Departamento: Economía Agraria, Estadística y Gestión de Empresas
  • Centro o Instituto I+D+i: Centro de Estudios e Investigación para la Gestión de Riesgos Agrarios Medioambientales (CEIGRAM). Centro Mixto UPM-AGROMUTUA-ENESA
S2i 2020 Observatorio de investigación @ UPM con la colaboración del Consejo Social UPM
Cofinanciación del MINECO en el marco del Programa INNCIDE 2011 (OTR-2011-0236)
Cofinanciación del MINECO en el marco del Programa INNPACTO (IPT-020000-2010-22)