Narrow Results

Severe water shortage and stress in pistachio farming areas of Iran have made pressurized irrigation systems unavoidable. Despite extensive subsidies, the adoption rate of these systems remains below 10% in pistachio orchards in Iran. This study employs logit, OLS and analysis of variance models to investigate the barriers to adopting pressurized irrigation systems in pistachio orchards in Kerman Province, Iran. Accordingly, all factors affecting the acceptance of pressurized irrigation systems were identified using research theory and the results of past studies. This study was accompanied by two innovations: first, analyzing both significant and non-significant influential factors in the logit model, and second, finding the roots of this influence. The results indicate that small-scale pistachio orchards, non-scientific horticulture systems, high-density planting, poor water quality and low farmers’ knowledge about irrigation systems are among the obstacles hindering the acceptance of pressurized irrigation systems. Additionally, energy subsidies for cheap water extraction, unclear and complex land ownership laws, water use permits, prohibition of transfer and trade of water, and lack of water market have been significant barriers to the adoption of new irrigation systems in pistachio orchards. Therefore, the Iranian government should reform the anti-technology structure of the agricultural sector, clarify water laws and regulations and modify water policies to incentivize the adoption of water-saving technologies.

Fossil fuel subsidies are widespread in developing countries, where reform efforts are often derailed by disputes over the likely distribution of gains and losses. The impacts of subsidy reform are transmitted to households through changes in energy prices and prices of other goods and services, as well as through factor earnings. Most empirical studies focus on consumer expenditures alone, and computable general equilibrium analyses typically report only total effects without decomposing them by source. Meanwhile, analytical models neglect important open-economy characteristics relevant to developing countries. In this paper, we develop an analytical model of a small open economy with a preexisting fossil fuel subsidy and identify direct and indirect impacts of subsidy reform on real household incomes. Our results, illustrated with data from Viet Nam, highlight two important drivers of distributional change: (i) the mix of tradable and nontradable goods, reflecting the structure of a trade-dependent economy; and (ii) household heterogeneity in sources of factor income.