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A multi-period positive mathematical programming approach for assessing economic impact of drought in the Murray–Darling Basin, Australia

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  • Qureshi, M. Ejaz
  • Ahmad, Mobin-ud-Din
  • Whitten, Stuart M.
  • Kirby, Mac

Abstract

In the last decade, the Murray–Darling Basin (MDB), Australia faced a severe drought which affected its agriculture production. Sustainable diversion limits as proposed in the Australian Government's basin plan together with climate change are expected to impact on future agriculture production and development in the MDB. We developed a biophysical–economic mathematical model calibrated against the observed multi-period land use data utilising the positive mathematical programming (PMP) approach to evaluate the impacts on agricultural production activities of a range of climate events and policy options. This is an extension of our previous work where the model was calibrated against a single year and the focus was on the southern MDB only. The multi-period calibrated model has strong predictive capacity as it matches simulated irrigated area, water use and gross value of irrigated agricultural product (GVIAP) well with the observed irrigated land, water use and GVIAP for all the crops in all the regions of the MDB across the highly variable climatic conditions from 2005 to 2009. The approach will be useful in assessing economic impacts of climate change on irrigation, farmers' adaptation options and/or water policies including water markets and irrigation efficiency improvement.

Suggested Citation

  • Qureshi, M. Ejaz & Ahmad, Mobin-ud-Din & Whitten, Stuart M. & Kirby, Mac, 2014. "A multi-period positive mathematical programming approach for assessing economic impact of drought in the Murray–Darling Basin, Australia," Economic Modelling, Elsevier, vol. 39(C), pages 293-304.
    • Handle: RePEc:eee:ecmode:v:39:y:2014:i:c:p:293-304
    DOI: 10.1016/j.econmod.2014.02.042
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    2. Henderson, Benjamin & Cacho, Oscar & Thornton, Philip & van Wijk, Mark & Herrero, Mario, 2018. "The economic potential of residue management and fertilizer use to address climate change impacts on mixed smallholder farmers in Burkina Faso," Agricultural Systems, Elsevier, vol. 167(C), pages 195-205.
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    5. Rianne van Duinen & Tatiana Filatova & Peter Geurts & Anne van der Veen, 2015. "Empirical Analysis of Farmers' Drought Risk Perception: Objective Factors, Personal Circumstances, and Social Influence," Risk Analysis, John Wiley & Sons, vol. 35(4), pages 741-755, April.
    6. Samira Shayanmehr & Jana Ivanič Porhajašová & Mária Babošová & Mahmood Sabouhi Sabouni & Hosein Mohammadi & Shida Rastegari Henneberry & Naser Shahnoushi Foroushani, 2022. "The Impacts of Climate Change on Water Resources and Crop Production in an Arid Region," Agriculture, MDPI, vol. 12(7), pages 1-22, July.
    7. Paris, Quirino, 2017. "Cost function and positive mathematical programming," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 6(1), May.

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