Where α and βare the intercept and slope of the demand function for crop i; Liis the
land allocated to crop i; yi is yield of crop i; ai is coefficient between water and yield of crop i;
zij is quantity of other inputs j required for crop i per unit land; bij is coefficient between other
inputs j and yield of crop i; pi is price for output crop i; rj is price vector for input factor j ; Zj is
available input levels for input factor j ;Qi is the PMP coefficient for crop i; Di and Si are the
demand and supply of crop i, respectively. λis the water shadow price.
Equation (1) is the objective function of the producers’ and consumers’ maximization
problem. Equation (2) defines the cost function on crop i, and equation (3) is the demand and
supply balance. Equation (4) is the available land constraint. Equation (5) is the constraint on
available irrigation water. The levels of the constraint are varied between the interval [0, W*],
where W* is the maximum water capacity. Each iteration yields a new water shadow price (λ).
Equation (6) is a constraint for other input factors, and equation (7) is the non-negativity
constraint on land.
Data sets covering production and market dimensions have been used in the research
models to describe the characteristics of the Egyptian and Moroccan agricultural sector.
Irrigation water cost recovery data, which will be used for the water pricing policy scenario, is
from the existing literature.
The data set for Agricultural Sector Model of Egypt (ASME) covers 1999 national and
regional levels of land, labor, water resource availability and requirement, yields and fodder
byproducts. The production of 27 crop commodities and 5 animal commodities in 8 regions are
included in the model. The ASME has updated prices and cropping patterns to 2001.
The Moroccan data from Agricultural Sector Model of Morocco (ASMM) covers
national and regional levels. There are 50 crop and 7 animal commodities in the model along