For on-farm decision-making in salinity affected water deficit regions, a hydro-economic analysis helps
developing consistent resource management plans considering biophysical and economic constraints.
However, variability of crop prices and yields is a practical difficulty when valuating resources. In this
study, we proposed a novel hybrid framework that considers variable crop prices and yields to develop
resource allocation strategies using a risk-based economic model. The FAO AquaCrop model and a linear
regression model were used for yield simulation and price estimation, respectively. The predicted
variability of crop prices and yields from these models are incorporated into the risk-based economic
model. The hydro-economic analysis was conducted for making producers’ pre-season decisions on land
and water allocations in salinity-affected agricultural lands in south central Utah. The results showed
alfalfa-dominant land and water allocation strategies are suitable options due to the high price and low
production costs of alfalfa under high surface water availability. With limited surface water availability,
the results opted to rent water rights to soils with high maize productivity for higher profits. The risk
aversion behavior led to land and water allocation strategies with less variable profits. It was also found
that the salinity stress severely degraded water productivity. The proposed approach provide a framework
to manage resources for agricultural production in salnity affected and water deficits regions under
variable price and climatic conditions.