1. Introduction In Tunisia, irrigated agri- culture represents 35% of the output value derived from the agricultural sec- tor, 20% of exports and 27% of agricultural em- ployment. Irrigated areas contribute 95% of the plant production, 70% of the fruit and 30% of the dairy (Ministry of Agricul- ture and Water Resources, 2003). For these reasons, policy makers are interest- ed to develop the irrigated agriculture on the majority of the Tunisian territory through its importance in ensuring food security and its contribution to social welfare of farmers particu- larly in the rural area. Tunisia has 411.4 thou- sand hectares of irrigated land. Tree crops come first, with an area of 152.6 thousand ha (37% of the total surface), vegetables second (30%), followed by forages (16%), cereals (16%), and other industrial crops (1%). The industrial and tourism sectors use 5% and 1% of water re- sources, respectively. The drinking water service uses 11% in the rural area (Dhehibi et al., 2007). But the expansion of irrigated agriculture, the intensification and com- petitive sectors have led to the overuse of the ma- jority of groundwater in Tunisia. Taking into ac- count the limited water resources and the frequent disparity between supply and demand during dry seasons, Tunisia has en- gaged in the recent years on a program of sustain- ability management of water resources. The ob- jective of this program is to save water potential in all economic sectors par- ticular in the agricultural sector. The next para- graph presents a brief overview of water poli- cies in Tunisia. 2. Overview of wa- ter policies in Tunisia During the first period, water management policy concentrated on the mobi- lization of water re- sources and the imple- mentation of required in- frastructure to the distri- bution of these resources all over the country. This has contributed to extend irrigated areas, intensify, diversify and regulate the agricultural systems. The second period of water manage- ment has been marked by the development of the industrial and tourism sectors as competitors to the traditional water consuming sector (Al Atiri, 2004). Agriculture in addition to increased demand for water is a result of newly created areas and intensification efforts. The demand for water has increased substantially. Therefore, the new water policy has Economic analysis of water demand in public irrigation systems in Tunisia, using FSSIM model Houcine JEDER a , Ahmed Ben KHALIFA b , Mongi SGHAIER a Abstract Water resources in dry areas in Tunisia are under strong pressure, which serious- ly threatens their sustainability. This situation may get worse over the years, espe- cially with the climate change and the intensification of agricultural practices, if the concretes measures are not taken into account. Water pricing has been a key of the water policy in Tunisia for the last two decades to saving water. It depended on the characteristics of the irrigated farming in these dry areas. The objective of this paper is to assess the impact of water-policy on water demand for the farming in three different public irrigated systems. Bio-economic model, such as Farming Sys- tem SIMulator (FSSIM), has been applied for this impact analysis. The main re- sults from the analysis of the demand curve show that the flexibility of the crop plan and competition between irrigated crops are linked to the land constraint, in par- ticular irrigable land. These results show also that the determination of an incen- tive price for the use of new irrigation technologies is located on the segment where the function of the demand is elastic. In this segment, the farmer‘s behavior be- comes more rational to save water in arid zones like in the south of Tunisia where the water is a limiting factor for the irrigated agriculture. Keywords: irrigated land; water pricing, bio-economic model, impact analysis, water demand. Résumé Les ressources en eau dans les zones arides de la Tunisie sont sujettes à de fortes pressions qui menacent sérieusement leur durabilité. Cette situation risque de s’ag- graver au fil des années avec les changements climatiques et l’intensification de la pratique agricole. La tarification de l’eau demeure l’un des instruments de régula- tion le plus utilisé en matière d’économie d’eau au cours de ces dernières décen- nies. L’objectif de ce papier est d’apprécier, à travers une étude de cas, l’impact de la politique de tarification de l’eau d’irrigation sur la demande en eau pour l’ex- ploitation agricole dans trois différents périmètres publics irrigués. Le modèle bio- économique FSSIM «Farming System SIMulator» a été appliqué pour cette analy- se d’impact. Les principaux résultats de l’analyse de la courbe de demande en eau d’irrigation montrent la flexibilité de plan d’occupation du sol par les cultures et la compétitivité entre les cultures irriguées qui est contrariée par la disponibilité de la terre, en particulier la terre irrigable. Les résultats montrent aussi que la détermi- nation d’un prix incitatif pour l’utilisation des nouvelles technologies d’économie d’eau d’irrigation est localisée dans la partie du segment élastique de la courbe de la demande. Dans cette partie du segment élastique, le comportement de l’agricul- teur devient plus rationnel pour mieux économiser l’eau d’irrigation, en particulier en ces zones arides comme le sud tunisien, où l’eau est un facteur limitant pour l’a- griculture irriguée. Mots clés: terre irriguée, tarification de l’eau, modèle bioéconomique, analyse d’impact, demande en eau. 46 a Laboratoire d’Economie et Sociétés Rurales. Institut des Régions Arides IRA, Médenine, Tunisie. b Unité de recherche Environnement Ressources Naturelles Agricultu- re, Faculté des Sciences Economiques et de Gestion, Tunis, Tunisie. Jel Classification: Q12, C61 NEW MEDIT N. 4/2014