With some agri-environmental restrictions, municipal wastewater can be utilized for agricultural irrigation and river rehabilitation. This paper develops a single-year planning model for a region in Israel which consists of a city and three potential wastewater consumers. The model incorporates, in one endogenous system, the economic, physical and biological relationships in the water-soil-plant environment system and its objective is to maximize the regional social welfare composed of the sum of agricultural and environmental net benefits. The model determines the optimal crop mix and the optimal allocation of the limited water and land resources among all potential users. Then, different allocation approaches from the concept of transferable utility games are applied to determine a reasonable and fair allocation of the additional net benefits which will be accepted by the players. The results support the collaboration among the economic entities and indicate economic and environmental advantages which can serve the decision-makers.


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