use remain unchanged in this scenario which liberalizes national irrigation water trade. It is called _National Irrigation Market_ . This scenario equalizes irrigation water shadow process both within and between all WMA‘s and thus establishes a national general equilibrium SP; (III) Introducing increased competition for water from predicted expansions in non-agricultural uses and rapid urbanization through rural to urban migration. Under this scenario there is no liberalization of water markets. It assumes that urbanization and industrial expansions will greatly increase urban water demand in the future. It is called _Water-Restricted –Urbanization_ ; and finally, (IV) Liberalizing water markets allowing for market-based water transfers out of irrigated agriculture to municipal areas to meet the growth in demand for domestic and industrial use introduced under scenario III. It is expected to transfer significant amounts of water out of irrigation agriculture leading to declines in agricultural GDP, rural employment and incomes. This scenario is called _Water-Liberalized Urbanization_ .

The quantitative results can be found in Hassan et al. (2008) tables 1-21. In Table 6 below the reader can find the impact matrix of the 4 simulated policy scenarios in South Africa on major variable. The interesting finding is that some of the policies such as those that favor urbanization further polarize the competition between the rural and the urban sector in the country, which will be discussed in the conclusion section.

# **Empirical features for Turkey Structure of the CGE Model for Turkey**

The Turkish CGE model includes the three main sectors in the Turkish economy, namely the production activities, the institutions, and the foreign sector. The model disaggregates the economy into 20 agricultural and 9 non-agricultural activities. Agricultural activities are categorized by field crops, livestock, fishing and forestry (classified as ̳other agriculture‘). Nonagricultural activities include mining, consumer manufacturing, food manufacturing, intermediates and capital goods, electricity and gas, water, construction, private services and government services.

Of the agricultural activities, field crops and livestock are further disaggregated into production in four main regions and one micro region of the country: West, East, Central, Southeastern, and the micro-region, LSCB (Lower Seyhan-Ceyhan Basin). Fishing, forestry and non-agricultural activities remain at the national level. The institutions sector includes households, the government and the Water User Associations (WUA). Households are disaggregated into rural and urban households. Rural households are further disaggregated according to their geographical location. The model includes five rural households and one urban household type. Import, export and tariffs concerning the 25 EU countries and the rest of the world constitute the foreign sector of the model.

According to Cakmak et al (2008:29), ―Production technology in each activity is defined by a CES function of value added and aggregate intermediate input use. The value added in each activity is given by a CES production function of factors used (labor, capital, irrigated land, rainfed land and water, if applicable). Aggregate domestic output is distributed among domestic use and exports (EU and rest of the world). All producers take factor and commodity prices as given, and are all profit maximizers. Urban and rural household types in each region have a simple consumption pattern in the sense that they devote a fixed share of expenditures on each consumption item. Each household type has a different consumption pattern depending on household income and savings. Implicitly in this structure, households are assumed to minimize expenditures on consumption, taking as given the price of each commodity. Urban households earn income from labor services and capital rent, while each rural household earns income from services of labor and capital, as 36