The resources scarcity have always been of the critical limitations in production process, hence to create a favorablelife, the human have no choice but to better use of existing facilities to produce more and with higher quality. The water is considered as most important factor in agricultural crops production. The aim of this research is to investigate the impact of water productivity on production function of canola in all Iran's provinces during 2005–2010 using panel data model. The results suggest that the water productivity has positive effecton production, that is, if the water productivity growths by 1 percent the production will increase by 65 percent. Also with growth of water intensity by 1 percent the production will increase by 64 percent. Thus,consideringthe effects ofwater productivityon the welfare of canola producers we can consider the policy of water productivity improvement as one of the appropriate economic policies for Iran's agricultural sector.
Scarcity, water productivity, production, canola
