Optimizing the cropping structure is of great significance for ensuring efficient water use and ecological sustainability in irrigation districts experiencing water shortages. However, how farmers choose the crops to plant under the intervention of factors such as behavioral economics and policies has been less considered in agricultural land-use planning. This study proposes an agent-based socio-hydrological model embedding a geographic information system (ABSHM-GIS). In ABSHM-GIS, a bottom-up research methodology coupled with farmers’ behavioral economics and government policies is used to examine the factors influencing farmers’ cropping structure and the impact of cropping decisions on farmers’ income and the spatial and temporal distributions of water resources. In this study, ABSHM-GIS was applied in the context of planting structure and crop subsidy policy in Qira oasis, Xinjiang, China as a case study area. Results showed that government intervention in cropping structure was effective in reducing water use for agricultural irrigation (18–30 million m3/year) relative to farmer intervention, but it also reduced farmer returns (17,850–25,860 yuan/ha). During the period of agricultural irrigation, regulating the increase in the lower residual volume of irrigation gates 2–4 in the range of 666–869 m3/day and that of irrigation gates 5–9 in the range of 211–342 m3/day could effectively ensure the even spatial distribution of surface water and groundwater. In the planting structure, an increase in government subsidy by 300 yuan/ha could save an average of 2 million m3/year of water resources for ecological water use to ensure ecological safety. The behavioral economics showed that the learning factor was the main behavioral factor that changed the decision-making behavior of farmers. The ABSHM-GIS model proposed in this paper could help researchers reveal the causes and provide insights into the emergence of macro-patterns, such as changes in cropping structure and irrigated agriculture, as a result of microfarmers’ economic behavior in a bottom-up research approach.