EVALUATING DIRECT BENEFIT ESTIMATION PROCEDURES FOR IRRIGATION PROJECTS: A SIMPLIFIED APPROACH1

ABSTRACT: An integral part of evaluating the net benefits generated by an existing or proposed irrigation project is the assessment of the associated impacts in commodity markets. Traditionally, these impacts have been measured by either assuming no change in commodity prices and calculating net returns to project farmers, or by allowing commodity prices to fall in accordance with a given elasticity of demand and subtracting commodity production costs from the associated area under the commodity demand curve. In either case, it is implicitly assumed that supply is perfectly inelastic. This article establishes that traditional approaches to measuring direct benefits are biased. Formulae are presented for calculating the maximum absolute and relative error which may result from using these techniques as a function of project size. Direct benefit estimates are then evaluated for three irrigation projects in Nebraska, illustrating how these results can be used to improve project evaluation procedures.     

POTENTIAL IMPACT OF IRRIGATION ON WATER RESOURCES IN THE LITTLE WABASH BASIN OF ILLINOIS1

The level of water demand for supplemental irrigation and the impact of such demand on water supplies were estimated, as a function of the price of corn (Zea Mays L.). The method of estimation was based on an economic analysis of irrigation practice which assumed constant irrigation costs, profit maximizing behavior on the part of irrigators, and which was deliberately structured to underestimate the level of irrigation water use. The analysis was applied to and used data from the Little Wabash basin in Illinois. No irrigation was predicted at a corn price below $3.50 per bushel. Between $3.50 and about $6.50 per bushel, irrigation was estimated to be profitable for a small region of the basin where acceptable groundwater was available. Above about $6.50 to $7.50, irrigation was found to be profitable in the remainder of the basin, where impoundment storage was required. The potential impact on the water resources of the basin is significant. For a corn price between $3.50 and about $6.50, the probability of a shortfall, defined as the event where the potential demand exceeds the supply, was estimated to be between 2 percent and 20 percent during the growing season. Above about $7.50, this probability was found to be about one-third. The development of policies to control withdrawals for irrigation and other uses is endorsed.     

POLICY IMPACTS ON AGRICULTURAL IRRIGATION ELECTRICITY DEMAND IN THE COLUMBIA BASIN1

ABSTRACT: Accurately estimating the price elasticity of demand for irrigation electricity is important to major electricity suppliers such as the Bonneville Power Administration (BPA) of the Pacific Northwest. The BPA has a revenue maximization objective, and the elasticity of demand is central to its rate setting process. Several studies have attempted to estimate demand for irrigation electricity, but none has explicitly included federal agricultural policy and program variables. Tins paper discusses how agricultural programs may influence farmers irrigation decisions and thus their demand for irrigation electricity. It suggests that existing programs serve to make farmers more responsive to electricity rate increases than would otherwise be the case. Thus, studies that fail to include them may underestimate the responsiveness of farmers to electricity rate increases.     

ESTIMATING THE DEMAND FOR IRRIGATION WATER IN THE CENTRAL VALLEY OF CALIFORNIA1

ABSTRACT: This paper computes estimates of the demand for surface irrigation water directly from disaggregated profit functions for fields in the San Joaquin Valley of California. It finds that treating delivered surface water and pumped ground water as separate, imperfectly substitutable inputs to production matters a great deal. We find substantial ranges of inelastic demand for delivered water, and thresholds across which demand then becomes highly elastic. The results imply that moves toward freer water markets could lead to large quantities reallocated from agriculture to urban uses in the Western U.S., but would require large price increases and would induce extensive ground water mining and major changes in cropping patterns. While these results are dependent on our particular model and simplifying assumptions, evidence exists that they may be robust.     

THE EFFECT OF PRICE ON LONG RUN WATER SUPPLY BENEFITS AND COSTS1

ABSTRACT The long-term effects of presently used and alternatively proposed water pricing policies were studied using some tools of operations research and economics. A discrete deterministic dynamic programming model was structured and operated to determine the optimal water supply capacity expansion paths for a hypothetical residential community with a given water pricing policy. The objective of the model was the maximization of future discounted consumers'surpluses plus producer's revenues net of the long-run cost of supply. State variables were the size of system capacity in MGD and stage variables were the times of feasible capacity increase in years. Demand curves, population sizes, and growth rates for various economic sectors of the community were assumed known, as well as short-run production and capital construction costs. Several policies, including constant unit rates, decreasing or increasing block rates and summer differential rates were tested. It was concluded that price plays a major role in the short-run allocation and long-run planning and conservation of water supplies. Conservational pricing policies were advocated as means of lowering the long-run cost of water, using the water price-demand function as a planning tool. Further research in these areas was recommended.     

SUPPLEMENTAL IRRIGATION OF HORTICULTURAL CROPS IN THE HUMID REGION1

ABSTRACT: A computer model was developed in order to establish a yield predictive relationship and to estimate the water requirements for supplemental irrigation of horticultural crops in the humid region. Alternative distribution systems were developed and designed using the results from the computer model and Wood's (1980) pipe network algorithm. The capital, operational, and maintenance costs of the distribution and recommended on-farm irrigation systems were determined and used to evaluate the economic feasibility of the alternative designs. Results show that the concentration of irrigated area along the distribution system, the length of the distribution system, and cropping system all have an important effect on the economic feasibility of supplemental irrigation in Wayne County, Kentucky.     

THE VALUES OF GOODS AND SERVICES–IMPLICATIONS FOR A FLEXIBLE NATIONAL WATER POLICY1

ABSTRACT: This paper evolved from a concern that water resource administrators and planners do not have a consistent definition of the value of goods and services of outputs from projects and programs. A more flexible approach to planning and evaluation is presented that recognizes the interaction of production and consumption through the use of commodity demand curves. Use of the concept of consumer surplus permits measurement of the differential impacts on producers' and consumers' welfare. Quadratic programming is suggested as a consistent means of quantifying these differential impacts.     

AN ANALYSIS OF RISING IRRIGATION COSTS IN THE GREAT PLAINS1

ABSTRACT: Irrigation costs are rising rapidly on the 32 million acres irrigated with ground water. Ground water levels are declining under about 15 million of those acres adding to increased costs. However, from 1975 to 1982, 75 to 80 percent of increased ground water irrigation costs were due to higher nominal energy prices and interest rates. In real dollars, adjusted for inflation, these costs have risen faster than other irrigation costs and the real rise in commodity prices has been very small. A continuation of rapidly rising costs and slowly rising prices will shorten the economic life of those aquifers experiencing declining water levels. That same condition of prices and costs place all ground water irrigators in a disadvantaged position compared to nonirrigators and could cause a decline in ground water irrigation.     

INCREASING THE AGRICULTURAL USE OF SALINE WATER BY MEANS OF TRICKLE IRRIGATION1

ABSTRACT .A study was conducted in two arid zones to determine the effect of saline water applied to various crops growing in coarse-textured soil, using trickle irrigation. The test crops responded most favorably to this new method of water application in terms of plant development and yield. The method provides us with the possibility of raising the permissible salinity level of irrigation water, and thus to increase the water reserves suitable for agricultural use in the world.     

BENEFITS FROM WATER CONSERVATION DEPEND ON COMPREHENSIVE PLANNING1

: Substantial reductions in municipal water use are feasible without reducing the quality of life. If conservation measures are preplanned, properly engineered, and coordinated, reductions in utility bills for water, waste water, and energy are estimated at $30+per person per year. Installation of devices to reduce water use, engineering plans to prevent malfunctioning of collecting sewers, and engineered process modifications of treatment facilities must be coordinated to achieve full benefits of water conservation. Pollutant discharges to the aquatic environment are reduced in direct proportion to the reduction in water use.     

PROJECTED EFFECTS OF ENERGY POLICIES ON AGRICULTURAL WATER USE AND IRRIGATION1

ABSTRACT: A national and interregional programming model was used in projecting the impacts of alternative energy policies and prices on agricultural production, land use, and irrigation. The alternatives analyzed include (a) natural gas deregulation, (b) natural gas curtailment, (c) doubled energy prices, and (d) tripled energy prices. These alternatives are compared with a base alternative where prices and conditions are at normal levels. Restraints in the model control availability of water, land, nitrogen fertilizers, and energy. Water production functions were used to adjust water use to conform with projected energy prices and policies. Natural gas curtailment would have the largest effect on nitrogen use on irrigated land. Values or shadow prices for lands that remains in irrigation would increase under all of the alternatives because of reduced supply. Increased energy prices generally would increase use of surface water for irrigation and reduce use of ground water due to higher pumping costs. Reductions of 50 percent or more in ground water use would occur in the South Central and Western regions of the United States. Water supply prices increase under all of the alternatives; with the amount varying by regions and the policy or price situation.     

EFFECTS OF IRRIGATION ON WATER QUALITY OF A SHALLOW UNCONFINED AQUIFER1

ABSTRACT: The ground water quality of a shallow unconfined aquifer was monitored before and after implementation of a border strip irrigation scheme, by taking monthly samples from an array of 13 shallow wells. Two 30 m deep wells were sampled to obtain vertical concentration profiles. Marked vertical, temporal, and spatial variabilities were recorded. The monthly data were analyzed for step and linear trends using nonparametric tests that were adjusted for the effects of serial correlation. Average nitrate concentrations increased in the preirrigation period and decreased after irrigation began. This was attributed to wetter years in 1978–1979 than in 1976–1977 which increased leaching, and to disturbance of the topsoil during land contouring before irrigation, followed by excessive drainage after irrigation. Few significant trends were recorded for other determinants, possibly because of shorter data records. Nitrate, sulphate, and potassium concentrations decreased with depth, whereas sodium, calcium, bicarbonate, and chloride concentrations increased. These trends allowed an estimation to be made of the depth of ground water affected by percolating drainage. This depth increased during the irrigation season and after periods of winter recharge. Furthermore, an overall increase in the depth of drainage-affected ground water occurred with time, which paralleled the development of the irrigation scheme.     

IMPACT ON GROUNDWATER RESOURCES OF CONVERSION FROM FURROW TO DRIP IRRIGATION1

ABSTRACT A model is developed to analyze the groundwater conservation and depletion effects of converting sugarcane irrigation from the furrow to the drip method. The results do not support the commonly held notion that more efficient use of irrigation water will release scarce water supplies for metropolitan growth.     

MODELING HYDROLOGIC IMPACT OF WITHDRAWING THE GREAT LAKES WATER FOR AGRICULTURAL IRRIGATION1

ABSTRACT: Growing interest in agricultural irrigation in the Great Lakes basin presents an increasing competition to other uses of Great Lakes water. This paper, through a case study of the Mud Creek Irrigation District in the Saginaw Bay basin, Michigan, evaluates the potential hydrologic effects of withdrawing water for agricultural irrigation to the Great Lakes. Crop growth simulation models for corn, soybeans, dry beans, and the FAO Penman method were used to estimate the difference in evapotranspiration rates between irrigated and nonirrigated identical crops, based on climate, soil, and management data. The simulated results indicate that an additional 70–120 mm of water would be evapotranspirated during the growing season from irrigated crop fields as compared to nonirrigated identical plantings. Dependent upon the magnitude of irrigation expansion, an equivalent of about 1 to 5 mm of water from Lakes Huron-Michigan could be lost to the atmosphere. If agricultural irrigation further expands in the entire Great Lakes basin, the aggregated potential of water loss to the atmosphere through ET from all five Great Lakes would be even greater.     

ESTIMATES OF THE ECONOMIC VALUE PRODUCTIVITY OF IRRIGATION WATER IN PAKISTAN FROM FARM SURVEYS1

Data from two cross-sectional surveys totaling over 2000 farmers in Pakistan are analyzed with regression techniques to estimate the value productivity of irrigation water and related resources. Returns to irrigation water vary by province, but in general are found to be high relative to estimated costs of obtaining water. Salinity of water supplies is an important productivity depressant. The results will be useful in determining the economic feasibility of various means for augmenting supplies and for improving delivery and application efficiencies.     

EFFECTS OF RATE STRUCTURE KNOWLEDGE ON HOUSEHOLD WATER USE1

ABSTRACT: Socioeconomic determinants of individual household water use were estimated using regressions of these characteristics with actual household water use for winter and summer. Results were disaggregated between those consumers who were aware of an increasing block rate price structure and those who were not. Most of the informed group members believed that this price structure did result in significant reductions in water use. Nevertheless, overall water use was greater for the informed group. The determinants of water use were found to differ between informed and uninformed users as well as between winter and summer. The uninformed users were influenced by a larger set of variables in each season than the informed group. In winter, the informed group members with swimming pools and/or arid landscaping used less water than their uninformed counterparts. Summer water use increased with length of tenancy in home for the uninformed group but not for informed, while increasing with ownership for informed consumers.     

THE POTENTIAL IMPACT OF WATER REALLOCATIONS ON AGRICULTURE IN IDAHO1

ABSTRACT: Economics is concerned with the allocation of resources between alternative uses. Traditionally, in the western United States, water resources have been committed to agriculture and irrigation. Other competitive uses such as power, industry, and recreation are challenging this allocation. What are the impacts of shifting water out of agriculture into other uses, is a question that needs to be given consideration. Ilia paper attempts to evaluate the tradeoff between using farm land for either irrigated or dryland production and the resulting impacts on gross farm income and the average price of land. Baaed on historical data, reducing irrigated acreage and increasing dryland acreage could greatly reduce both farm income and the equity in farming. The model presented in this paper should be useful for evaluating the tradeoffs between dryland and irrigated land use, especially when there are gat differences in productivity such as those that exist in the inter-mountain region of the Western United States.     

THE DEVELOPMENT OF A MODEL TO EVALUATE HYDROLOGIC RISK IN WATER RESOURCE SYSTEM DESIGN1

In this paper, a procedure for analyzing a water resource system with special emphasis on evaluation of acceptable economic risk due to occasional failures to deliver water is proposed. The basic methodology includes the development of a simple mathematical model which describes the physical hydrologic and economic characteristics of a single reservoir irrigation and city water supply system and an evaluation of economic benefits of the system with full and partial deliveries of water. The system is simulated for various combinations of decision variables (system magnitudes) and an optimum design is obtained by response surface technology. Emphasis is placed on the basic model and methodology although, in order to introduce some realism, the procedure is applied to data based on the existing reservoir system on the South Concho River in West Central Texas.     

BENEFITS OF POLLUTION CONTROL ON MASSACHUSETTS’ HOUSATONIC RIVER: A HEDONIC PRICING APPROACH1

ABSTRACT: This paper illustrates one mode of analysis for estimating the benefits of water pollution control projects. Results indicate regional benefits associated with an abatement program instituted for point source pollution along the Housatonic River during the 1960's were substantial. Studies of this kind can aid regulatory and recreation resource administrators in devising and evaluating environmental programs.     

ASSESSING THE ECONOMIC BENEFITS OF GROUND WATER FOR ENVIRONMENTAL POLICY DECISIONS1

ABSTRACT: The full range of environmental and economic services of ground water need to be accounted for in policy decisions. Non-recognition of these services imputes a lower value for the ground water resource in establishing policies. We describe a conceptual framework for identifying and measuring the economic value of groundwater. The valuation framework links changes in physical characteristics of ground water to services provided by ground water and the economic effects of changes in ground water services. In addition to the framework, we develop a general protocol to follow for assessing the benefits of ground water policies. Application of the protocol will aid in establishing structure and consistency across policy assessments and improve the accuracy and completeness of benefit estimates, avoid double-counting problems, and eliminate duplication of ground water valuation efforts.