A PROPOSED PROCEDURE FOR DISTRIBUTING ASSESSMENTS AMONG BENEFICIARIES OF SMALL WATERSHED PROJECTS

Resource /Energy Economics and Policy,

ECONOMIC INCENTIVES TO REDUCE THE QUANTITY OF CHEMICALS USED IN COMMERCIAL AGRICULTURE

Environmental Economics and Policy,

Establishing Crop Acreage Flexibility Restraints for Subregions of the Texas High Plains

Cropping pattern shifts in many aggregate linear programming (LP) models need to be constrained due to institutional, marketing machinery, and price uncertainty factors. The purpose of this study was to estimate constraints which are referred to as flexibility restraints for major crop acreages in subregions of the Texas High Plains for use in a LP model that was developed to derive water and other input demand. Alternative estimating models for establishing acreage flexibility restraints were developed using methodology and model formulation presented in the literature. The results of these models in estimating flexibility restraints were evaluated using statistical measures and subjective analysis. Models which were analyzed ranged from a simple linear regression model in which the current year's acreage is expressed as a function of last year's acreage to a multiple regression model in which economic and climatological variables were considered. The multiple regression model as formulated and estimated did not provide satisfactory results. However, as in many of the earlier studies the simpler models did provide acceptable performance. From among the simpler models one was selected based on statistical measures and a prioria expectations. The model was used to calculate crop acreage flexibility restraints for three subregions of the Texas High Plains

Break-Even Investment in a Wind Energy Conversion System for an Irrigated Farm on the Texas High Plains

The purpose of this study was to quantify the benefits of using a wind energy system for irrigation. The value of wind energy was estimated on both a static basis (where the annual value of wind power was assumed to be constant over the life of the machine) and on a temporal basis (where the annual value of wind power was estimated recursively). The model for static analysis contained two components which were applied consecutively. The first was a linear programming (LP) model for the High Plains region. Production activities were included which allowed both optimal and non-optimal timing of post-plant irrigations, giving the producer added flexibility in the employment of limiting water resources. The optimal irrigation schedule determined by the LP solution was used as input to the second component. A simulation model matched stochastically generated estimates of wind power availability with irrigation fuel requirements (derived from the profit maximizing irrigation schedule) by three-hour time periods throughout a year. For the temporal analysis, a Fortran subroutine was added to the LP model to operate the model recursively over the life of the wind system and to account for the annual decline of the aquifer. Both fixed and variable costs were included. The basic LP model was applied to develop the benchmark case (i.e., without wind power). The farm operation with wind power was analyzed by applying the LP model with the monthly expectations of wind-generated electricity added. Two wind machines were analyzed, with rate outputs of 40 to 60 kilowatts (KW). Each was applied to the Northern and Southern Texas High Plains over a range of land and water resource situations. Breakeven investment was estimated at discount rates of three, five and ten percent. Cropping patterns on the Southern High Plains were dominated by irrigated cotton and were insensitive to changes in crop or electricity prices. On the Northern High Plains, irrigated corn and grain sorghum were the major crops, with acreage reverting to dryland wheat at the higher electricity prices. The cropping patterns in this area were impacted heavily by labor restrictions. Consideration of wind power had little effect in determining optimal cropping patterns. When wind power was applied to an irrigated farm on a static basis, the set of crop prices applied had little effect on the annual value of a wind system. Value of wind power was increased, but by smaller proportions than associated increases in the price of electricity. Each machine size had a greater value when operated on the larger of the two applicable land units (100 acres for the 40 KW machine and 144 acres for the 60 KW system). The 60 KW system was also tested on the 100 acre unit but returned less per KW than the 40 KW system. Available wind power in the temporal analysis was less than in the static analysis, thus temporal estimates of wind system value should be regarded as conservative. On the Southern High Plains, break-even investment was decreased slightly from the static analysis. However, in some situations on the Northern High Plains, break-even investment increased. This indicates that the value of wind power could increase as the aquifer declines in some situations. Break-even investment increased by up to 80 percent when the price of electricity was increased by $.005 per KWH per year. The most significant effect of wind power was that it allowed the maintenance of irrigation levels which, without wind power, had been made uneconomical. These results indicate that, at least in the future when wind system costs decrease and stabilize, wind-assisted irrigation could be an economically viable alternative for Texas High Plains producers. The results are limited by the need for future research regarding the effect of irrigation timing on crop yield as well as some of the long-term characteristics of wind system operation, such as durability and the requirements and costs for system repairs and maintenance

An Economic Evaluation of a Water-Based Urban Tourist Attraction in San Antonio, Texas

The importance of an economic study of the Paseo del Rio (a highly developed portion of the San Antonio River) has greatly increased with the proposal of many extensions, each of which will involve large investment. That developmental plan which has been in the forefront involves an extension of the Paseo del Rio, in the central business district, north to Brackenridge Park and south to the city limit. An economic study of the existing, developed area would determine the estimated impact of it on commercial enterprises, and produce information relative to the possible effects of future extensions and associated developments. The purpose of this study is to determine the economic effect of the Paseo del Rio on commercial enterprises and activities as it affects tourism and recreation in the central city. Based on the assumption that the economic effects of the developed river area arise from the expenditures of the users, and that beneficiaries are the businesses surrounding the area, three surveys have been conducted. One concerned users of the developed river area. It served to identify their socioeconomic characteristics and other relevant factors which might be important to their knowledge and use of the river. The second was a survey Of the businesses in the central business district to identify their economic characteristics, their relationship to the Paseo del Rio, and the proportions of gross receipts of these businesses attributable to the developed river area. A third survey served to identify characteristics of residents of San Antonio, their knowledge of the Paseo del Rio and their use of it for various purposes. Statistical analyses indicated that the income of the user, the size of the user group, and the distance traveled by the user were all positively associated with the level of his expenditures. The two user activities, shopping and eating, were associated with high levels of expenditures. Other user characteristics which resulted in high levels of expenditures were the purchase of food and recreational goods. The businesses in the river area were stratified according to distance from the Paseo del Rio to reduce variation. This stratification was extremely significant, with the proportion of gross receipts attributable to the developed river area decreasing as distance from the river increased. Businesses selling the goods and services of arts and crafts, entertainment and lodging attributed high proportions of their gross receipts to the Paseo del Rio. The types of customers which contributed large amounts of gross receipts to the area were tourists and local residents (businesses and households). The users of the area are not only tourists, but also San Antonio residents and persons from nearby cities. Thus, an extension of the Paseo del Rio would be significant not only to increased tourism but also to added recreational use of the river by the residents of the city. Reaction to the proposed extension was favorable both from the standpoint of the businesses in the surrounding area and from the users of the Paseo del Rio

The Effect of Changing Input and Product Prices on the Demand for Irrigation Water in Texas

Agriculture is a major income-producing sector in the Texas economy and a large part of this economic activity originates in irrigated crop production. For example, in 1973, 50% of all grain sorghum and 46% of all cotton in Texas were produced on irrigated acreage [Texas Crop and Livestock Reporting Service]. These two crops alone produced 26% of the cash receipts from the sale of Texas farm commodities in 1973 [Texas Crop and Livestock Reporting Service]. There are several other crops in Texas including vegetables which generate significant levels of income and rely heavily on irrigation. Further there are several associated industries which rely on production from irrigated agriculture, such as the cattle feeding industry in the Texas Panhandle. It is evident from this rather cursory examination of statistics that irrigation plays a large role in Texas agriculture. Both producers and policy-makers have found themselves faced in the past two years with many uncertainties. The U.S., plagued in the past with surplus production and supply control problems, now finds itself in a world shortage of food products. The long range signals seem to call for increased production, yet the policy-maker faces decisions concerning not only how to increase production, but more basically, how to maintain current levels of production. Groundwater resources in many areas are being diminished and annual irrigation water supplies fully committed in other areas. Long run planning for Texas agriculture requires that interbasin transfers of water be evaluated. Texas holds a position of prominence in the production of U.S. food and fiber products, and the evaluation of these alternatives has implications not only for Texas, but for the U.S. and possibly the world. To objectively evaluate water transfer proposals, it is necessary that the value of irrigation water in different regions of Texas be established. The producer faces the same call for maintaining or increasing production as the policy-maker, but he does so with many uncertainties which often have not disturbed the policy-maker in evaluating alternatives. Product prices have risen and fallen at an unprecedented rate while input prices have steadily risen at rates which preclude realistic budgeting. For example, during the recent energy crisis, the prices of fuel and fertilizer have more than doubled. These variable input and product prices weigh heavily upon production decisions by the producer, and likewise must receive serious consideration in evaluation of resource allocation alternatives by policy-makers. The demand for irrigation water is derived from the production of crops and any change in production patterns, input prices or availability, and product prices directly affects this demand. Current and future water resources planning requires an estimate of the various quantities of water which will be used for irrigation under differing assumptions concerning price of water, other input prices, and product prices. Of particular importance are shifts in cropping patterns, changes in level of agricultural production and net effect on producers income. Since many policy decisions are made in relatively short periods of time, there is an urgent need for a capability to evaluate alternative policies and change input or product prices in a timely fashion

IMPACT OF A MORE INTENSIVE INSECT PEST INFESTATION LEVEL ON COTTON PRODUCTION: TEXAS HIGH PLAINS

This study evaluated implications of increased bollworm problems in a 20-county area of the Texas High Plains relative to cotton yields and economic impact. Results did not indicate a serious effect of bollworms upon lint yield when insecticides were used for control. However, estimated annual reduction in farmer profit due to the bollworm for 1979-81 was over $30 million. Yields were estimated to decline about 300,000 bales without insecticide use and about 30,000 bales with insecticide use. This decline suggests potentially serious implications for the comparative economic position of cotton in this region if insecticide resistance were to develop among insect pests.Crop Production/Industries,

Outlook for Energy and Implications for Irrigated Agriculture

Agriculture uses large quantities of energy to pump groundwater for irrigation. This means the cost of energy has important implications for the industry in terms of costs and profitability. Increases in the prices of energy sources such as natural gas, electricity, liquid petroleum gas and diesel can cause economic hardship for irrigators, particularly if those increases are unanticipated. The purpose of this paper is to briefly summarize important trends in the current domestic energy situation that could have significant impacts on the future cost and availability of energy, and to show what the implications of those trends are for irrigated agriculture. The primary focus of this study will be on trends in natural gas, since natural gas is the major fuel used for irrigation in the Great Plains states

Economic Implications of Farmer Storage of Surface Irrigation Water in Federal Projects: El Paso County, Texas

The Bureau of Reclamation has approved a program for farmer storage of surface irrigation water in Elephant Butte Reservoir, New Mexico. This program would allow individual farmers to store part of their annual surface water allotment in the reservoir subject to evaporation loss to be drawn at a future date upon request. The purpose of this study is to ascertain the economic implications of such a program for farmers in the El Paso County Water Improvement District No. 1. The economic analysis was based on results from a linear programming model developed for crop production in E1 Paso County. The model was designed to maximize net farm revenue. Twelve crops were included in the analysis. The effects of soil type and salinity level of irrigation water on crop yields for all twelve crops were estimated. Input requirements by crop and yield level were identified. Input categories included seed, chemical, water, machinery, labor, harvest, other and fixed costs. Irrigation alternatives included both surface and ground sources. In addition, the water saving technology of laser leveling was incorporated into the model. The model was restricted by acreage of a soil group with a specified level of salinity in the underlying groundwater. Also, the quantity of surface irrigation water available was limited. This static linear programming model was applied for various surface irrigation water allocations ranging from zero to three acre feet per acre of cropland with groundwater assumed available. This procedure produced a schedule of net farm revenues for alternative surface irrigation water allocations for use in conjunction with groundwater. The procedure was repeated with groundwater availability limited to zero. These two schedules of net farm revenues were then used (1) to form the basis of two temporal linear programming models which maximized the real value in 1980 dollars of a stream of net farm revenues, and (23 to evaluate a specified annual surface irrigation water use scenario of two acre feet per acre per year. The temporal models maximized the 1980 real value of net farm revenues. This revenue stream was generated by optimal temporal use of the actual annual surface irrigation water allotments for 1963 to 1980. This optimal use includes the opportunity to store water in Elephant Butte Reservoir subject to evaporation. Results were obtained both with and without groundwater pumping over three surface water use scenarios (actual, optimal temporal and two acre feet per year). The results of this study indicated that, with the ability to store surface water, temporally optimizing surface water use would have increased the real value of net farm revenue $0.84 per acre per year or 0.4 percent above the real value of net farm returns implied by the actual use rates for the groundwater pumping case. For the no groundwater pumping case, the real value of net farm returns increased by$3.56 per acre per year or 2 percent above the net farm returns indicated by the actual use rates. Also, storing surface water for future use, or accumulation, tends to decrease the year to year variability of net farm revenues. Groundwater pumping is also known to decrease this variability. The target surface water allocation of the project administrators is three acre feet per year. The optimal temporal solutions tended to be between this three acre feet allocation and the two acre feet allocation as specified in the two acre feet per year scenario. An optimal temporal allotment of three acre feet appears too high while two acre feet appears too low. Without a system of farmer-held surface water storage, optimizing temporal use of surface irrigation water would not be possible. Thus, this water storage opportunity is an important irrigation management tool for individual farmers in the El Paso County Water Improvement District No. 1

Impact of New Irrigation Technology on the Texas High Plains: 1980-2020

Crop production on the Texas High Plains is constrained by limited and erratic rainfall, hence irrigation is important. Presently, 6 million acres, or 50% of regional cropland, are irrigated annually. Irrigation water is drawn from the Ogallala Aquifer, which has a recharge rate near zero, and is being depleted at the present rate of use. Future crop production is dependent on technology, as well as the resources available. Because water is a major limiting resource, technologies that increase plant available water, such as advanced irrigation distribution systems and soil moisture conserving tillage methods, are of particular interest, and are the focus of this study. Two levels of analysis were included. The first, a farm level analysis based upon representative counties showed the similarities and differences of response given particular resource endowments, technological options and price situations. Part of the analysis considers the impact of annual qroundwater withdrawal constraints on discounted net present value for a forty year planning horizon. The discounted net revenue was higher for lower discount rates, better commodity prices, and more advanced technology. However, alternative discount rates, prices, and technology did not change the optimum annual withdrawal limit. Lower initial groundwater resources reduced the revenue level and the optimal annual groundwater decline limit. The other part of the farm firm analysis covers expected costs, returns and cropping patterns for a single period. Prices have a significant influence on production, but a far greater impact on net returns. The value of production is 64% to 85% higher for normal prices versus low prices, while net returns are from 8 to 30 times higher. The amount of available groundwater was not as important as price in the determination of production levels, but it too had a significant impact on net returns. Comparing across representative counties, with prices, technology and groundwater situations held constant, the value of production varied more than $150 per acre, but net returns changed very little. The value of production increases 17% with advanced technology, but net revenue more than doubles. The second level of analysis, a regional analysis, addressed expected changes in cropland use, groundwater pumpage, production levels, input demand, and farm income over the next forty years, under select technology and price assumptions. Water availability and hence use, drops over time, reducing irrigated cropland, gross returns and net revenue. The demand for other inputs does not decline as quickly as water usage, indicating input substitution. Further, the decline in net revenue is greater than the reduction in gross returns or variable costs of production. The intensity of crop production declines and the mix of crops changes, reducing purchased input demand and lowering regional farm income. Advanced technology enhances the value of the groundwater resource, increasing water use especially in the later periods of the time horizon. Nontheless, over the whole 40 years, technologies which improve dryland, as well as irrigated, crop production, such as limited tillage and crop rotations, have a greater impact than advanced irrigation technology. While advanced technology enhances productivity and increases net returns, technology is not a substitute for irrigation. Nor does technology save groundwater resources in the large, since the increased value of the water, given advanced technology, encourages greater use, overall. Advanced technology, however, is important to the future of crop production in the region, since it increased the level of production, and net revenue. Further, the impact of technology was proportionally greater under the low commodity price scenarios than for average prices