RT III-
IMPACTS OF LESS WATER FOR IRRIGATED AGRICULTURE

Chapter 10-
Local and Regional Economic Impacts

by Robert A. Young ^[*]

Abstract

The water economy of the western U.S. is moving from the "expansionary phase" (where new supplies are readily available) to the "mature phase" (where costs of new supplies are rapidly escalating and water users are increasingly interdependent). At some point, the incremental cost of new water exceeds the economic value foregone in some of the existing uses. Irrigation accounts for 85-90 percent of water used in each of the western states, and competition for irrigation water from growth in both off-stream and instream uses is increasingly evident. However, a reasonable scenario for urban water demand growth will bring about only a 10 or 20 percent reduction of agricultural supplies in the next two decades. The task of this chapter is to assess the direct and indirect economic impacts of potential transfers of water from agriculture to alternative uses.

The conventional wisdom regarding the role of irrigation in the West holds that irrigation has been an important source of regional growth and, conversely, that removing water from agriculture would have significant negative economic effects. This chapter argues the case for the contrary hypothesis. The general approach is to compare the potential reductions in net farm income and regional farm-related income and employment with the gains in those sectors which receive reallocated water supplies.

Direct economic impacts to the agricultural sector, measured by net economic value foregone, will, in the final analysis, be registered on the products in which value productivity is lowest. In those sectors (generally in forage, and food and feed grain production), the net economic value foregone for a 10 to 20 percent supply reduction will mostly fall in the range of $5-$30 per acre-foot. The gain in net value of product or in willingness to pay in households and industries are seen to be five to ten or more times as high.

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Indirect impacts are measured by income from primary regional resources ("value added") and by employment per unit of water, including multiplier effects. The evidence indicates that the indirect losses associated with transferring water from agriculture, while not insignificant in terms of either income flows or employment, will also be dwarfed by the gains in nonagricultural sectors. In particular, the sectors most likely to be affected (forage, and food and feed grains) yield relatively small indirect employment and income effects when compared to those for emerging urban sectors.

The economic interests of farmers whose water is transferred to urban uses are generally protected by state water and property rights laws. It is anticipated that the rate of loss of irrigation water will be relatively slow (a few percent per year), so that indirectly affected workers and businessmen have time to anticipate and adjust. These problems are the natural consequences of the process of economic growth and change, and are similar to those felt in other sectors of the changing economy. Little need is seen for special public policies to deal with these changes.

A premise of this volume is that the water economy of the western United States is passing from the "expansionary" phase to the "mature" phase. In the expansionary era, the incremental cost of water remained relatively constant over time (in real terms), as water development project sites were available to meet growing demands. The mature phase, brought on by change in the economy at large, is characterized by rapidly rising incremental costs and greatly increased interdependencies among water uses and users.^[1]

In a maturing water economy, the high cost of new water brings about a search for supplies from existing uses whose economic productivity is less than the cost of acquiring new supplies. The largest use of water in the western U.S. is for crop irrigation. Thus, competition for irrigation water is arising from industrial, energy, and household water diversions, and from instream uses such as power generation, recreation, fish and wildlife habitat, and navigation.

This chapter assesses the economic impacts of increased competition for irrigation water on farmers and other direct water users, and on the local and regional economies intertwined with the water using sectors. A second task is to consider the policy changes needed to deal with anticipated impacts.

Economic Impacts:
Alternative Perspectives

Two competing hypotheses or viewpoints can be identified regarding the economic impacts of reduced water supplies for irrigation.

The "Significant Impact" Hypothesis

One viewpoint, which appears to reflect the conventional wisdom in political and media discussions of the "western water problem", contends that irrigation has been a significant source of regional growth in the West. Supporters of this perspective point to the sharply increased crop sales brought about by irrigation, and claim substantial multiplier effects in jobs and spending in the related communities and regional economies. From the "significant impact" hypothesis follows its converse: removing water from the agricultural sector will have major, even intolerable, negative effects on the regional economy.

The significant impact hypothesis draws its evidence from several sources. One is our historic sense of the role of irrigation in developing the West. Another is the obvious fact that irrigated lands yield enormously more product than semidesert, or wheat-fallow rotations. Also supporting this view is the relatively high income and employment associated with fresh vegetable and fruit crops in areas with milder climates.

The "Limited Impact" Hypothesis

The alternative hypothesis conceptualizes the problem in what economists would call "marginalist" terms. This viewpoint, invoking the law of diminishing marginal returns, posits that the productivity of irrigation water ranges from highly productive down to marginally productive uses. Similarly, the indirect regional employment and income impacts range from significant in some sectors to minimal in others. The marginalist position contends that water removed from irrigation will, in the long run, be the least valuable portion. Even if the first-round impact is at the expense of high-valued irrigation uses, subsequent economic adjustments will find the low productivity uses giving way.

The limited impact hypothesis finds evidence for its viewpoint in the large proportion of water diversions in the West which are devoted to irrigation (80-90 percent), and the high proportion of irrigation water use which is in relatively low-valued uses

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(forages, and food and feed grains). Proponents focus on the low absolute amounts of indirect income and employment in the processing and input supply sectors associated with most agricultural water use. This approach asks how much water from agriculture will be needed to fuel expected nonagricultural growth and tries to measure the incremental costs of such reallocations, compared with the costs of new water supplies.^[2]

The evidence, I believe, strongly supports the "limited impact" hypothesis. This chapter presents the case for that viewpoint.

Procedures and Scenario for Impact Assessment

The general approach taken here is to compare the economic impacts of potential reallocation of water from irrigation to other direct uses of water. Indirect impacts of removal of irrigation water are similarly compared to indirect effects in growing sectors which might acquire water. The net value foregone (or gained) is taken to be the most suitable measure of direct economic impact. Payments to primary factors of production (value added) and employment are the chosen measures of indirect impacts.

The assumptions of the analysis are as follows. The planning horizon is taken to be the remainder of the century. The economic impacts presented below will be expressed in 1982 price levels. As the economic background, there will be no general wars or political upheavals which disrupt world production and trade in agricultural commodities, and agricultural commodity prices will continue the trend which has been observed through most of this century, with technology holding food prices down relative to the cost of production inputs and to real consumer incomes. Hence, current price and production relationships will be used in predicting future agricultural net income.

It seems unlikely that water diversion requirements in nonagricultural sectors will grow so rapidly as to require any enormous reduction in water supplies to agriculture. (For example, a 2.5 percent compounded rate of growth in nonagricultural water demands in California would absorb only another 4 million acre-feet after twenty years, or about 10 percent of current agricultural water use in that state.) The analysis below posits at most a 20 percent reduction in irrigation water supply, which I regard as an extreme outside limit of impact in the next two decades.

Direct Impact Measurement

Economic value has been a principal indicator of general value in our society. In a market economy, economic values are measured by market prices. When the market is working well, the price system measures the value that goods or services provide to people and the value of resources used in production. Direct economic impacts of water reallocation should be measured by the price of the commodity (or by a surrogate price when markets are not operative), since the price measures the net value foregone or gained in the respective use categories.

For various reasons, market prices are not generally available for water. The physical barriers to markets for water stem from its flowing, mobile characteristics, which make it difficult to establish and enforce the property rights which are the essential foundation for any market system. Also, in certain uses, water is a public rather than a private good, in that one individual's consumption does not preclude use by others. Finally, water plays a special role in human society. Boulding^[3] has pointed out that "the sacredness of water as a symbol of ritual purity exempts it in some degree from the dirty rationality of the market."

However, it is possible to estimate the net benefits conferred by water even in the absence of markets. This process is sometimes termed "shadow pricing." Shadow pricing can be understood as an attempt to establish an exchange ratio in monetary terms which would be equivalent to that which would emerge from a properly functioning market process. The basic concept is willingness to pay as the indicator of economic value. Willingness to pay (WTP) reflects the amount which a rational, fully informed consumer would be willing to forego rather than do without the commodity in question. In accordance with the principles of diminishing marginal utility or diminishing marginal productivity, willingness to pay falls as quantities increase.

Special Problems in Valuing the Water Resource

The hydrologic system must be considered in terms of its interactions with climate, land, ecosystems, and the human social and economic systems. This intricacy is further complicated by the highly variable nature of moisture supplies, the importance of sequential uses as water flows from upper watersheds to its eventual destinations in sea or sump, and the importance of transportation costs in establishing water value. Concepts of the

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economic value of water can be relevant only when explicit recognition is given to quantity, location, quality, and time of supply. Put another way, the value of water is highly site-specific, and varies directly with local conditions of supply and demand for the resource.

Broadly speaking, there are three ways of determining net willingness to pay for water.^[4] One is to determine WTP by statistical analysis of actual or hypothetical water use decisions by consumers. A second, called the "change in net income" approach (applicable to agricultural or business users), imputes the value of water as the increment to profits arising from an increment in water supply. Finally, the "alternative cost" approach values water in terms of the resource savings which would be achieved by water-intensive as opposed to alternative production technologies.

Marginal versus Total Value

The correct concept is the incremental worth (value of the last unit) rather than total value or revenue associated with all units of water and other resources. The total value of product can be attributed to water only if all other factors of production (i.e., labor, land, capital) have no known alternative beneficial use (an extremely unlikely event).

Long-Run versus Short-Run Value

Short-run values apply to farmer decisions in the growing season (with fixed resources not charged for), while long-run values reflect the net returns after all resource input costs are deducted. Short-run values tend to be higher; as willingness to pay rises, the fewer the fixed resources which need to be accounted for. Long-run values are the most appropriate in the present context.

Comparability in Place, Form, and Time

As noted above, water is a bulky commodity, for which transportation costs are often large relative to value at the place of use. Hence, value of water declines rapidly with distances from site of use, and may even be negative at a potential source. Quality (perhaps reflected in treatment costs) and timing are important specifics as well.

Measuring Quantity:
Diversion versus Consumption

For off-stream uses, the usual choice of a measure of quantity is between the amount diverted and the consumptive use (that

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portion of diversion not returned to the stream or aquifer, and not available for reuse). Although there are no firmly agreed upon conventions, most economists prefer to deal with withdrawals. The discussion below follows that approach.

Annual Value versus Capitalized Value

Does the value estimate represent an annual rental equivalent (the price of one acre-foot in a typical year), or the right to a certain flow each year into the indefinite future? Clearly, these values are related, but not identical. The value of the latter (property right) is conceptually equal to the discounted present value of the stream of annual values. Hence, time horizon, interest rate, and expectations regarding inflation, in addition to annual value, must be specified in order to reconcile the two. The capitalized value will normally be in the range of twelve to twenty times as large as the annual value.

In the subsequent discussion, "net benefits" will refer to the willingness to pay for one acre-foot of raw water diverted in a particular year, unless otherwise specified. Diversionary uses are treated first, followed by the nonwithdrawal or instream categories.

Net Economic Benefits Foregone from Irrigation

The direct value of water from foregone irrigation is usually measured in terms of the decrement of profit to the producer without irrigation (or with a decrement of water supply) as compared to profits with irrigation. At the margin, the value of a decrement is the same as that of an increment, so either formulation is applicable.

One additional distinction is useful. The marginal net benefit measured can be for the marginal crop or for the average net benefit for the marginal farm. I favor the former measure as most generally applicable. But there may be some instances, where entire farms (or even areas) are removed from irrigation, where the average benefit is appropriate.

What are the net benefits of irrigation water? The previous discussion implies that the value at the margin will reflect water scarcity and marginal cost of supply. Local production conditions (i.e., rainfall, temperature, and growing season length) and market situations will have an impact, so we would expect considerable variation across the West.

A recent set of estimates has been developed by Beattie and Frank,^[5] which involved statistical analysis of 1974 census data on agricultural output, as influenced by resource inputs, including

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land, labor, machinery, and chemicals, as well as irrigation water. The results yielded values (converted to current 1982 dollars) of $10-$15 per acre-foot in the intermountain valleys (Upper Colorado, Snake River Basin), $20-$25 in the desert Southwest and central California, and $40-$45 per acre-foot in the Ogallala groundwater region of the High Plains.

Howitt et al. recently reported rather similar results, using a much different technique. Their interregional supply-demand model for California yielded shadow prices at the margin of $23-$35 per acre-foot in the Central Valley and southern California and $7 in the Imperial Valley.^[6] Gollehon et al. show shadow prices for irrigation water for eleven Rocky Mountain subregions. With a 20 percent reduction in irrigation water supply, two regions were identified with water valued at the margin in excess of $20 per acre-foot, while four were between $10 and $20 per acre-foot and six were below $10.^[7] Estimates based on conversions of water rights sales to annual equivalent values in New Mexico^[8] yield similar results.

Irrigation water is seen to be most valuable when it helps to confer a special comparative advantage on crop production in a particular locale. This advantage is most likely to occur in the desert valleys of the Southwest which are adapted to perishable fruit and vegetable production. Forage, feed grain, and food grains are storable and readily produced with natural moisture elsewhere in the nation, so that net value productivity of water use in these categories is relatively limited. Net benefit estimates obtained for certain specialty crops may therefore be somewhat higher than the figures cited above. However, such uses will probably account for no more than 10 to 20 percent of total irrigation water use in the West in the period under discussion, and are not relevant for the present analysis. Eighty percent of irrigation demand probably lies below $40 per acre-foot, and the last 10-20 percent subject to transfer would be valued below that level.

Net Economic Benefits in Nonagricultural Uses

The Value of Water in Industry

While water is used throughout the industrial sector, the major consumer, particularly in the arid West, is in the energy sector, particularly for cooling steam-electric power plants.

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Several processes can be used for cooling, depending on water scarcity and price. Young and Gray^[9] show with an alternative cost approach that it is economical to convert from a passthrough system to evaporative cooling towers when water costs rise above about $5 per acre-foot (1982 price levels). Methods which conserve more water are much more expensive. Gold et al.,^[10] in a study for EPA, report that breakeven points for a combination wet-dry system run around $600 per acre-foot, while the shift to a completely dry cooling system would be economical only if water was priced above about $1400 per acre-foot. Abbey's analysis of the water/energy problems in the Colorado River Basin provides similar estimates.^[11] Leigh has estimated the net benefits to water for coal slurry pipelines, using the cost saving from the alternative of rail transportation as the measure.^[12] The value of water in a Colorado to Texas system is estimated to exceed $1600 per acre-foot. Hence, the large-scale energy projects proposed for several areas of the West could, if necessary, be willing to pay an amount many times the price of water in neighboring agricultural uses. Other manufacturing processes, i.e., electronics, would likely be willing to pay even higher amounts for the relatively small amounts required.

Value of Water in Households

While willingness to pay for water delivered to households is readily observed and much studied, deriving a marginal value of water to households which is comparable and commensurate with estimates of raw water values in streams is relatively difficult. Household water, which is treated (filtered, chlorinated), stored, and delivered to the user on demand, is a much different economic commodity than the raw river water used in irrigation or in many industries. Hence, a deduction for treatment, storage, and delivery costs must be made to achieve comparability. A method suggested by Young and Gray using data developed by Howe and Lineaweaver^[13] estimates that lawn sprinkling is valued at about $150 per acre-foot and in-house uses as $250 per acre-foot (in 1982 dollars). A weighted average would be about $220 per acre-foot. Howitt et al.^[14] do not distinguish between industrial and household demand. Their municipal and household sector estimates for 1980 (in 1982 prices) are about $160-$200 per acre-foot.

Gardner and Miller report the price of water rights in the Colorado-Big Thompson project (in northeastern Colorado) transferable to urban uses to have averaged $2450 per acre-foot

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in 1981.^[15] Converting this figure to an annual acre-foot value requires assumptions regarding the appropriate capitalization rate and expectations about future inflation. However, at an interest rate of 8 to 9 percent (which seems plausible), and a long planning horizon, the figure is practically equivalent to the figures given above.

Hydroelectric Power Generation

Evaluation of hydroelectric projects has usually proceeded on the assumption that water is a free good, so that recorded efforts to value water in this use are rare. The procedure which has been developed is to value electricity in terms of cost of production by the alternative process of a steam-powered plant (alternative cost method). The value of water is then derived by deducting capital and operating costs of the generation and transmission system. The residual, if any, is attributed to the water resource (change in net income method). Specific value estimates vary according to the differences in head (the distance the water falls before turning turbines) but also with distance to load centers, energy costs of the stream alternative, and the cost of dam and storage reservoir construction relative to power output. Values also may be expressed for one site only or for several sites on a given river reach. Young and Gray report single site values ranging from $3.30 to $10 per acre-foot in 1982 prices in the western states, the higher values associated with sites with relatively large head on the Colorado River.^[16] Whittlesey and Gibbs report values in the Columbia Basin of over $30 per acre-foot (1982 prices) for water going through all dams below Franklin Reservoir, including Grand Coulee.^[17]

Valuing Water in Waste Load Dilution

Most analysts have adopted the concept that the value of a unit of dilution water is equivalent to the cost of treating effluent to achieve an improvement in water quality equivalent to the specified quantity and quality of dilution water. The results of these studies generally imply that dilution benefits, for the most part, are not large. Merritt and Mar^[18] showed dilution water in the Willamette Basin (Oregon) to be about $1.30 per acre-foot (1982 price levels). Gray and Young^[19] applied this technique for several regions, deriving estimates for diluting urban effluents ranging from $0.08 per acre-foot (Colorado Basin) to $3.25 in the lower Missouri. However, they derived a value of high quality water in the Colorado Basin for dilution of salinity at about $15 per acre-foot.

The Value of Water in Water-Based Recreation

Water-based recreational services, by tradition and policy, are not often priced by market processes. Hence, the normal problems of valuing water are compounded, since in this case, the value of water for recreation must be derived from a prior synthetic imputation of the value of the recreational services themselves. Moreover, recreational uses of water are often complementary to other uses, rather than competing with them. Thus, water stored for irrigation or flood control can often by enjoyed without diminishing its usefulness in alternative uses. However, growing recreation demand is creating situations in which these uses are competitive with other classes of instream and offstream use, but economic analysts have only recently begun work on measuring values which are suitable for comparing allocations among alternative uses.

Daubert, Young, and Gray^[20] formulated a direct interview procedure which elicits bids from recreationists on the value of water in flowing streams. Applied to a sample of visitors to the Poudre Canyon in northeastern Colorado, this approach yielded estimates of economic value related to flow in fishing, whitewater kayaking, and noncontact streamside recreation (i.e., picnicking). The resulting marginal values were (at a typical summer flow rate of 200 cfs) converted to dollars per acre-foot: $9 per acre-foot for fishing, $5 for whitewater sports, and $7 for the noncontact group. Walsh et al. performed similar analyses on western Colorado streams, reporting $13 per acre-foot for fishing, $4 for kayaking, and $2 for rafting, when flows were maintained at 35 percent of maximum.^[21]

These findings lend support to the notion that nonconsumptive uses, even though they are nonmarketed, have economic value to users. While many are skeptical of the validity of benefit estimates based on responses to questions regarding hypothetical consumption situations, the values cited seem plausible, and a preferable alternative technique to generate quantitative estimates of instream flow values has not been developed.

Summary of Direct Impact Analysis

Up to this point, it has been shown that:

1) The direct net economic value foregone from partially reduced irrigation water supplies will mostly fall in the range of $5-$30 per acre-foot, depending on location and type of use.

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2) The gain in net value of product or willingness to pay in industries and households absorbing water previously in agricultural use is five to ten times or more as high as the losses in the agricultural sector. Important direct economic values also are found in instream uses, particularly in power generation and recreation. (These latter uses are less often in direct conflict with irrigation, since they are largely nonconsumptive.)

These findings are summarized graphically in Figure 10.1. The horizontal axis represents the fixed supply of developed water in a representative river basin. Agricultural water values are shown in the left vertical scale, and urban-industrial values on the right. The step-function D_a represents the demand (value-quantity) relationship for agriculture. Maximum WTP would be in the $50-$100/AF range, but most of the demand is below that range. The step-function D_u , drawn in reverse from the right-hand axis, represents demand in nonagricultural uses. Maximum WTP is much higher than in agriculture. D_u intercepts D_a at a point such that 10 percent (more or less) of the water is most profitably used in nonagricultural pursuits, while the balance is profitably employed in irrigation. The function D'_u represents a hypothetical future nonagricultural demand, reflecting growth in those sectors. The gross gains to the regional economy from the shift from D_u to D'_u is shown by the area between the curves, MNOP, while the losses foregone in agriculture were MNQR. The net gain to the economy from the shift is then RQOP, and is likely to be quite large.

Indirect Impacts from Reduced Irrigation

Indirect income effects, often called secondary impacts, are the impacts on related economic sectors which are associated with changes in the level of irrigation. They are conventionally divided into forward-linked activities ("stemming from" effects), those which involve processing, marketing, and transportation of the farm products, and backward-linked activities ("induced" effects) which include supply of inputs (seed, fertilizer, machinery, etc.) to the farm sector.

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[Full Size]

Figure 10.1
Marginal Willingness to Pay for Water as Related
to Percent of Average Annual Supply: Agriculture
and Municipal and Industrial Combined
(for a Representative Western River Basin)

Indirect impact measures must not be confused with direct impact measures. Indirect income measures usually refer to either gross revenue charges or payments to all primary resources, rather than the net revenue shifts measured in direct impact analysis above. Therefore, direct economic impact measures and indirect economic impact measures, even though both are expressed in dollars, are not strictly commensurate.

The Limited Indirect Impact Hypothesis

For purposes of this chapter, the main question regarding indirect impacts is the relative magnitudes in losing sectors versus gaining sectors. Concern over the magnitude of potential indirect effects in irrigation-based subregions is the basis for public action to avoid loss of irrigation in areas where supply depletion is imminent.

My conclusion regarding the importance of irrigation to regional economies has, in some circles, proven to be

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controversial. Stated simply, my belief is that irrigation developments have had a relatively minor impact on regional economies in the post-industrial era. The converse proposition is that loss of 10 to 20 percent of the irrigation supply in the West would not have an appreciable effect on regional income or employment.

Evidence for this proposition can be put forward in three classes: casual observation, statistical analysis of growth impacts on water development, and detailed studies of the structure of regional economies.

Casual Observation

Consider any of a number of irrigated areas with no other industry or governmental installation to bolster the economy, beyond the suppliers and processors linked to agriculture. Many tens of thousands of acres of irrigation, particularly when the products are forages, grains, or cotton, are required to support even a small town. The numerous small communities dotting the Ogallala-High Plains region provide one example; Yuma and Pinal Counties in Arizona, another.

Econometric Growth Analyses

More systematic statistical analysis of growth impacts also have not been able to identify significant regional growth impacts from irrigation. Only a few detailed ex post analyses of regional growth impacts associated with irrigation projects have been published. Cicchetti et al., under contract to the Bureau of Reclamation, employed regression analysis to study the effect on various indices of regional economic growth of a number of variables representing Bureau of Reclamation investments.^[22] Census data were obtained for numerous economic subregions in five arid western states, for 1950, 1960, and 1970. Variables representing USBR investments in irrigation facilities were not found to have any significant impact on subregion income, and only a small and not convincingly significant impact (t-value = 1.62) on the value of farm output.

In a similar study, Fullerton et al. used econometric techniques to estimate the quantitative impacts of federal water resource development on economic growth in 246 counties in 7 western states.^[23] The authors summed up (p. 22):

The null hypothesis that regional economic growth is caused by investment in water resources of various types is given virtually no support from these empirical results.

Studies of Regional Economic Structure

Other detailed regional studies, such as Kelso et al.,^[24] yield similar inferences. The recent investigation of the Colorado Ogallala-High Plains region found that the 600,000 acres irrigated in the area directly employed about 1200 workers (one man-year = 2000 hours), while withdrawing 1.1 million acre-feet of water annually. Indirect employment in the region associated with irrigation from the Colorado Ogallala accounted for another 1800 workers.^[25] Our conclusion was that the 40 percent reduction in irrigated crop production, employment, and income anticipated over the next four decades would have an imperceptible effect on the state economy, since the impact would amount to less than one-tenth of one percent of the state's work force. Gollehon et al. studied the effects of reduced irrigation due to energy development on regional employment and income in eleven Rocky Mountain region subareas, in Montana, Wyoming, Colorado, and New Mexico.^[26] The area studied encompassed nearly one million irrigated acres, producing mainly forages, and is supplied by 3.1 million acre-feet of water. A 20 percent reduction in water supply to this group of subregions would cost the area about 450 jobs directly in farming and about 900 jobs in the region as a whole.

Indirect effects are often measured by reference to "multipliers" derived from a regional input-output (interindustry) model which indicates the monetary value of income generated elsewhere in the economy in relation to a dollar's worth of increased income in the sector of interest (i.e., irrigated crop production). Applying the multiplier to estimates of increased (or reduced) crop sales yields an estimate of increased (reduced) economic activity in the region represented by the model.

The income multipliers for the irrigated agriculture sector are among the highest of all economic sectors, since each added dollar's worth of crop output generates economic activity in processing sectors, such as feedlots, dairies, and packing plants. To project what would be the net regional effect of reallocation of the water resource, however, the analysis must be carried further. I have computed the predicted income effects in California of an additional unit of water in several selected irrigated agriculture sectors and in four of the rapidly growing sectors in the state's economy (Table 10.1). California was selected because of the size and importance of its irrigated sector, and because the changes being examined are likely to be registered early in that state. The income projections would probably not differ much in other western states.

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The income measured here refers to payments to primary resources. An acre-foot of water used in hay and pasture production yielded in 1977 about $30 of direct income, $60 of direct-plus-indirect income, and $90 of direct, indirect, and induced incomes. Other agricultural sectors are considerably larger. Comparing the industrial sectors, it is seen that total annual income per acre-foot is several hundred to several thousand times as large as in irrigation.

Job creation is another aspect of regional growth policy. The water requirements per worker for the same sectors are shown in Part B of the table. Less than one worker per year was directly employed in association with 1,000 acre-feet of water in hay and pasture production in California. This compares with 8,000 to 20,000 workers per 1,000 acre-feet in the selected industrial sectors. Considering indirect and induced as well as direct employment shows similar relationships.

Indirect Impacts:
Summing Up

The analysis of indirect regional economic impacts yields similar inferences to those reached concerning on-farm impacts.

1) The indirect losses to a region giving up irrigation water, while not insignificant in terms of either monetary flows or employment, will be dwarfed by the gains in nonagricultural sectors.

2) As in direct impact analysis, there are stair-steps of impacts, when analyzed on the basis of returns per acre-foot. These steps parallel the steps in the direct analysis, in that forages and food and feed grains, which account for over half of water use in western states, yield relatively small indirect employment and income effects, while the emerging manufacturing and service sectors yield relatively large increases per unit water of employed.

Caveats

Space and time limitations preclude discussion of several important aspects of the subject. Specific localities are likely to feel large proportional impacts of increased urban demands for water. The use of state data may mask the seriousness of these effects of water reallocation. Where the water is transferred to distant uses, rather than in the locale of agricultural application,

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the community left behind may suffer significant proportional losses of income and employment; the Owens Valley is an example. Also, the question of indirect impacts on public sector activities and investments (schools, roads, health care, public safety) is not considered here. Finally, little information is available on indirect impacts from instream uses, and that topic has not been touched on in this paper.

Policy Implications

The preceding analysis has shown that as the western states have been transformed from an agriculturally-based economy toward more manufacturing and eventually to a primarily service-based economy, the proportion of the irrigation-agriculture sector to total income and employment has declined. In particular, the proportion of direct and indirect employment and income generated by the last 10-20 percent of water in irrigation represents an imperceptible portion of the economy of any of the western states.

We should recognize that changes between sectors are the natural consequence of an evolving economy.

Policy Implications Regarding Farmers Facing Losses of Agricultural Water Supplies

In the case of farmers who have a renewable source of supply (usually surface water or aquifers interrelated with streams), the existence of a problem turns on the degree to which property rights in water and land are protected by state and federal law, and hence, whether or not due compensation will be received by the farmers losing the water.

I perceive a relatively limited threat in this instance. Most farmers who have sold water rights (either directly or with associated lands) have not only been amply repaid for foregone productivity of their water, but have shared liberally in the benefits of alternative uses. Land and water values have been greatly bid up in the face of anticipated urban, industrial, and energy demands. The fact is that large acreages with associated water rights in regions of urban growth are held speculatively (by farmers and others) in anticipation of further asset appreciation. Those who are forced out of farming are "crying all the way to the bank," and to a subsequent reentry to farming where land and water is cheaper, or, if desired, to a comfortable retirement

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in Sun City, Honolulu, or Acapulco. Chapter 18 in this volume reports on trends in formalizing property rights in water throughout the West. This trend to firmer property rights in agricultural water should be encouraged, both to aid in reallocation to higher valued uses and to assure adequate recompense to resource owners.

Policy Implications Regarding Losses to Indirect Beneficiaries of Irrigation

The protections afforded by property rights to primary users of water against the loss of assets is not available to the indirect beneficiaries, who are linked to irrigated agriculture as input suppliers or processors of products. Even so, at the risk of appearing insensitive, I can see only a limited basis for concern, and not much need for formal public action in response.

Most individual transfers of irrigation water supply are neither large nor unexpected, enabling those indirectly impacted to adapt to new conditions. As seen above, a small amount of water from agriculture can fuel a large change in a region's population and industrial base. Even in rapidly growing metropolitan areas, such as near Denver, Phoenix, or Los Angeles, irrigation continues, and the associated indirect economic activity and employment decline only slowly. In the face of slowly declining demand, workers generally have time to plan for career change, and business and public sectors have time to depreciate their investments without suffering severe economic losses.

Finally, it might be observed that relatively few instances outside of irrigated agriculture can be identified where secondary impactees are the subject of formal public policy concern. Risks are inherent in a changing market economy, as testified by the changes affecting millions of workers in the industrial Midwest. We need to think carefully about the justification for public intervention in this case, unless it is a part of a more general response to the structural changes throughout the economy.

Conclusions

The evidence regarding the role of irrigation in regional economies in the semiarid West suggests that under modern conditions of production, irrigation accounts for a relatively minor portion of employment and income. This is particularly true for the half or more of the irrigation water diversions used for forage, and food and feed grain production. Second, significant

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growth in the nonagricultural sector can be accommodated with relatively minor shifts from irrigation. Thus, we can expect only a relatively small impact on local economies by the anticipated limited reduction in irrigation water use. The general perception that irrigation has been an engine of economic growth, and conversely that loss of irrigation would have major economic consequences, is not supported by a close examination of the structure of the economy. This misperception probably arises from what Boulding terms the mythical role of water in human society, abetted by the public relations activities of the "iron triangle" of bureaucracy, construction firms, and legislators who have a stake in "business as usual" rather than adjusting to the imperatives of a maturing water economy. I see a limited need for special public policy to solve problems which are similar to, but less severe than, those in other sectors of the changing economy.

Discussion:
Charles V. Moore

Professor Young has presented a succinct overview of the impacts of shifting water supplies between agriculture and other uses. I find very little with which to disagree, although a couple of important points were made that may have been missed by the noneconomist in the rush of jargon that we economists tend to use in communicating with each other. I would like to amplify and expand on three points made or alluded to in the chapter.

First is the possible regional benefits from a transfer of water between agriculture and municipal and industrial users. Young clearly shows that water transferred from agriculture to the printing and publishing, aircraft, communications, or computer and office equipment manufacturing industries will generate increase in regional income and employment.

Significant benefits can also accrue to the region if water is transferred within agriculture. The institutional arrangements under which water was originally allocated in the western states (appropriative water rights, riparian rights, or long-term contract) did not take into account the productivity of this water as a criterion.

"First in time" only meant that lands closest to a water source received the largest and most reliable water supplies. Riparian lands may in fact contain some of the poorest soils in a river basin. Service areas for governmental water projects are more closely related to the political power of the local elected representative than to the productivity of the soils to which the water is to be applied. Thus the probability that lands with the highest productivity also have the largest and most secure water supply is very small indeed. The probability that existing institutions have allocated water in the exact same manner as a free market, where all potential water users have an equal opportunity to bid for the supply of water, is almost nil. When one irrigation district has rights to seven acre-feet per acre and another district not too many miles away has rights to only one acre-foot, this seems prima facie evidence to prove my point.

If a generously endowed district is applying the last acre-foot to a field of grain sorghum with a return of $5 per acre-foot and next door a "Johnny-come-lately" district with very junior water rights has highly productive cotton or perennial crop land left idle with a potential return of $40 to $50 per acre-foot, both the region and the nation would benefit from a transfer.

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Howitt, Mann, and Vaux developed an interregional programming model of California to analyze the potential for water transfers between subregions of the state and between agricultural and urban users.^[1] Assuming that water laws were allowed to evolve so that a competitive market for water rights was established, these authors found that, compared to maintaining existing water laws and allowing new water supplies to be developed only when users are willing to pay their full costs, the quasi water market saved up to 2 million acre-feet of water annually, with net benefits to buyers and sellers of over $70 million. Annual benefits would increase with time and population growth to $83 million by the year 2020.

I would like to comment on another point alluded to by both Young and Whittlesey: how price will be determined in water sales. Both provide estimates of the incremental value in use for irrigation and industrial water. The range of these values is quite wide, varying from zero to over $40 per acre-foot at the margin for agriculture, and up to $1,600 per acre-foot for municipal and industrial users.

To make their models workable, economists make some assumptions with respect to supply and demand functions. For one thing, we assume that demand and supply functions are continuous, and that both buyers and sellers know and understand these relations (our assumption of perfect knowledge). However, in the big, cruel world things don't always work that way. The incremental values in agriculture provided by Young and Whittlesey become the lower bounds or reservation prices those growers would be willing to accept. The incremental values for municipal and industrial water then become the upper limits to price offers by municipalities. The final market clearing price will be somewhere in between, after allowances are made for transportation costs.

Given that in most states there are many landowners and only a relatively few large metropolitan areas interested in purchasing water rights, the water market would be one characterized by an economist as ologopolistic. In other words, the bargaining power or market power will be in the hands of the urban areas. A market structure with most of the bargaining power on the side of the buyer will tend to reduce prices paid to sellers, and shift many of the benefits to urban areas and away from irrigated agriculture.

One suggestion for equalizing the bargaining power in the marketplace and thus making the market more competitive

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would be for landowners to create a water broker or bargaining agent to represent their interests. This broker or agent could also serve an important function by consolidating small lots, or to coin a word, "dribbles," into units large enough to be attractive to municipal buyers. This function would be especially important in California, where the legislature has recently passed a bill allowing landowners to sell water saved through water conservation efforts. Adjustment costs to limited regional water supplies will be minimized through water transfers away from marginal soils or marginal farms, rather than wholesale shifts of entire districts out of agriculture.

Every time the subject of water transfers out of agriculture comes up in California, the question of the Owens Valley is raised. The Owens Valley is located on the east side of the southern Sierras; in the 1920s, the City of Los Angeles purchased land and water rights in the valley and subsequently exported water, with farming in the valley reverting to dryland agriculture. Although books and movies have described the "rape of Owens Valley," it is my opinion that the expressed anger stems from the feeling that valley landowners sold out too cheap, rather than that water rights were sold per se. The crux of the matter is that the sale price was based on the agricultural value of the water, not on its value to the buyer. If Owens water rights had been sold at something in the neighborhood of the 1980 equivalent of $150 per acre-foot per year, a much smaller fuss might have ensued.

One final point is related to the secondary impacts of water transfers. Young is correct in saying that, from the national point of view, secondary impacts "wash out". I would suspect that in a state as large as California this relation would also hold. In states with a smaller economic base than California, however, I would expect to find measurable impacts.

The question I would like to raise also, without appearing crass, is "Why all the fuss?" What is the difference between the water transfer case and the state building a freeway which bypasses a small town and leaves its commercial section to wither on the vine, or the federal government opening or closing a military facility? Did anyone in the southwestern states offer compensation to the thousands of sharecroppers growing cotton in the southeastern U.S., when subsidized irrigation water favored the shift of the location of cotton production westward?

Traditionally in this country, people injured by these types of structural changes (what economists call "pecuniary

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externalities" or damages) have not been compensated, nor has government felt it necessary to intervene to prevent adjustments from occurring. When a movie theater shuts down due to lack of business, government is not expected to move in to prevent the closing just because the person operating the popcorn stand next door will be faced with a significantly reduced income.

Discussion:
Norman K. Whittlesey

I agree with Young's findings that reallocation of water from agriculture to competing uses is unlikely to cause serious problems for the agricultural community or for other regional and national economies. Both the farmer and the nation's economy will profit from reallocations of water to higher valued uses. The total amount of water exchanged in any given area will usually be relatively small, providing ample room for adjustment by all affected parties.

Though water is a "mobile resource" leading to problems of capture for private property management, it is difficult and expensive to move far from present locations. Hence, the values given to water are likely to be site-specific and highly influenced by other resources, competing water uses, the assumptions of the analyst, plus many other factors.

Young acknowledges that different assumptions can lead to different estimates of agricultural water value. However, he implies that the differences between agricultural and nonagricultural water values are so great as to render the correct value unimportant. This may not always be true.

I have developed an example in Table 10.2 to show how assumptions can affect the estimated value of irrigation water. These values are based on consumptive use, so that an appropriate adjustment would be required to obtain values for total water diversions.

The first value is a very short run measure called "returns above variable costs." It could be the rental price for water in an

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emergency drought situation, where it could go even higher for the rescue of perennial crops like orchards or vineyards. This value of water is sometimes called "value added" to indicate the economic impact of agriculture in a regional or state economy as estimated by an input-output model. In this context, it is a measure of payments for fixed resources used in the production process. This value would not likely be used to determine a market price for permanent exchange of water rights, nor would it provide any indication of the profitability of agriculture.

For water exchanges that leave land and undepreciated irrigation facilities idle, we move close to the average value of water to determine its market price and measure the social impact of exchange. This value is probably best reflected by the returns above costs including dryland rent ($70/acre-foot). But if the irrigation facilities are allowed to depreciate normally (or salvaged) before the water is exchanged, we should probably move to the next water value ($38) which deducts the current payment for the irrigation facility.

If the land and irrigation facility usefulness are not reduced, the value of both resources must be deducted from the value of water sold. At this point the marginal value of water will be

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near zero, as reflected by the last line of the table. No rational farmer is going to sell water at this price, even though it probably reflects the social impact of small quantities of water diversions to alternative uses. This is Young's conclusion.

This exercise illustrates that alternative agricultural water values can be used to compare with values in competitive uses. The result is site-specific, crop-specific, and operator-specific and, to a large extent, depends upon which side hires the "best" economists and lawyers in the bargaining process.

Even after deciding which is the proper agricultural value of water to capitalize, we are left with questions about discount rates and planning horizons in establishing market exchange values. I believe that it would be possible to argue for lower discount rates and longer planning periods in agriculture than for industry. Such assumptions can move the values of agricultural and competing uses closer together than is apparent when only comparing annual rental values. In any case, the derived demand for water in most industrial uses is very inelastic and can generally be satisfied with little impact on agriculture.

Generally, I would agree that small incremental adjustments in water use are unlikely to cause any serious secondary economic impacts. We should always expect measures of impact on the national economy to be positive for water reallocations. However, we must recognize that rather large economic communities throughout the West are based solely upon irrigation. As the quantity of water and distance to the new use are increased, the negative local impacts will also increase, regardless of how well the farmer is compensated. There are examples of whole communities being significantly reduced by the thirst of Los Angeles and the California water system-not to deny that the state and society have been made better off after the reallocation.

A recent study in Washington State provides some estimates of secondary impacts of irrigation.^[1] Though subject to all of the vagueness of input-output analysis, the results do show greater secondary impacts than the studies quoted by Young. Increased value added at the secondary level was approximately $540 per acre or about $140 per acre-foot of water diversion. Additional employment created at the secondary level equaled one job per 26 acres or 100 acre-feet of water diverted.

To conclude, we should not be unduly concerned about reallocation of water from agriculture to competing uses. In fact, we should aid that transition whenever possible through better economic studies and improvements in the legal and institutional

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system for water exchange. The net societal impact will be positive. We must, however, be prepared to deal with problems of primary value and secondary impact when they do arise.

Chapter 11:National and International Commodity Price Impacts

Chapter 11-
National and International Commodity Price Impacts

by Earl O. Heady

Abstract

Reduced supplies and higher costs for water in the future will lead to higher food costs. However, these tendencies cannot be separated from other variables which also will cause higher prices for food. Major variables affecting food prices include world population, per capita income, and agricultural technology in developing countries.

Developing countries have capabilities to produce enough food to keep real prices at reasonable levels. These outcomes will overshadow U.S. water supplies in determining future food prices. Another condition of similar importance in food prices is the general level of agricultural technology in the United States. Some agriculturalists believe that crop yields are plateauing. If so, these yield limits would dominate water supplies in affecting food prices. However, other agricultural scientists foresee technological advances in crop and livestock production which will entirely offset water supplies in determining U.S. food prices over the next 30 years.

Statistical models to predict the impact of water supplies on food prices do not exist. However, a programming model providing a normative analysis indicated that reduced water supplies which cause a fourfold increase in water prices would increase food prices by 6 percent. Reduced water supplies in combination with restraints on land use and soil loss would cause much higher increases in real costs of food. Based on estimated food demand elasticities, each 1 percent decline in food supplies due to reduced water availability would increase food prices by 4 percent in terms of domestic conditions and .75 percent in terms of world markets.

The United States has had an abundance of land, and real food prices have declined over most of this century due to a number of planned conditions and favorable prices for resources. Some suggest that these conditions will not prevail in future because the

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suggest that these conditions will not prevail in future because the nation is approaching a plateau in per-acre yields. Agriculture increasingly competes with other sectors for surface water, is exhausting its groundwater supply, and is faced with increasing real prices for energy. We will return to these propositions at a later point. The extent to which these limits to food supplies and rising real costs of food will be realized depends on our ability to recreate conditions of the past, which allowed us to develop cheap substitutes for land and to increase farm output much faster than population growth.

Reduced supplies of water for irrigation in the western states, with subsequent restraints on supplies of food commodities, will have their impacts on domestic and international markets since the nation exports a large proportion of its grain production. Because of strong interdependence of U.S. agriculture with international commodity markets, food prices in the U.S. will be closely related to variables of food supply and demand the world over. Hence, generally we must relate water supplies of the West and their effect on food prices, to food production and consumption of the world. Domestically, the impact of changes in irrigation will be offset or augmented by future technological developments and factor prices for the rest of U.S. agriculture.

World Variables Affecting U.S. Commodity Prices

The future supply and real price of food depends on a complex set of variables and conditions-of which one is the U.S. supply price of water for agriculture. The real price of food will depend as much on demand variables as on those on the commodity and resource supply side-of which water is one element of a major set. Certainly two of the dominant demand variables are the rate of growth of population and per capita incomes in developing countries. Even with a reduction in their birth rate, total populations will still increase greatly since a large portion of these populations is still below child-producing age. But nearly as important are potentials in per capita income. The income elasticity of demand for food generally is high in developing countries. It is high even in relatively developed countries such as Eastern Europe and centrally planned economies where institutional restraints, rather than market demands, has limited use of meat and feed grains. The further release of these institutional

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restraints could mean a further heavy leverage in demand and prices for U.S. agricultural exports. In the 20 years from 1960 to 1979, we increased grain exports by 300 percent. In 1979, we exported the product of one-out-of-three acres of grain, including 33 percent of corn production, 57 percent of wheat production, 37 percent of soybean production, and 46 percent of all grains. Obviously, if it were not for this export demand, American agriculture would, given our technology and stock of natural resources, be an extremely depressed industry, and we would not be worried about domestic land and water supplies and strategies.

World export demand quantities are not, of course, independent of food supplies in the respective countries. Export demands of the future will depend on the ability of potential importing countries to increase their domestic supply of foods. The "supply variables" of other countries affecting the demand for U.S. exports include (a) improving technology through research and education, including high yielding and water-fertilizer-pesticide responsive varieties, (b) bringing more land under cultivation, (c) intensifying agriculture and land and water use through extended multiple cropping, (d) further development and better allocation of water supplies, (e) improving the laws and institutions governing the allocation and use of water, (f) improving livestock production, and (g) prevention of postharvest waste. These world variables and conditions relating to supplies directly, and through domestic supplies to demand for U.S. exports, are vast and complex and readily could offset or reinforce any impacts of limited U.S. water supplies on commodity prices. The fact that they have the potential of offsetting reduced U.S. water supplies over the next 30 years is evident: developing countries have 64 percent of the world's cereal acreage but produce only 40 percent of the total supply. In the period 1934-38 their average grain yield was 1.14 tons per hectare, compared to 1.15 tons for developed countries. However, by 1973-76, developed countries had increased per hectare yields to 3.0 tons, but developing countries to only 1.4 tons. If developing countries increase cereal yields only to the developed country level, even with currently known technologies, cereal production could be increased by 67 percent. And that is a modest possibility, since developing country locations roughly conform with the tropical area of the world, with much greater opportunity for multiple cropping and utilizing solar energy compared with the temperate climates of developing countries.

Cropland Conversion and Land Substitutes

A considerable proportion of the land which could be converted to crops has been shifted over the last three decades. FAO^[1] estimates that 125 million hectares over the world could be improved and irrigated in a decade, that food production could be increased by 3.8 percent per year to the year 2000, with 28 percent of the increase coming from added land. Exactly how much land could be converted at realistic costs remains somewhat uncertain. Some estimates^[2] suggest that of potentially arable land, only 22 percent in Africa, 11 percent in South America, and about 45 percent worldwide is now under cultivation. Others are even more optimistic. These estimates undoubtedly are too optimistic, and use of fragile lands would cause some environmental deterioration. However, there is still some land which can be converted to crops even in the United States. The 1977 SCS inventory (RNI) estimated that as much as 127 million acres^[3] could be converted to the equivalent of Class I and II land. But most researchers expect that world food supplies can be increased most readily by use of improved technology on land already cropped. While some estimates are pessimistic under any scenario, other estimates indicate that over the next 20 to 30 years world food supplies might push ahead enough to allow a worldwide increase in per capita consumption.^[4] Food production in developing countries probably could be increased by 3.5 percent per annum to the year 2000. (Existence of the potential does not guarantee implementation of policies to attain it, however.)

Yield Limits and Production Possibilities

In addition to those variables of world food demand and supply, another set of circumstances will either dampen or augment the price effects of reduced supplies of U.S. water for irrigation. These relate to future technological possibilities in U.S. agriculture generally. Over the last decade several agriculturists have proposed that U.S. yields are beginning to plateau. If this is true, then reduced water supplies would have a very significant effect in raising commodity prices. If, however, future productivity advances are as large as those of the recent past, the commodity price impact of reduced water supplies could be small. It is possible that the seeming emergence of yield limits in the

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mid-1970s was due to weather and the shift of somewhat marginal land into grain production out of former cropland set-aside. When observations for 1979-82, years of record U.S. crop yields, are included, a yield plateau cannot be statistically verified.^[5]

Some persons are optimistic about our ability to generate new technologies which can continue to increase productivity levels. Lu et al.^[6] estimate that if future additions to expenditures on agricultural research only offset inflation, productivity growth in agriculture will slow to 1 percent by 2000, while a real growth in research and development at 7 percent would increase it by a 1.3 percent rate. Whether diminishing returns to agricultural research investment will be encountered as efforts are turned to "exotic" technologies, as compared to the more conventional ones emphasized in the past, is unknown. Fuller^[7] believes that we already are at a point where diminishing returns to research can be expected. Wittwer, an optimist, says "far from achieving scientific and biological limits, the world has only begun to explore the capabilities of increasing agricultural production." He also states that "biological limits have not been achieved for productivity of any of the major food crops . . . a comparison of average world yields for every major crop shows a production ratio of three to one, with some records greater by a factor of six."^[8] In a later analysis, he suggests that the genetic potential of corn yield is 900 bushels per acre.^[9] Other scientists are optimistic in terms of possibilities in genetic engineering; increasing crop adaptation to stress conditions; improved irrigation technologies; hybrid wheat; increased protein content of corn; breaking the yield barrier of soybeans; improving photosynthetic efficiency of plants; developing nitrogen fixation by nonleguminous plants, and improved efficiency of those that now fix nitrogen in the soil; nontraditional approaches in genetics to more effectively use available genetic material; improving the efficiency of nutrient uptake of plants; developing appropriate technologies so that land not now cropped can be substituted for resources which are growing increasingly scarce; and a host of other innovations.^[10] Even more than in the past, the urgency is to induce a flow of technologies consistent with the relative supplies and prices of resources which will prevail in the future. With a systematic ordering of our research, I am optimistic about our ability to continue growth in agricultural productivity and food production.

Starting in the 1920s and abetted by both public and private investment in research and favorable real prices for energy and chemicals, we developed a vast set of new capital inputs (fertilizer-responsive crop varieties, improved chemical fertilizers,

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pesticides, etc.), which substituted for land. The supply of land was thus made less binding on food supplies, and the real price of food declined rather continuously up to recent times. Of course, during much of this same period, low energy prices and a favorable public pricing policy also caused water to be substituted for land as irrigated acreage increased. These substitutions were so vast that during times of the 1960s and early 1970s the nation paid farmers for holding up to 65 million acres out of production. Another indication of this substitution is the fact that total grain production in 1910 was 120 million tons on 193 million acres, but in 1979 was 316 million tons produced on 162 million acres. With the prevailing technologies of the 1960s and early 1970s, the nation's food supplies could have been maintained without important price impacts (except for specialized commodities adapted to specific climatic conditions) had we used the 60 million acres held out of production instead of any irrigated acreage. Again, in the future, the impact on commodity prices of reduced water supplies to agriculture will depend on the availability of water-substituting inputs and technologies. Their availability, in turn, will depend on the nation's agricultural research expenditures and the real price of the inputs. Whereas the real prices of chemicals and energy-based inputs declined in previous decades, the probability is that they will increase in the future along with energy prices. The public challenge is an induced research program which relates technologies to resource prices.

While we were able to develop technologies for land and water which allowed us to implement a large world food aid program even while holding over 60 million acres of cropland idle during the 1960s, surplus conditions of this extent are not likely to return in the future. Export demand is expected to continue to grow along with world population and per capita incomes, even if not as rapidly as in 1970-79. Aside from declining U.S. water supplies, I expect the real price of food to increase in the long run due to greater population and income, institutional changes which allow centrally planned and developing nations to participate in world grain markets, tightening restraints on limited resources worldwide, and, especially, rising energy prices. These rising energy prices will dampen somewhat the rate of development of agriculture through increased real prices for several categories of inputs and increasing costs of pumping groundwater.

If we had a closed economy where this complex set of demand, supply, and resource price variables had been operational for 40 years with carefully collected time series observations, we

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probably could predict or simulate the net impact of declining U.S. water supplies on commodity prices. However, with the prices of U.S. agricultural commodities increasingly linked to resource supplies, developmental and institutional changes, and food supply-demand variables in many countries, it is not possible in a few months to quantify a model which can give these net effects. There can be many possible combinations and permutations of these variables in the future. Their expected effect is to increase real prices for farm commodities, but the exact extent that reduced U.S. water supplies will add to this direction currently cannot be deciphered from this complex. If one set of variables dominates in direction and magnitude, they will offset the tendency of decreased U.S. water supplies to increase commodity prices; if another set dominates, a scarcity of U.S. irrigation water will augment their effect. Farmers, ranchers, and land owners collectively would be best off under the latter, consumers would be better off under the former.

Some Estimates of Commodity Supply Prices under Various Water Regimes and Other Scenarios

For the assignment undertaken in this chapter, it would be useful if we could pick out specific future dates, set all exogenous and some endogenous variables fixed at expected levels, vary (reduce) water supplies, and "read off" the resulting expected increases in commodity prices. Data for statistical, econometric and other methods or models for these types of predictions do not, however, exist. Nor are they likely to do so in the near future. Changes in the variables and institutions affecting water supplies and prices may change both gradually and discretely in the future. In the meantime, observations on all of these expected changes do not exist in time series data so that we can statistically predict their future impacts on prices. Many things which will affect water supplies and prices will only occur in the future. Thus our main opportunity to appraise a future of reduced supplies and higher prices in interaction with other events such as greater exports, soil conservation programs, changes in U.S. land use, technological developments, and conservation and environmental programs is to simulate the future. Some data are available, which we will summarize as one indication of potential impacts of water supplies and prices on commodity and food

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prices. While these are not perfect models, and have limitations that we know better than anyone else, they give probably the best data available to gauge the future in terms of our specific assignment.

For some years we have incorporated groundwater and surface water sectors for the 17 western states into large-scale interregional programming models of U.S. agriculture. Generally, these models allow transfer of certain land not now in crops to cropland, project future nonagricultural demand for water by regions, suppose a future reduction of groundwater supplies through use of water at only recharge rates, consider trend and other levels of yield improvement over time, and incorporate alternative population and export levels. These variants provide alternative scenarios for normative evaluations of potential changes in regional and national production and resource use in agriculture. A parallel analysis also is possible of resource returns and commodity supply or shadow prices under these scenarios. An early one of these analyses reduced use of groundwater to recharge rates by the year 2000, used trend levels of yield increase, and decreased surface water availability according to projected nonfarm and varied population levels by the year 2000.^[11]

Some alternatives in supply control and environmental enhancement also were considered. Only two levels of export demand were used and gave somewhat conservative estimates for 2000. However, since domestic and export demands were exogenous to the model, variations for them can be combined in a scenario which better represents current expectations of future exports. If we select a combination of domestic and export demand levels which approach current projections, suppose groundwater use only at recharge rates by the year 2000, and project a diversion of 16 million acre-feet of water from agriculture to other uses under trend technology, we discover real supply (shadow) price increases of about 10 percent for feed grains, 11 percent for food grains, 10 percent for oilseeds, and 20 percent for meat, as a result of the restricted water supply. Fruits, vegetables, and nuts were exogenous to the model and thus shadow or supply prices were not generated for them. Either dampened or accentuated trends in total demands and agricultural technology would, of course, change these normative supply prices-or even any set of price estimates that might represent econometric projections of equilibrium prices. In every case, it is not easy to isolate future price changes due alone to demand changes, technological changes, and reduced groundwater and

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surface water supplies for irrigation. In a system in which all of these and related variables were endogenous, a change in magnitude of one variable over time would induce, to an extent, compensating changes in other variables.

In models for the National Water Assessment (NWA), the Resources Conservation Act (RCA), and other national commissions or agencies, we generally have included land and water use, resource (land and water) returns, commodity shadow prices, and related variables on an endogenous basis. The dominating impact on farm commodity shadow prices results from the level of exports, the level of technological change assumed for all of U.S. agriculture, the amount of land included in the cropland base, and the tightness of restraints on soil loss. U.S. agriculture needs quite different amounts of water to meet specified commodity demands under various combinations of these variables or conditions. The shadow price of water and its relationship to the supply prices of agricultural commodities also differs greatly among these combinations or scenarios.

A set of shadow prices generated for solutions of the RCA model for the year 2030 suggests the general interaction of these quantities.^[12] The "required water use" and shadow or supply prices are shown in Table 11.1 for (a) a base-1 solution (A) which uses a standard (380 million acre) cropland base, (b) a base-2 solution (B) which allows the additional 127 million acres inventoried by the Soil Conservation Service^[13] to be used in crop production, while technology is at trend levels and exports at levels of base-1, (c) a high technology scenario (C) with yields increasing 60 percent faster annually than trend, while the land base and exports are the same as base-2, (d) a low technology scenario (D) with yields increasing at about only 75 percent of trend, with the land base and exports the same as base-2, and (e) a maximum production scenario (E) where technology is at the high rate and the land base is the same as in base-2.

It should be remembered that these are shadow prices resulting from a programming model specified to allow analysis of the scenarios described. To my knowledge, no other quantities exist to suggest potential values for these resources and commodities under the conditions set forth. The prices for water represent the value of water, at the margin, to produce the nation's output under the combination of conditions outlined. The supply prices for the commodities show the levels necessary to attain the prescribed level of production under the resource and technology conditions summarized. (Domestic demand and exports are

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projected to 2030 in terms of population, per capita income, and export trends.)

The figures indicate that under trend technology and the potential of adding 127 million acres of land as inventoried by the SCS, water use could decline by 10 percent in comparison of base-2 with base-1. Water value would decline while commodity price would be 29-50 percent lower than in base-1, with a 33 percent smaller land base. Water use in the high technology-high land base decreases by 35 percent over base-1 solution. Supply prices for water and commodities also would be lower than in base-1. With a low technology but high land base (D), water use would increase by 9 percent over base-1, but production capacity, under high technology and the larger land base, would still be great enough that water value and commodity supply prices would be lower than in base-1. Hence, if water supplies for endogenous crops were reduced considerably below the D level, commodity prices could move upward considerably, exceeding those of base-1 which suppose only trend technology and exports.

The maximum production scenario explores the potential if production, under conditions of the high land base and high technology, were raised to the maximum level possible. To fully use this land would require 110 percent more acre-feet of water as

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compared to the base-1 scenario. It also would increase water shadow price by over 100 percent and commodity prices by an average of about 67 percent over the "normal" or base-1 scenario. The higher water and commodity prices are a function of the level of production, a complete use of land, and the potential of an enlarged water use under very high exports. If this amount of water available in 2030 was reduced, then commodity prices would be raised further-purely as a reflection of restrained water supplies. Unfortunately, we did not run the model under this scenario.

Another study organized to examine the potential of U.S. agriculture for meeting domestic and export demands for food, attaining soil and water conservation, and improving the environment, was the National Water Assessment (NWA) made for the Water Resources Council.^[14] It also was a study of potentials made by a normative interregional and national programming simulation model since (a) quantities to be examined were those which had not been experienced in the past and thus lacked time series observation for econometric or statistical prediction, and (b) scenarios were designed to examine the full capacity or potential of the nation's agricultural resources under full production and certain restraints on soil erosion and water availability. The analysis was made for the year 2000 and assumed exports at current levels projected to that year, use of groundwater at recharge rates by 2000, and trend level yield increases. Under this base scenario of high exports but no other restraints on land use and water availability, water use for the endogenous crops and livestock was 86.7 million acre-feet. Prices (in 1972 dollars) were $1.82 for corn and $3.84 for wheat. Another scenario was the same except that (a) soil loss per acre per year was restrained to t-levels, (b) no further development of wet lands for crops was allowed after 1975, (c) the water supply available for agricultural uses was reduced (to 64.6 million acre-feet) to allow minimum streamflow for maintenance of water quality and protection of fish and wildlife, and (d) livestock wastes could not accumulate but must be returned to the land. Under these conditions, prices (in 1972 dollars) increased to $2.89 for corn and $8.82 for wheat. Soybean and cotton prices increased similarly. When soil loss restraints alone were applied, commodity prices remained near the level of the base scenario. Hence, the above increases could be imputed mainly to the water restraint which was reduced (for endogenous crops) from 87.6 million acre-feet to 64.6 million acre-feet.

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Water Price Changes

Not all water prices have been subject to market forces. For some surface water, historically they have more or less been institutionalized at publicly subsidized rates. In recent times, some water previously used for agriculture has been purchased by other users and market transfers have taken place. However, the number of time series observations and the data base for these transfers is so sparse that statistical estimation of water demand functions, with their implied impact on commodity supplies and prices, is currently impossible. Accordingly, we made a normative analysis of demand for groundwater and surface water. While fully aware of the water rights, legal restraints and institutional arrangements which prevent sale, interfarm and interbasin movement of water, and market reflection of the marginal value productivity of water, we made some normative estimates of water demand under the premise that some knowledge is better than none.^[15]

In this programming study made up of 105 producing regions, we defined supplies of groundwater and surface water in each. We then set prices (costs for groundwater) at four levels for each. The initial price was the 1975 price; we then doubled, tripled, and quadrupled that, to give 16 price combinations of each, as illustrated in Table 11.2, where G1S1 is the initial level, G3 is groundwater price tripled, S3 is surface water tripled, and G4S4 represents both prices quadrupled.^[16] The programmed water demand responses show, as normative estimates, the price of water associated with each quantity used and, in a sense, also are proxy representations of the price of water which might exist at different levels of water availabilities-under the usual claim of the limitations which prevail under such models. (As mentioned before, we are entirely aware of the limitations of such models and the particular assumptions underlying them.)

Reduction in water use at the highest prices of water are only about half that at the lowest price of water in Table 11.3. These sizable reductions in water bring only modest increases in programmed commodity supply prices. In effect, these are changes in commodity prices reflecting reduced quantities of water used for irrigation (induced by higher water prices, but should parallel reductions in water use made through other means). The resulting commodity price increases in Table 11.3 are smaller than those resulting from a smaller (and somewhat similar pattern of) reduction for the NWA assessment which (a) assumes a higher level of exports, and (b) limits the amount of land which can be

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converted to crops. Similarly, the commodity price increases are less than those indicated in Table 11.1 for the RCA analysis, where added water use also is necessary^[17] for the maximum level of production and exports, because the RCA estimates also assume (a) much higher levels of exports, and (b) all available land is cropped. For the results in Table 11.3, the land base for the lowest price set is only 380 million acres. Hence, as less water is used, varying amounts of the 127 million potential crop acres indicated in the SCS inventory are able to substitute for reduced water use at a higher price. From this analysis, it would appear that over a considerable range (perhaps somewhat less than suggested in the above quantities) of reductions in water use could take place without causing large increases in commodity supply prices if (a) the level of exports is modest, (b) only a trend level of technology is supposed, and (c) a considerable amount of arable land is still available. However, the several sets of data suggest that with a high level of exports and complete use of the nation's potential cropland base, as might happen sometime in the future, declining water availability (due to diversion of water to other uses, higher energy prices, and depletion of groundwater) could cause considerable increases in commodity supply prices.

With sufficiently high energy prices, extended depletion of groundwater stocks, and diversion of water to other sectors from agriculture, water prices could be considerably higher than those used in Table 11.2. For the low price combination in Table 11.2, the average national prices are respectively only $9.80 and $7.83 for groundwater and surface water.^[18] For the highest combinations, these prices are quadrupled. But the possibility of much higher water prices is suggested by Ayer and Hoyt^[19] and by situations such as that quoted below:

"Ten years ago Colorado-Big Thompson water rights were selling for $240 an acre-foot and I thought that was really high," said Earl Phipps, director of the Northern Colorado Water Conservancy District. "Three years ago when the water rights were up to $850 per acre-foot, if you had told me the price would hit $2,000 by 1979, I'd have said you were crazy. That's where it is today. I still can't believe it! . . . Six weeks later the price had gone to $2,250. In 1947 it was $1.50."^[20]

Water prices considerably higher than those used in Table 11.2 could cause a drastic decline in water use and thus larger increases in commodity supply prices. Each further decrement in

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water use would have an increasing impact on agricultural production and commodity prices. It is possible that the "long run" aggregate commodity supply function potential in agriculture parallels is of this nature: over some range, it may remain highly elastic as opportunities remain to convert more land to crops and to further adjust the allocation and technology of water use. But eventually, with complete use of all potential cropland which can be converted at reasonable costs, higher prices and smaller supplies of water and exhaustion of reallocation possibilities for water, the supply elasticity may decline greatly with a sharp upturn in the commodity supply function. A good many persons suggest that we have already "turned the corner." My own estimate is that, for the reasons mentioned earlier, we will "turn the corner" into an era of rising real prices for food sometime in the next 20 years.

Changes in Institutional and Technical Possibilities

From the standpoint of irrigation water, possibilities of remaining on the flatter portion of the curve for some time rests on schemes which might remove institutional restraints in water allocation, application of improved water saving technologies, and improved distribution systems. Technological possibilities are numerous, including improved water delivery systems, water saving techniques such as laser or dead leveling of fields, trickle irrigation, greater pump efficiency, water scheduling, and others. There is even considerable evidence that farmers use water beyond profit maximizing levels, or even beyond yield maximizing levels, due to low administered prices of water.^[21] Since water response functions indicate diminishing marginal yields, use of given water on larger land areas also could help maintain commodity supplies under lowered water availability. Many of these technological changes would likely be induced under much smaller supplies of, and higher prices for, irrigation water. These conditions might also help cause removal of institutional restraints which stand in the way of the most productive use of water. If so, they would dampen the impact of reduced water supplies for agriculture on commodity prices.

The importance of other variables and conditions (export demand and related production in importing countries, land used in the U.S., domestic technology trends, energy prices, etc.)

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besides declining water supplies, also is emphasized in another study using the Ogallala Aquifer area in an interregional and national programming model.^[22] This study indicated that rising energy prices are likely to be as important as groundwater mining and greater pumping depth in increasing water costs by the year 2000. With exports at higher levels in 2000 (corn at 5,424 million bushels, wheat at 3,213 million bushels, soybeans at 1,890 million bushels, and cotton at 4,743 thousand bales), an increase in energy prices from moderate to high levels would raise corn supply price from $2.45 to $3.31, wheat from $4.55 to $6.24, soybeans from $5.63 to $7.42, and cotton from $207 to $267 (1979 dollars). The increased supply prices result not only from higher costs of water due to both greater prices and greater pumping depths, and thus the use of less water, but also from the high level of demand, expansion of crop acreage to less productive land, and some reduced use of fertilizer.

Mainly, I have been discussing major basic feed, cereal, and fiber crops as their production and prices are reflected in the quantitative analysis. They, along with pork, beef, and dairy products, are treated as endogenous to the models. Other irrigated crops and poultry are included, but on an exogenous basis, supposing that they will be produced in the projected amounts (based on consumption trends and per capita incomes and food competition). Of the 60.7 million irrigated acres (including pasture) in 1977 estimated by the NRI,^[23] 55.7 million acres were in cropland, 5.0 million acres were in pasture, and 50.2 million acres were in the 17 western states. The large acreage of cropland not vegetables, fruits or nuts, and the 5 million acres of irrigated pasture are included in the above models. (Because of the use of irrigated land for high value crops in the West, about 25 percent of the value of crops grown in the United States is attributable to irrigation. About 13 percent of U.S. cropland and 11 percent of land, including pasture, is irrigated.) The high value crops (fruits, vegetables, nuts) are a small portion of irrigated acreage and total cropland acreage in the United States. They are, however, a large proportion of specialized crop acreage, particularly in the West. In general, their high value would give them comparative advantage over other crops in the claim to water. However, their prices would be especially affected by increased water prices stemming from reduced water supplies. Whereas dryland production would dilute the price effect of smaller water supplies for grains, cotton, hay, and pasture, it would not do so as greatly for specialized high-value vegetable crops grown in multiple-

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cropping systems. Thus, we would expect the price effects to be relatively larger under reduced water supplies than those discussed above for conventional field crops.

Elasticity Impacts

Another potential means of evaluating the impact on commodity prices of reduced irrigation water would be to estimate reduction in food production due to restrained water supplies and relate it to price elasticities of demand for each commodity involved. To do so, we would need to know the reduction in water drawn away from each crop, estimate its decline in production (for otherwise "normal" conditions), and effectively apply its price elasticity of demand to the change. Aside from programming models which can normatively estimate such reallocations relative to a stated objective function, there is no ready quantitative or statistical means to predict the pattern of these reallocations at a future time when higher energy prices and increased pumping depths reduce groundwater supplies while competing sectors reduce surface supplies. Hence, there may be little reason, in a predictive sense, to spend any great time on expected price changes for individual commodities.

Most of the price elasticities of demand estimated for food in aggregate in the United States over the last 40 years range from –.20 to –.33, with –.25 being somewhat the "central tendency."^[24] Hence, we might expect that each 1 percent reduction in domestic food supply resulting from reduced water supplies would increase food price by about 4 percent-other things remaining equal, on both the supply and demand sides.^[25] This would be the more expected level of price change if grain export markets paralleled those of the 1950s and 1960s. At that time, supply controls were in effect. U.S. exports were modest, and the overwhelming outlet for major export crops was the domestic market, with exports moving particularly under public assistance. However, since export markets have grown greatly over the past decade, foreign (world) demand elasticities for U.S. exports now may be most relevant in gauging the effect of reduced U.S. water supplies on commodity prices. Estimates of these elasticities are available for only a few major export commodities, cover a wide range of numerical values, and are greatly tempered by the supply elasticities of the importing countries.^[26] They are expected to be larger than domestic elasticities, and, as

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an average, are probably about –1.33 for grains which are the major U.S. export commodities. In these terms, a 1 percent reduction in output due to a reduction in water supplies to produce grain would increase price by about .75 percent.

Distribution and Equity Aspects

Reduced supplies and higher prices for water would likely bring about increases in the marginal productivity of water, thus dampening somewhat the impact of reduced supplies on commodity prices. A complex of water rights and institutional restraints now stands in the way of prices in allocating water more nearly in line with its marginal productivity. These rights and institutional arrangements have value to the users; to abolish them would force a capital loss on farmers to whom they attach. Hence, compensation to these farmers through better access to markets for their water, or by other means, is necessary if improved allocations of water are to be realized. These means may not be created soon, even though they would lessen the impact of reduced water supplies on food prices. However, with the proportion of farmers in the population tending towards zero, a means may be more readily created if the real price of food advances rapidly.

Discussion:
Kenneth R. Farrell

In his inimitable style, Heady has dealt competently and comprehensively with a very complex subject. As he correctly points out, there can be no unequivocal empirical determination of commodity price impacts from a decline in western irrigated agriculture. The region is but a part of a large system of national and international markets for agricultural commodities-markets in which numerous economic, technological, and institutional variables interact in complex, dynamic ways in the course of highly uncertain future events. Nevertheless, Heady has given us some possible "boundary" outcomes to reflect upon in our speculations and planning for the future.

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For purposes of discussion although at the risk of oversimplifying Heady's conclusions, I have chosen to highlight three of his principal points.

(1) The future supply of water for irrigation in the western states will decline. I concur with this, but think it important to amplify in three respects. The first is to note that Heady is referring to the economic supply of water, i.e., for any given quantity of water, the price (unit cost) to agriculture will increase, for reasons he has cited (increased costs of pumping groundwater and increased competition from other areas). This is quite different from saying that agriculture will confront absolute physical constraints on water supply. Second, we should note that the economic supply of water now differs substantially among areas within the region, and that such differentials could well widen in the decades ahead, depending upon the rate of mining of underground supplies, the costs of energy, and the market or institutional arrangements by which water is allocated among competing uses. As Frederick has pointed out in a recent report, the locus of growth in irrigated agriculture in the West during the past 25 years has moved from south to north, and will so remain in the decades ahead.^[1] Finally, we should note that while competition for surface water will inevitably heighten, to the economic disadvantage of agriculture, the political-administrative institutions governing the allocation of that water are slow to change. Notwithstanding the imperatives of economics, agriculture may continue to muster sufficient political strength to defer major reallocation of supplies or major modifications in water prices for some time to come.

(2) ". . . the impact on commodity prices of reduced water supplies to agriculture will depend on the availability of water-substituting inputs and technologies." Such substitution includes the possibility of dryland farming of land now in irrigation, land now in other uses, and the adoption of current or new water-conserving management practices and technologies. As Heady notes, one of the public challenges we confront in the context of rising real costs of resources is that of inducing R and D programs which relate technologies to prospective resource prices.

With respect to the substitution of land for water, options differ widely within the West. In states such as California, the option is extremely limited. In the Great Plains states, the technical possibilities of shifting to dryland cropping are greater; but the economic costs of farm operators would be substantial. A recent study of the six-state Ogallala aquifer region concluded

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that, under conditions of crop prices and yield relationships of 1975-80 and with currently projected rates of groundwater depletion, a transition to dryland farming over the next 40 years would reduce gross farm income in the region by 25 to 50 percent.^[2] With respect to bringing land into crop production from other uses, the greatest possibilities would seem to be outside the region in the Southeast and in the upper Midwest.

Heady observes that there is a lack of knowledge of irrigation technologies and institutional changes which might be induced to improve and make more productive the use of water. It is frequently observed that application of water in agriculture is excessive from a technical or physiological point of view. What are the potential physical savings on water use given current technology? With new or improved technologies? What are the economically feasible savings of water under alternative technical and water-commodity price relationships? Such questions would be appropriate subjects for interdisciplinary research involving agronomists, irrigation scientists, and economists.

(3) The general conclusion which Heady appears to draw from the results of his several models is that water reductions could take place over a considerable range, without causing large increases in commodity supply prices, if the level of exports is modest, the trend level of technology is maintained, and the 127 million acres of cultivable land inventoried by SCS are available for conversion to cropland. Heady goes on to say, however, that at some point the commodity supply function could become quite inelastic, and that a combination of high exports and declining water availability could result in considerable increases in commodity supply prices. This conclusion is in accord with those of Crosson, and Crosson and Brubaker in their recently published reports.^[3] Heady's analysis illustrates clearly the sensitivity of American agriculture to export demand and in turn the economic "leverage" which exports could exert upon the price of commodities and use of resources in the United States. As he points out, there is great uncertainty concerning the future strength of that demand.

In conclusion, I would like to comment briefly on one of the premises of Heady's paper, indeed a premise of this entire volume-the need for additional information and research to narrow the bands of uncertainty concerning the basic issue, "Impacts of Limited Water for Agriculture in the Semiarid West." I have suggested a need for interdisciplinary research to better estimate the potential savings of water under alternative economic and technological scenarios. In addition, we need better,

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more complete estimates of the economic and social value of water in its alternative uses in the principal watersheds of the region and, within agriculture, better and more complete estimates of the value of water among alternative agricultural uses. Although a substantial body of such information is scattered among research institutions, it is of uneven quality and currency and probably not easily additive. The report to the National Water Commission in 1972 by Young and Gray provides an excellent conceptual framework within which to begin a coordinated regional or national effort to construct such estimates.^[4]

Finally, I would urge my fellow economists to seek more effective research alliances with other disciplines, particularly law, to examine and analyze the institutions which govern the use of water, to document the social costs and benefits, and the respective distributions of each under current, alternative, or modified institutions. As social scientists, we have a responsibility to induce innovation by providing relevant, usable research results. The need is neither new nor revolutionary. It is simply more pressing.

Discussion:
David L. Watt

This excellent chapter provides a long needed perspective on the relationship of agricultural resource problems in the U.S. to world commodity markets. Because many of the land-extensive commodities irrigated in the United States are grain crops, and the grain market is indeed a world market, we are attempting to measure the impacts of one possibility among many unknowns.

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The 1978 Census of Agriculture indicates that less than 11 percent of U.S. cropland is irrigated. The chapter points out appropriate evidence that there is great potential for improvement in the efficiency with which water is being used. Between 1949 and 1978 irrigated land in farms increased from 25 million acres to 50 million acres. This increase has been fostered by technological improvements in irrigation techniques-and by extensive expansion in international trade, particularly in the last 15 years.

Between 1967 and 1981 the annual average productivity growth of U.S. agriculture was 1.66. U.S. agricultural exports have increased at a rate of 6.7 percent per year, while aggregate farm output has increased only at a rate of 1.7 percent. Productivity growth has permitted the increase in output to be accomplished with a negligible increase in the quantity of inputs. However, changing relative prices have created significant change in the mix of the inputs used. For example, labor use declined by 35 percent during that period, while quantity of agricultural chemicals used increased by 74 percent.

If agricultural exports continue to grow at the same rate as during the last 15 years, and if domestic supply, demand, and productivity growth continue at trend levels, the increasing importance of exports as a demand for U.S. agricultural commodities will indeed cause real prices of U.S. commodities to increase, as indicated in the chapter. However, the impact of reduced water to produce grain is a long-term adjustment. With other countries having time to adjust to a changing situation, both in supply and demand, price impacts will be dampened much more than the amount estimated from currently accepted short-term world demand elasticities.

The availability of additional land and yield potentials for crops is handled well. The only conclusion is that sufficient land and yield technology is available to meet significant growth in demand. The question is simply, "What price will be required to fill future demand?" Expansion in demand will have its greatest impact on the quantity of irrigation.

It would be useful if we had enough knowledge about the future to justify statistical and econometric studies with reasonable prediction errors. It is essential for strategic planning by corporations and for capital investment decisions in the public sector to have an estimated future economic environment, including prices, on which to base decisions. Public Law 49-587, October 22, 1976, commissioned a study to determine the cost and

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benefits of reasonable options to ensure an adequate supply of food to the nation and promote the economic vitality of the High Plains region.^[1] In this study, commodity supply price estimates over the life of any policies which would be implemented were required to determine the benefits of alternative policy options. Also, the economic vitality of the High Plains region would be greatly affected by commodity supply prices. A baseline scenario was developed under the assumption that no explicit Congressional actions would be undertaken with respect to the declining water situation in the Ogallala.

For the baseline scenario, the productivity of the agricultural sector was assumed to grow at a 1.5 percent per year rate for the near term, and decline to 1.0 percent by the year 2020. Prices paid by farmers for production inputs were assumed to increase slightly faster than the price of all goods and services in the U.S. The projections for U.S. population and income growth, combined with the assumptions of growth in international demand, resulted in demand increasing by 1.75 percent per year in the near term and declining to 1.25 percent by the year 2020. These assumptions result in aggregate farm output measured as an index (1967 equals 100) rising to 210 by the year 2020. Prices received by farmers in this scenario experience a real growth rate of approximately .25 percent per year from the 1967 base. For this scenario, the total cropland harvested makes a gradual increase up to 388.5 million acres by the year 2000 and continues up to 435.1 million acres by the year 2020. Of the cropland harvested, 53 million acres are projected to be irrigated by the year 2000 and 61 million acres by the year 2020. These results imply that significant growth in agricultural production can be achieved without a large increase in irrigated acreage and only a slight increase in real prices received by farmers.

In the High Plains study, several management strategies were studied to determine their impacts.^[2] Of significant interest in looking at reductions in water use was management strategy 2, which looked at policies designed to force reduction in the amount of water pumped for irrigation. Researchers from the six states involved developed estimates of changes in production in each of their respective states from the baseline. The change in High Plains production was divided by the baseline U.S. production to reflect the percentage change in production caused by the new policy. The study showed that there are many factors which offset the reduction in available water for irrigation. Most descriptive and typical is the impact upon corn production. In

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management strategy 2 the percentage reduction in national production (with prices and other factors fixed) was 1 percent for 1990 and approximately 1.5 percent for both 2000 and 2020. When inserted into an aggregate model for the U.S. agricultural sector, the production impacts were partially offset by increased price effects and production increases in other parts of the U.S. The 1990 equilibrium production was reduced by only .5 percent, production by the 2000 was reduced by almost 1 percent, and production in 2020 was reduced by 1.25 percent. The price increase over baseline in this scenario was .75 percent in 1990, 1.8 percent for the year 2000, and only 1 percent by 2020. Thus, the net elasticity of change increases with the length this particular scenario is in effect. Net price elasticity is .66 in 1990 and rises to 1.20 by 2020.

Indeed, the distributional aspects are the most serious problems associated with reduced irrigation water in the West. The significance of this is highlighted when we recognize that reduced production of agricultural commodities in the West will result in higher net farm income for the agricultural sector at the national level. The most redeeming feature of the current problem is that increased attention is being directed toward determining more efficient ways of using water. We are also seeing significant improvements in the economic use of water in agriculture.

Chapter 12:Impacts Upon Business Communities

Chapter 12-
Impacts upon Business Communities

by Vernon M. Crowder

Abstract

This chapter is an examination of the probable impacts of limited water supplies on agribusiness, banking, and the resulting effects on the economy. Since I am an agricultural industry analyst for a major commercial lender in California, the primary focus of my discussion will be California. It is reasonable to make an induction from California to the western region, because the situation in our state reflects that of the West.

This analysis begins with a discussion of the major assumptions of water use, availability, and development, particularly in relation to California agriculture. Assumptions about water are a topic of debate; nonetheless, there is a consensus among the experts in the agricultural industry.

An Examination of Assumptions

Assumption 1

World demand for food has been rising and is expected to continue increasing. The world population is not only continuing to grow, but income per capita has also risen. Increases in world income should boost the demand for many of the "luxury" crops grown in California, such as fruits and nuts. In contrast, many developing countries are making attempts to increase their production of staples such as grains. Since real world income is projected to increase nearly twice as fast as estimated population, there will be an increase in future world per capita income, and, therefore, a probable increased demand for California agricultural goods. (These estimates were supplied by the Wharton econometric model.)

Assumption 2

Energy prices will continue to rise. Costs will increase because energy resources are becoming scarce and more expensive to develop. The cost increases are not likely to be as high as the last decade, however. The cost of energy is a direct input in the cost of water. Energy to claim water is necessary, whether it is pumped from basins or transported across territory to an area of need. Even if water is developed and used in the same area, energy will play a major role since irrigation is energy-intensive.

Assumption 3

The capital cost of developing water supplies has risen sharply and will continue to increase. Reservoir and other water facilities were less expensive decades ago when compared to many of the projects on the drawing board today. The increase in project cost can be attributed to the effects of inflation on inputs-labor and materials-and the sophistication in engineering that is required for remaining sites. In addition, safety and environmental concerns have also contributed to higher capital costs. For example, the proposed facility at Auburn or the enlargement of the Shasta reservoir may result in water that costs more than $300 an acre-foot. In comparison, some projects built prior to the Central Valley Project cost only a few dollars an acre-foot.

Assumption 4

Conservation will be very difficult for agriculture. Contrary to popular belief, agricultural water consumption is already relatively efficient. Most water is reused until it is lost to transpiration, evaporation, or runoff. Very little is lost to evaporation or plant transpiration; most is lost to runoff where it ends in the ocean to begin the hydrological cycle anew.

Regardless of the type of irrigation, what one grower does not use is typically used by a neighboring grower. Many growers are using more efficient types of irrigation systems, such as drip or sprinkler, for the purpose of reducing energy and labor costs. This reduced consumption of water, and the resulting decreases in runoff, mean that the next water user "down river" must obtain other water. Therefore, an increase in efficiency in a particular grower's irrigation system has negligible impacts on the overall use of water by agriculture. Essentially, there is little hope for solving future water shortages by conservation without taking land out of production.

Assumption 5

The transfer of water rights will be very difficult because of institutional and political barriers. In addition to the legal prohibitions to transfer, there is the highly emotional reaction by those not getting the use of water as the result of a transfer. To illustrate, Los Angeles' Department of Water and Power thought that its water rights were very secure in the Owens Valley, since they had purchased vast amounts of land in the area. However, recent court actions have made these water rights dubious. In another case the emotional nature of the water-market issue was evident when the voters of Yuba County turned down a measure to allow Kern County water users to pay for the expansion of a local water reservoir. In the proposed measure, Kern County would have paid for the right to use the water while it was in surplus, leaving it for local use in times of need. In spite of the potential benefit to Yuba County, the voters rejected the plan as a "raid" on their water rights. Since the right of appropriation in California deems that water should go to beneficial use, there will always be controversy, because the evaluation of "beneficial" can vary by individual opinion.

Assumption 6

Urban water use will continue to increase, resulting in more competition for scarce water supplies. Theorists point out that urban water consumption will decline per capita because of more dense housing. However, it is unlikely that such reduction in per capita water consumption will offset increases in populations. According to the National Planning Association, California's population is projected to increase 15 percent by the year 2000. Compounding the problem is the loss of water entitlements to Arizona. As a result of the 1964 federal court ruling, the Metropolitan Water District, which is the primary water distributor to Southern California, will lose more than half of its water entitlements once the Central Arizona Project is completed in 1985.

Assumption 7

Political in-fighting between different interest groups is blocking the way to additional water development. In addition to the friction between environmentalists, farmers, and urban dwellers, there are divisions within each group as well. The recent battle over the California Peripheral Canal referendum is a good example. Agriculture, which normally votes as a bloc, split over the

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proposition, and large agricultural interests were allied with their traditional rivals, the environmentalists. Such coalitions do not last, however, as was demonstrated on the subsequent Water Resources initiative. The polarization of interests has prevented any progress in the development of additional water supplies. I fear that such battling will continue until the situation worsens sufficiently to demand a resolution.

Evidence demonstrates that the demand for water is continuing to increase, and that development of additional supplies is doubtful. Since conservation alone cannot offset consumption enough to avoid reduced agricultural production, current facilities will be less than adequate.

An Analysis of Impacts

The major impact of limited water supplies will be a reduction in agricultural production. Any decrease in production for the long term will mean a lessening of overall economic activity.

To illustrate the importance of agriculture to the overall state economy, the California Crop and Livestock Reporting Service estimates that three additional dollars are generated in the state's economy for every dollar of farm receipts. This means that agriculture accounted for $55.6 billion in California during 1981. For the same year, Security Pacific Bank reports a state gross product of $355.2 billion.

Change in crop selection as a result of higher water prices is a commonly cited impact of water scarcity. However, the primary determinants of crop selection are market prices and the availability of alternative crops. In many instances, the availability of water is more important than price. While sufficiently strong market prices can possibly offset higher water costs, uncertain availability makes it less feasible to plant crops that depend upon regular irrigation, or crops that cannot tolerate any long periods of drought. The quality of water, the amount of dissolved solids (salt), is also influencing the selection of crops.

The amount of capital invested in land is also an important factor in crop selection. As the value of land increases and more capital investment is necessitated, operators seek higher returns per acre. The predominant means of obtaining higher returns is to make additional improvements to the land by planting permanent crops such as trees or vines. Ironically, such intensive farming usually means a greater use of water resources. While

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alfalfa is usually cited as an inefficient use of water resources in comparison to cotton, orchards and vineyards use much more water per acre annually. But the higher returns associated with the permanent crops justify the greater production costs, including the increased water use.

To illustrate, Table 12.1 indicates what portion of production costs in the San Joaquin Valley is for irrigation. The two different percentages are for areas of low- versus high-priced water. As other production costs increase, the costs of irrigating become less significant.

The immediate impact of rising water prices or decreasing availability is on land values. Real estate that is entitled to less expensive and/or more available supplies commands a higher price on the market than farmland without available water supplies or supplied only by very expensive water resources. To illustrate, the following examples come from Kern County, at the southern end of the San Joaquin Valley. Open land in the western portion of the county served by the Berenda Mesa Irrigation District sold for between $2,200 and $2,400 per acre this

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year. Only expensive State Water Project (SWP) water is available in this area, and there is no groundwater available. Where groundwater is available, as in Kern County's Simi-Tropic Irrigation District, similar land sold for about $3,700 this year. In the northern portion of the county served by the North Kern Water District, the area is supplied by both the SWP and the relatively inexpensive Central Valley Project, and groundwater is also available. Comparable land there sold for $4,800 this year.

Conclusions

This chapter assumes that energy prices will rise, capital costs for water development will continue to increase, urban water demand will grow, and world demand for food and fiber grown in California will be greater in the future. Additionally, assumptions are that new conservation, greater transfers of water rights, and more water development will be very difficult. Ultimately, this means less water will be available in the future.

Water costs will rise and because of less water availability, agriculture will have to reduce production. This will have a damaging effect on the overall economy. Naturally, agribusiness, banking, and other sectors will feel the effects.

With regard to the remaining agricultural production, higher water costs and less water availability will have great impact on the value of land. There will be significant changes in land values corresponding to its associated water costs. Higher land values will encourage more intense agriculture that eventually challenges water resources to even greater extents. The situation in San Diego, where both water costs and land values are very high, provides an example; agriculture will continue despite water scarcity. Agriculture under water constraints will be very different, though, since more intensive planting will call for more efficient irrigation techniques.

The picture seems bleak. Additional water development would help to alleviate many of the detrimental impacts cited here. Such development cannot come about, however, unless special interest groups find mutually agreeable solutions to our water issues. The in-fighting among agricultural interests will have to be resolved to facilitate agreements.

Discussion:
Dorsey R. Meyer, Sr.

Two primary considerations apply to the general topic of water as it concerns agriculture in the western states. First is the political process, which makes any future water plans difficult. In California the Peripheral Canal issue and the Water Conservation initiative of 1982 are both clear illustrations of this political problem.

Second, too little thought is given to the idea that agricultural production is essential to the welfare of man. A balance must be created between domestic, industrial, and agricultural needs. Vital crop production occurs very often in arid areas dependent upon irrigation water originating in watersheds not always adjacent to productive lands. Yet agriculture competes with the constant demand for water by metropolitan, domestic, and industrial users.

Crowder covers the economic effects of water shortages on the overall California and western agricultural economy. Our history shows that we have maintained low farm prices in order to control consumer food prices. This is unfortunate, as the return on investment to the American farmer here in the West often is inadequate, and limits his ability to seek solutions to the problems of water.

The chapter states that less water will be available for agricultural production. Yet the same amount of water exists on this planet that existed before domestic agriculture was initiated. We process it, change it, drink it, use it, but it nevertheless remains. The question is one of distribution and utilization of this reusable resource, in contrast to hydro-carbon fuels which are a finite resource. Domestic, industrial, and agricultural users must be stewards of water. The distribution of available resources needs adequate long range planning, taking all three categories of users into consideration.

The increased recycling of wastewater, both for industrial and agricultural use, also provides a partial solution to water shortages. Tail waters which carry impurities and high salinity will be utilized in future more than at present. Research indicates that it is possible to raise two bales of cotton per acre on land with higher salt water content, as high as 6,000 parts per million, compared to the normal 500 parts per million contained in water from the California Aqueduct. This possibility is offset somewhat by salt buildup in soil, but nevertheless the benefits of recycling remain.

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The redistribution of water in subcanals and thence into furrows, overhead devices, etc., to produce crops in the semiarid West requires a great deal of energy. Since energy prices are expected to increase, energy needs to obtain water for agriculture will become even more acute in the near future. Political decision makers must be continually informed and properly persuaded that agriculture has limitations as to what it can afford to pay for surface or underground irrigation water. The domestic and industrial water user must bear an even larger share of the cost of distributing water in the West from one point to another, and relieve some of the burden from agriculture. Economic production of farm crops must be maintained to keep consumer food prices reasonable.

Costs of water development are escalating daily. Because of the slow process necessary for approval and eventual construction of facilities for moving water, costly projects are inevitable. Here again, consumers, industry, and agriculture must take a commensurate share of the burden. In publications such as the California-Arizona Farm Press, we see methods being undertaken by various growers, educators, and extension services to improve and make more efficient agricultural use of the available water supply. Some of the more exciting developments are the use of computers, drip irrigation, and modified overhead irrigation using the drip principle. It is interesting to note that much of this technology is coming from Israel, where necessity has been the mother of invention in respect to agricultural use of water.

More effective use of water by agriculturalists is progressing in many areas. Improvement in pumps, drip irrigation, recycling of wastewater, and the development of agricultural crops which have higher salt tolerance, will add to more control of water by farm growers.

A total water program needs to be created for the semiarid West. With a sufficient amount of water, hundreds of thousands of acres can yet be brought into production in climatic areas most favorable to high production of both food and fiber. The problem, obviously, is to transfer water from where it is created to the place where it can be utilized. Arizona represents a strong potential area, in my view, for the additional development of agricultural acreage, but the metropolitan areas will probably use up the water available and prevent further significant agricultural development in the Arizona desert. A new master water plan which incorporates all of the western states is badly needed.

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If no new water is developed in the next decade, it will be a tragedy resulting in exaggerated costs in future.

Tax legislation is also badly needed in regard to our land resource in the western states. In the near future, governmental control of all underground water will probably occur, as in Arizona, with the resulting higher cost of water for growers. Land with available water will be expensive, and land without water will not be fully utilized. Because of economic pressures on growers, the development of various machines and new approaches to more efficient crop production and reduced operating costs are processes of dire necessity, rather than desire.

Though some say that the western states may be less competitive in agricultural production with areas that have greater water resources, I do not agree with this view. Many of the western irrigated lands have more favorable climatic conditions, and with proper research and development, recycling and proper use of water, the West can continue to outproduce, per acre, other parts of the nation.

The semiarid West must share in untapped water resources. One of the constant problems, however, is that underground aquifers are continually being reduced without proper replenishment. In the EPA Journal of March 1980, Eckhardt C. Beck, Administrator for Water and Waste Management, stated: "Some of the underground aquifers in Arizona, for example, drop ten feet per year, and are replenished at the rate of about a quarter of an inch per year."^[1] This clearly illustrates that mining of underground water is only a temporary cheap supply at best.

I have great confidence in the ingenuity of our western farmer and agribusiness community to solve problems, including water supplies. Farms in the West will become larger, as far as commercial production is concerned. The very small part-time farm will also advance, but these farms do not produce a high percentage of our essential food production.

All of us in agribusiness serving agriculture today are aware of the problems facing agriculture, including water resources. A purposeful depression of farm profits is an ancient strategy to hold down basic food costs, but is in my opinion self-defeating in the long run. It is far better to permit growers to make adequate returns on their investment and thus be able to spend adequate amounts to solve their own problems.

The almost $14 billion produced as revenue for California farm products in 1981 represents 10 percent of the nation's gross farm receipts, derived from only 3 percent of the country's farm

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acreage. Western agriculture is a force to be reckoned with. If growers can derive a profit from their hard efforts, they can produce, to the amazement of the entire world, food and fiber needed not only by this country, but much of the world at large.

Chapter 13:Social Impacts on Rural Communities

Chapter 13-
Social Impacts on Rural Communities

by Albert Schaffer and Ruth C. Schaffer

Abstract

The adoption of dryland farming as the availability of water declines creates serious difficulties for local institutions and disturbs the community's relationships with its residents and the larger society. This chapter examines those local institutions-banks, services, and leadership-which respond to the spread of dryland farming in ways which increase pressures on residents to relocate elsewhere. The dwindling supply of credit and the closing of local businesses signify a reallocation of wealth from the rural to larger, more prosperous communities. Migration of farmers, business, and professional people weakens leadership and undermines the community's adaptive capacity at a time when problems become more serious.

This chapter also explores various adaptive measures available to rural communities. These include efforts to diversify the local economy, strengthen local organizations, and establish intercommunity and regional coalitions to gain assistance from the federal level in addressing the area's water problems. The outcome of these efforts over the next few decades may be indicative of how America will cope with a diminished resource base, either through reduction in scale of organization or improvements in the environment's carrying capacity.

The advance of industrialism has been marked by an enormous increase in productive capacity and in man's capacity to rearrange the natural environment. Sprawling cities have developed in strategic locations, linked by multi-modal transportation systems. Natural resources in huge quantities are removed daily from the earth. Changes in farming have been no less remarkable, as evident in the increasing use of machinery, in size of farms, and in declining farm population.^[1] Today only three out of a hundred workers are engaged in farming compared to almost four out of ten workers in 1900.

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One threat to agriculture, besides overproduction and falling income, is the depletion of water in the arid and semiarid West and in those areas of the High Plains dependent on the Ogallala Aquifer. Many areas of irrigated agriculture will shift to dryland farming in the next few decades, a change presently occurring in the southernmost area of the High Plains. The reduction in crop yields and farm income will have serious consequences for farm communities and their residents, changes which will spread to areas undergoing this agricultural transition. This chapter considers several dimensions of the process of community decline: first, the local structures which play a strategic role in the adaptive process; second, the social-psychological consequences of change, especially for those who sell their farms; and third, measures whereby stability may be achieved at an economic and population level higher than otherwise might be possible.

The community, especially that based on family farms, plays a vital role in the operation of American society by linking residents to basic values and social institutions.^[2] Residents participate in the larger society mainly through involvement in local institutions. The community can facilitate integration since it is part of and contributes to national patterns of interdependence. The market economy involves all regions and localities in a nationwide and global system of exchange and resource allocation.^[3] The community participates in this system mainly through export activities which, in the case of rural localities, consist of various farm products that provide capital for local producers by meeting needs of organizations throughout society. These features of the economy may have a large influence on the material well-being and status of local residents. Where the majority can achieve important goals through participation in the farm sustenance system, allegiance to core beliefs and values is likely to be strong.^[4] The legitimacy of the authority structure which sustains the capitalist economy, and such features as private property and the sanctity of contractual relationships, will be widely accepted.

Productive labor in the local economy which is well rewarded has important psychological consequences, due in part to the value system. Success is largely defined in materialistic terms, to be achieved through disciplined personal effort.^[5] Those who attain these ends usually enjoy respectable class and status positions, and receive the plaudits of colleagues, friends, and loved ones. These significant others become the foundation of the actor's esteem and self-confidence.

Arid Lands and the High Plains

Adapting the community to water scarcity is not unique to the United States. One-third of the earth's land area is considered arid,^[6] an environment characterized by ten to fifteen inches of annual rainfall, and the frequent occurrence of drought, erosion, and famine.^[7] Seventeen western states in America experience varying degrees of aridity, in contrast to the more humid eastern states. The difference in rainfall and ecosystem has been so considerable that development would have been less traumatic and destructive had settlement taken place from the West.^[8] Water transfer projects and use of groundwater have made possible extensive urban and agricultural development similar to that in the more humid eastern states. The growth of cities, industry, agriculture, and population has decreased the supply of water while rising energy prices increased pumping costs. Apart from the six states in the High Plains, sections of Arkansas, Arizona, California, Florida, and Idaho also depend on groundwater.^[9]

In the future,

. . . . Areas showing rapid rates of decline and high pumping lifts will likely be the next regions to lose irrigated acreage. Higher energy prices, rather than dwindling water supplies, will likely trigger the decline. Energy price rises have affected population costs more than declining groundwater levels. States containing significant areas of high pumping lifts (more than 200 feet) and rapid rates of decline (more than 3 feet) include parts of Arizona, California, Idaho, Kansas, Texas and the Oklahoma Panhandle.^[10]

Although irrigated agriculture in the High Plains has been possible only in the area overlying the Ogallala Aquifer, roughly 10 percent of the acreage in the six states, the gain in farm productivity has been remarkable. The area produces, for example, approximately 40 percent of the nation's sorghum, 25 percent of its cotton, and 17 percent of its wheat.^[11] Any major decline in water table combined with increased energy costs will have a sizable impact on both regional and national farm production. The impact is likely to be more severe in the southern tier of High Plains states-Texas, New Mexico, Oklahoma-where annual water use may decline by 53 percent by the year 2020 due to aquifer depletion, while annual water use will increase 33 percent in the northern states, Kansas, Colorado, and Nebraska.^[12]

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However, severe drought and rising energy prices may accelerate the shift to dryland farming throughout the six-state Ogallala area.

Roughly two and a quarter million people inhabited the Ogallala area of the High Plains in 1980, slightly less than 9 percent of the total population in the six states.^[13] While several of the High Plains states have large metropolitan centers boasting spectacular growth, e.g., Denver and Dallas, the Ogallala area itself reflects the characteristics of small town America. Of the approximately 166 cities in the United States with over 100,000 population, only three are located in the Ogallala area; all are between 100,000 and 300,000. Three states, Texas, Kansas, and Nebraska, have a total of twelve small cities with populations ranging from 10,000 to 100,000. The approximately 812 other communities found principally in Nebraska, Kansas, and Texas are below 10,000 population. Many of these communities will be adversely affected by the adoption of dryland farming as location and water scarcity reduce the likelihood of providing nonfarm employment by attracting industrial and commercial enterprises. Population and economic decline will be unavoidable in many of these communities.

The Process of Community Decline

Rural community decline is initiated by a weakening of the economic base which triggers an interactive cycle that spreads throughout the locality and extends its influence into nearby towns and cities. Weakness in farming spreads to other economic organizations and to various local institutions, which leads to population losses. The decline in these several sectors are mutually reinforcing, magnifying the impact otherwise occurring separately, and encouraging the continuation of the cycle of decline. A process of reallocating wealth, resources, and people is underway, from the declining areas to those rural centers elsewhere in the nation with the potential for expansion, and to urban communities. The deterioration in local conditions upon which various organizations depend, and the social-psychological perception of the situation as one of diminishing opportunities unlikely to be reversed, underlie the disinvestment process.

Banks in small towns and cities quickly feel the impact of declining farm income since many borrowers have difficulty repaying loans. A phenomenon similar to "red-lining" in urban

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neighborhoods may occur in rural areas if bankers consider farm loans too risky or incapable of earning an adequate return. Any major reduction in the availability of credit would cause some of the less efficient or more highly leveraged farms to cease operations. The high cost of capital also increases the pressure even for the most efficient and productive farmers to seek nonagricultural employment.

Decline in farm income and population weakens the market for local and small city businesses and professionals serving the farm areas. Once the numbers of customers and income level fall below a "critical mass"^[14] or threshold, financial rewards are too limited to permit continuation of the enterprise. Services and retail trade needing a large market would be most sensitive to community decline. Terminating operations effectively transfers functions to larger communities,^[15] forcing local residents to do without some important commodity for a period of time and to incur sizable expense from shopping trips to more distant communities. These factors further increase the cost of remaining in the farm community.

Professional services with high thresholds were first to leave declining villages in Wisconsin,^[16] losses which probably had adverse consequences for the health and well-being of local residents. Commercial establishments also felt the effects of reduced income as customers cut back on purchases. Establishments requiring a large trade area, such as dry goods stores and auto dealers, were the first to depart, followed soon thereafter by various personal services, such as beauty parlors and repair shops.^[17] Since the population could no longer support multiple stores in the same line, the number of establishments such as filling stations and grocery stores declined, leading to price increases. The decline in the rural community's resources imposes various costs and deprivations on inhabitants, causing the rural lifestyle to decline below that of most urban residents.

The declining economic base has adverse effects on local schools and government, requiring cutbacks in various services, programs, and personnel. Laying off county clerks and school bus drivers, for example, seriously reduces the income of some farm families. Neglect of farm roads and bridges increases transportation costs, and necessitates more frequent auto repairs. The psychological consequences of decline are manifest in a malaise of defeatism which complicates if not defeats efforts to stabilize local institutions.

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The departure of farm owners, professionals, and businessmen, and the closing of banks, also depletes the ranks of leaders: people with a substantial stake and involvement in the community. This outflow of an indispensable community resource has numerous consequences. The community's resources for exercising power-wealth, information, skills in management, public relations, brokering conflicts, access to key influentials outside the community-also have been diminished. The examination of the diverse roles which usually must be performed to complete a project indicates the seriousness of the losses.^[18] These include, in addition to those mentioned above, initiating and formulating a specific plan and gaining support from decision makers. The exodus of leaders leaves few people capable of performing the tasks essential for success. Projects which depend on such specialized activities as communicating with a key legislator, or brokering disputes between local factions, may be crippled due to lack of external support and internal unity. These difficulties may befall both efforts at community development and the management of local institutions, e.g., schools and churches.

The community also will be weakened by the absence of leaders with vision, a capacity to see beyond the immediate disrepair of the locality and recognize conditions as assets for future development which others ignore or fail to appreciate. These abilities are extremely important for declining communities, as one strategy for halting or reversing decline requires the use of "old resources in wholly new ways, so that they are really new resources."^[19] Some western communities with environmental amenities have been able to shift their economies from extraction to culture, recreation, or both, and become a mecca for art lovers or ski enthusiasts.^[20] Vision, however important, does not suffice to assure success of new ventures. Willingness on the part of leaders to take risks, to invest resources-both money and skill-in enterprises whose outcomes are doubtful and which require a lengthy period of time before results can be determined, is as important as the plan of action. The reversal in the economic well-being of several Wisconsin villages was attributed mainly to leaders who were entrepreneurial in risk taking.^[21] The economic improvements required for halting decline are unlikely to occur in farm communities which have been losing many businessmen and farmers, since those who remain will be concentrated in the older age brackets, and less inclined to take risks required for supporting innovative programs. They are more likely to be fatalistic about the community's future.

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Coalitions may overcome weaknesses in some organizations. A civic, youth, or educational group could improve its program by cooperating with other interested associations to acquire the needed resources. These interorganizational coalitions^[22] enable key members to meet often for resolving differences, formulating plans for development, and allocating resources for a few crucial projects. A communitywide association may be established to present a "united front" in dealings with external agencies.^[23] A community's ability to cope effectively with decline may depend on degree of interorganizational linkages.^[24] Any success which these coalitions achieve that improves local institutions, both economic and social, will upgrade conditions of daily life and demonstrate the capacity of local groups to influence the community's future. As this view gains support, resources for future projects should be more readily available.

Departure from the Farm Community

For those who cannot continue in farming, the move to nonagricultural employment involves numerous changes. These may be minimal in communities whose residents can commute to jobs in the city. For others the change involves disengagement from one locality and economic sector and establishment in different structures. Many will encounter considerable difficulty and some will not make a successful adjustment. Even for those who find new employment and build new lives in the city, the level of satisfaction may be less than had been customary, causing some alienation from society's core values.

An understanding of the factors involved in disengagement from agriculture and participation in the urban economy can be gained from comparing farming with a career in complex organizations. Various aspects of farming resemble a career, although the concept has been mainly applied to professional and administrative roles. A "career" signifies a stable and sequential pattern of employment in a similar line of work providing advancement over a lifetime in skills, earnings, and responsibility.^[25] A career signifies continuity of work experiences since job changes comprise a general pattern of development. A career becomes a central part of the person's life plan, which absorbs considerable energy and commitment, and usually becomes a crucial basis for self-evaluation.

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To the owner and operator of the family farm, especially one who has inherited the farm, farming represents lifetime employment as income is derived mainly from farm operations. Improving and expanding the farm are equivalent to career advances for the manager or the academician. Acquiring information and skills associated with innovations, e.g., use of the microcomputer for farm management, is similar to the surgeon's mastery of a new life-saving procedure. The former often are associated with gains in earnings and, among local associates, in prestige and possibly power. The more successful of the farmers may serve as directors of local organizations and of financial institutions. They often are in a position to influence decisions affecting the locality.

Plans and activities for improving farm operations provide direction, purpose, and commitment for the farmer and members of the family. Farming and related activities provide a continuity of experience over a lifetime, which could be passed on to the next generation should children choose to stay on the land. The continuity of experience which is a central feature of a career for the farmer also is associated with sustained contact with family and other community residents.

This life plan changes drastically when the farm is sold and one or both parents enter the urban labor force. Few older farmers will be able to establish a new career, for these are open mainly to younger persons with college degrees. Establishing a business and blue collar employment that offers the opportunity for skill development provide the best prospect of approximating a career. Continuity of work experience will be difficult to achieve as many ex-farmers have less seniority than younger people who joined the firm after leaving school. The modest skills required for many blue collar jobs do not permit period progression in know-how and responsibility characteristic of the typical career. The importance of these factors as personal goals will decline. Since work and advancement lose saliency and ability to motivate activity, personal energies may be directed to other, nonwork activities.

The satisfactions farming provides probably cannot be matched by factory employment as these depend largely on worker autonomy and ability to control work procedures.^[26] Few ex-farmers will have as much responsibility and autonomy as they had on the farm. Most will have a subordinate position in a bureaucratic structure, with much less opportunity to exercise discretion and judgment. Since nonfarm employment for many will involve

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lesser occupational responsibilities and rewards, there is far less likelihood of obtaining leadership positions in local organizations. For many of those who are forced to sell the farm and move to the city, especially those who do not receive substantial payments for their holdings, downward occupational and status mobility will be difficult to avoid.

Unemployment and Underemployment

Lack of work seldom is a problem for farmers. In bad years and in good years buildings and equipment must be maintained, plans formulated for next year's activities, arrangements made for obtaining seed, fertilizer, pesticides, breeding animals, manpower, and other inputs. While nonfarm employment may involve various benefits, such as higher wages, pensions, health plans, paid vacations, it also entails a higher risk of unemployment. Many former farmers and members of their families may be more subject to layoffs as they will have less seniority than persons of comparable age, as suggested above. People over forty may have considerable difficulty obtaining nonfarm employment.

Understanding unemployment requires consideration of the place of work in the lives of most Americans. Work provides a central focus for organizing activity, and planning one's life. Work provides "meaning" for life, even for those who hold menial positions, if the work is necessary and considered productive.^[27] These relationships are understandable since employment in an organization provides material and psychic rewards which link the person to society's core institutions and values.

The importance of work in America also is indicated by recent public opinion polls which found that a large majority of Americans value work, prefer to work hard, and consider its benefits as both moral and material.^[28] Work provides direction for most people, since daily activities are arranged to facilitate the performance of various work tasks. Family and organizational responsibilities have to be scheduled during leisure periods. Associations with colleagues in the office or plant help time to pass more quickly.^[29] Work provides a purpose for living, a basis for supporting a family and assisting children to achieve upward mobility.^[30] Prolonged unemployment deprives people of these goals. They become apathetic and withdrawn, consider themselves useless and superfluous and, when in public, often wander aimlessly.^[31]

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The consequences of unemployment do not disappear when the individual returns to work. The frustration, anxiety, and despair experienced during the layoff leave a painful residue. Employees who have been unemployed, even for a short time, tend to be more misanthropic and distrustful than those who have never lost their jobs.^[32] They also are more pessimistic about themselves and their children,^[33] since they view the organizations which determine their life chances as uncontrollable.

While these aspects of unemployment may not weigh heavily in any deliberations concerning measures to safeguard and enhance the water supply for arid or semiarid regions, they should not be overlooked or treated as inconsequential. For persons who suffer even occasional unemployment, the psychological, material, and social costs will be severe.

Decision Making and the Exodus from Farming

The decision or series of decisions which culminate in sale or retention of the farm connect the community changes resulting from adoption of dryland farming, the prospects for suitable nonfarm employment, and the locality's future. Despite the importance of decision making for countless farm families, the process has been largely neglected compared to studies of decision making in complex organizations. Some attention should be given this matter since it has a vital effect on the region, its communities, and inhabitants. The information could provide a basis for counseling families on the course of action most suitable for their circumstances.

Many factors discussed above operate to dissuade the farm family from moving elsewhere. These include anxiety over the transition to urban residence and employment, the separation from friends and kinfolk, from previous generations of the family. For those whose families have farmed for generations, moving severs ties with a venerable past. Friends, relatives, associates may suggest that such a decision should be postponed in expectation of some turn for the better. Delay of the decision, however, may not be in the best interest of the family, given the difficulties of the transition to a new and different type of community and mode of life. Prices for land and farm commodities may fall and require the family to take a sizable loss when the decision to sell is made. In the interim, considerable psychic energy may have been expended in the effort to save the farm

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and the family's roots in the community, leaving members with meager emotional resources for coping with relocation when the farm is sold. In the interim, coping with uncertainty and ambivalence will be trying, as family members are on the verge of becoming marginal to the rural community while having no base in the community to which they will move. Even for those farm families which adapt to dryland farming and obtain an adequate income, the psychological strain may be considerable.

Planning for Community Decline

Since community decline has multiple facets, as indicated above, a variety of adaptive strategies are required, both short term and long term. Short term policies should aim at limiting the exodus of people, resources, and organizations, and seeking, wherever possible, to strengthen the local economy. Establishing programs and, where necessary, organizations to accomplish these goals will counteract the fatalism which afflicts many residents, and provide leadership experiences for younger people. These will instill the confidence required for understanding more ambitious projects. Long-term efforts should be directed at obtaining nonagricultural functions and, when feasible, to restoring the area's resource base through some type of interbasin water transfer project. Although the prospects for such costly projects are dim at present, unforeseen events can put a different light on these proposals.

Some insight into the policies which migh^[34]t stabilize the rural community can be gained from the efforts to cope with similar problems in industrial cities. While the measures discussed below will not accomplish miracles, implementation should improve conditions in the farm community and protect the markets for the cities serving as rural trade centers. The strategies emphasize conserving resources, careful selection of improvement programs, and strengthening the local economy.

A study of planned contraction in Cleveland recommends a number of policies.^[35] Since any development program is costly and resources in a declining community are scarce, the conservation of local assets should be the first priority. Any savings will yield resources which, however meager, may be needed for future development programs. Every plan, including those which have been customary in the past, should be examined carefully to determine both feasibility and the benefits to the community.

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This type of rigorous scrutiny will reduce the likelihood that scarce resources will be squandered on projects which have little prospect for success.

Second, savings may be achieved from reorganizing various government agencies. In some Texas counties, for example, commissioners are responsible for certain functions in their precincts, mainly road maintenance and, in some cases, fire protection. Centralization of these functions in one countywide office can lead to more efficient utilization of equipment and personnel, and savings for taxpayers. In some instances, various work rules may be archaic and costly. Plumbers in Pittsburgh's water department, for example, did not drive vehicles to various work assignments. Other municipal employees had to be used for this purpose.^[36] For some counties and municipalities significant savings might be achieved by computerizing tax, voting, and other records, especially property assessments.

Third, some local functions might be transferred to higher governmental bodies, such as counties, regional authorities, and possibly the state. Highway maintenance, water and sewage services, and sanitary landfills are some of the functions which could be performed more efficiently by governmental units serving a larger territory and population.

Fourth, local officials and planners should assist and work with community organizations seeking to strengthen local institutions. The leaders of schools, youth groups, neighborhoods, and minority groups should be encouraged to improve their homes, localities, and institutions. Although such assistance might be construed as politicizing groups, which could lead at times to challenges of government initiatives, the dialogue resulting from such exchanges might lead to better plans and stronger citizen commitment to the locality. This form of cooperation between elected officials and local organizations may reaffirm the faith of all residents in the vitality of the local community and forestall the spread of defeatism, which could paralyze efforts to stabilize the area. Equally important, these efforts at cooperation will facilitate development of leaders to replace any who have left the area, and thereby revitalize the "grass roots."

Fifth, the possibility of using resources and facilities for purposes different from those in the past should be studied closely both for diversifying the economy and for conserving investment. One Ohio community, for example, converted a closed school building to a recreation center.^[37] The prospect of attracting or developing nonagricultural functions should be seriously

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examined. While this strategy might not be suitable for many farm communities, those near cities and major transportation facilities, especially highways, railroads, and airports, might attract some manufacturing or office establishments. Efforts to restructure the economic base may require some type of development group, a competent director, and cooperative relations with the state development organization. Local leaders must be willing to invest time, energy, and money in recruitment activities, which will encounter considerable competition from many other communities.

Finally, local groups should join with area organizations concerned with or having some responsibility for water resources. Since the problem of diminished water supply is regional, programs for long-term improvement must be applicable throughout the area and are likely to require collective action by the respective state governments. The transfer of water between some or all of the states in a region also will require a long-term, unified effort to gain the support of the legislative and executive branches of the federal government. A strong consensus on both the efficacy and political acceptability of a particular plan for interbasin transfer will aid such an effort. Since the outcome is highly uncertain, equal if not more emphasis should be given to improving the conservation and management of the region's water resources. Uniformity of governmental arrangements among the states for accomplishing this end might be beneficial. At present,

. . . laws concerning ground water vary from no statewide regulatory controls in Texas to full authority of the State Engineer to control ground water extractions in New Mexico.^[38]

Two types of regional coalitions may be useful, one consisting of government officials, the other of water resource associations in the respective states. Since these organizations have diverse interests, achieving consensus may require protracted periods of study and negotiation, and a broad program which includes urban and rural interests. Prospects for interbasin transfer may improve considerably if the project can ease shortages in both urban and rural areas.

Summary and Conclusions

The community, both rural and urban, is a vital link between society and its members. Involvement in institutions and the development of core values take place in the groups and organizations of the neighborhood and locality. It is through situations at work, and among kinfolk, neighbors, and parishioners that commitments to society's values, norms, and roles are maintained and affirmed. These forms of social involvement, by providing respect and prestige, reinforce the individual's self concept and confidence in ability to cope with the everyday tasks required for supporting a family and community.

Serious disturbances to relationships between levels of social organization and within the community occur often in industrial society, in this instance from depletion of a nonrenewable resource. Since the causes of such changes are indigenous to the industrialized, urbanized society, many solutions also must involve the larger system. This set of circumstances poses a dilemma for the rural community. Solutions often must be sought through coalitions with those in similar circumstances in other regions of the nation. Can communities which have lost assets to expanding communities muster the resources to shape policy decisions on the national level? The answer is particularly difficult when it is recognized that national and regional involvement can absorb resources and energies needed to adapt local institutions to conditions created by dryland farming.

This chapter has focused on processes of community decline and of community adjustment. The former takes place mainly through changes in the economy, polity, and population; the latter through use of political agencies, both local and extra-local, to stabilize the area and provide resources needed by both economic and social organizations. The chapter also has emphasized the social-psychological difficulties that those who have been displaced from the rural community will experience.

While adoption of dryland farming represents a realistic adjustment to the depletion of water resources in the semiarid West, the increased dependence on rainfall makes the rural community more vulnerable to drought and declining farm prices. If a drought should persist for several years, many farm communities will cease to exist.

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Whether these circumstances constitute a national problem depends on conditions elsewhere in the country. Whatever the pain and suffering which befall those who are forced to leave their farms and communities, the impact nationally may be minimal if the economy, both rural and urban, is sound, if unemployment is low and farm prices high. The difficulties in the West may be no more serious than a bad cold for an otherwise healthy person. If, on the other hand, the patient has been seriously ill for some time, occurrence of another problem may suffice to cause permanent damage.

The decline of agricultural productivity in the semiarid West combined with dislocation in industrial communities can aggravate the employment problem and weaken confidence in democratic institutions. Technological changes are eliminating many blue and white collar jobs. People displaced from rural communities, especially those who are older, will become part of an "underclass," along with those blue and white collar workers whose jobs were eliminated by technological changes and by the relocation of manufacturing overseas. A serious drought also will expand the numbers of people at the bottom of the social pyramid. Not only will the ranks of jobseekers in the city grow, but the nation's food producing capacity may be seriously impaired. The decline of the water supply and food producing capacity in a once fertile region should cause great concern in a nation which, for many years, has supplied food for people at home and abroad. The power of the United States in the world depends as much on the ability to produce food as on the ability to produce weapons.

Discussion:
Estevan T. Flores^[*]

The pressing problems and social impacts that farmers face in upcoming decades due to the decreasing availability of water are clearly and succinctly discussed by the Schaffers. No doubt, in

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the near future, a decrease in the number of small farms will continue with rural communities battling for survival in the face of decreased capital and human resources. The authors provide a rational and appealing strategy which rural communities and families might adopt in order to preserve the small farm as an institution. I will discuss a few salient issues brought out by the authors and present a brief account of an aspect omitted in the chapter, namely, the impact on migrant farm workers.

Primary responsibility for the reduction of the number of small farms in the U.S. has been placed on the corporate multinationals which have squeezed the small farmer out through competition in price, technological innovations, and other methods. The number of small farms has been markedly reduced during the last half century. The consequences of this reduction on the small farmer, when viewed in the context of water's declining availability, is discussed by the authors. Reduced opportunities and standards of living will befall the small farmer and family unit forced to remain in a declining agricultural community.

The authors argue that mobilization of resources along either ethnic or other organizational foci (e.g., religious) must take place if the endangered community is to survive. Alternatively, a community may seek to establish novel kinds of economic production previously not considered.

Small farmers will inevitably face the prospect of migrating to urban centers when their income declines beyond a certain point and no alternatives appear in sight. In this respect they will resemble Mexican-American/Chicano farm workers who have "settled out" of the migrant stream. An analysis of the adaptive measures both utilized by and provided for this ethnic group would be instructive for migrating white ethnics.

In the late 1960s and 1970s, a number of Department of Labor programs were initiated to assist underemployed or unemployed persons. Migrant farm workers who decided to settle in an urban community availed themselves of such programs as Job Corps, where they could acquire the labor skills needed to survive in a nonrural setting. For example, courses in carpentry and plumbing were offered. These programs were often successful in placing their graduates, though sometimes they were not, for a variety of reasons. The point is that some form of government involvement in the urban settlement of rural migrants (small farmers) might be necessary.

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One might speculate that under the Reagan Administration, which emphasizes government austerity, assistance of the type cited above might receive low priority, if considered at all. However, there remains governmental financial support for various domestic corporate groups (e.g., Lockheed and Chrysler), not to mention foreign governments (e.g., El Salvador and Brazil). One might suggest to communities which face decline and the prospects of migration that government assistance in both the place of origin and destination be provided. Methods of structuring such organizations are outlined by the authors.

The process of community decline is clearly and thoughtfully outlined. The loss of both human and monetary capital-but especially the loss of leadership-spells doom for a community. Where decline is evident and likely, consideration should be given to providing nonfarm occupational alternatives to the existing community and its organizations. Such foresight and the attendant program implementation would be costly, particularly in that recognition of the inevitability of the decline has psychic (individual) as well as social and economic effects.

An alternative to rural community decline is the creation of "federal relief zones" patterned after existing "disaster areas." Communities suffering from climatic and resource changes are as much in need of assistance as those suffering from "act of God," e.g., a severe flood. But does our society (i.e., government), especially now, value the institution of the small farm sufficiently that it would accord it relief? Possibly-but probably not. However, the federal government has entertained the idea of creating "business enterprise zones" in blighted central cities in order to help the climate of business in these areas. Should the federal government not extend assistance to industries other than big business?

In terms of the migration destination points of the small farmer, urban areas might also receive assistance from the federal government where sufficient numbers warrant such a program. This is a measurement problem. How many small farmers and their households are to be considered? In addition, what happens to migrant farm workers who also depend on the small farmer for seasonal employment?

Thousands of farm workers would be thrown out of jobs upon which they have relied. What alternatives will be provided for these workers?

In arguing for assistance to impacted rural areas, one could use the example of the federal government's aid to areas

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impacted by military facilities. Already there has been a four-year debate in Congress over the government's role in assisting southern border school districts with a sizable number of legal resident alien children. Should Congress pass such a bill, it could be argued that urban areas impacted by rural migrants should also receive assistance. The analogy is applicable.

The general strategy outlined by the Schaffers for community survival is rational and plausible. To accomplish these goals in the face of resource depletion, however, may be impossible. Resettlement assistance may be a better alternative. But will government come to the aid of the rural community (small farmers and farm workers) as it has for the business community? This question will be answered if and when the federal government responds to the political mobilization of communities in need.

Discussion:
William H. Friedland

My intention here is to comment on the Schaffers' chapter, and then to extend their analysis of the High Plains area to the entire West.

A major point concerns the generality of the phenomenon which the Schaffers discuss. The authors have described the anticipated social consequences for a specific declining aquifer. However, the outcomes they envision for the western High Plains can be utilized to describe American agriculture and rural society generally since the 1880s. In that time, U.S. agriculture and rural communities have undergone a massive transformation: the former has shifted to large-scale, commercial, chemically-based, energy- and capital-intensive; the latter (shading the social reality with only moderate exaggeration) has effectively vanished.^[1] Thus, what the Schaffers analyze as the possible product of a declining water resource turns out to be a near-universal phenomenon, occurring in other circumstances where water has not been the causal agent of rural community decline.

The specifics of this universal phenomenon vary from place to place, region to region, and in different historical periods of U.S. agriculture. We need only note the decline in the percentage of the labor force dedicated to agriculture, forestry, and fisheries from over 50 percent in the 1880s to 3.6 percent at the present^[2] to understand the universality of the phenomenon. A similar process has also occurred in other rural occupations such as fishing, lumbering, and mining and mineral extraction.

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In the midst of this decline, the West has found a "solution" to the water problem, although the social outcome remains very much the same as in the Ogallala area. The resolution of the water problem through developing community organization and alliances has been undertaken in the West through powerful political organization. This has produced a rich and complex network of physical transformation to dam and carry water over distances previously unknown in human history: the western water developments that have taken place since the adoption of the 1902 Reclamation Act.

These developments, however, have not produced rich and varied community life. Rather, as documented by social scientists such as Goldschmidt, they have produced a wealthy agriculture accompanied by limited human communities.^[3]

One could conceive, of course, of a programmatic solution to the declining Ogallala aquifer, but it is unlikely, in the present or projected political and economic climate, that works of such magnitude would be feasible.

The Schaffers pose several problems that should be briefly mentioned.

First, there is an implicit contradiction between the authors' discussion of the value system of the United States with its emphasis on success, material acquisition, and "free market" orientation, and the exigency to plan for the kind of social change they envision with the depletion of the aquifer. I can only wonder why, for example, planning seems impossible for the management of the Ogallala resource so that its depletion will end and that community life, perhaps with reduced "success," can continue.

Second, an even more fundamental question cries to be asked: what is-or should be-the policy of the U.S. in agricultural production when the U.S. is exporting crops in such volume abroad? Should we be seriously worried about the maintenance of a production system that has created such abundance that its disposal has constituted a major problem for the nation for over 50 years? In other words, why worry about maintaining or expanding production levels? Why not worry about social policies to form a different economic base for human communities in the Ogallala area and elsewhere?

And finally, any "solutions" for the problems of community decline suggest one additional question that should be asked: who benefits? Investments in social infrastructure such as occurred under the Reclamation Act have benefited varying

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segments of the U.S. population differentially; not everyone has benefited equally as a result of the Reclamation Act. In the Westlands Water District in California, for example, the benefits to large landholders of federally subsidized water are different from those to farm workers, to mention but one social category. The justification for such water projects has been that they benefit all of us, i.e., the "public." It is unclear that the public benefits anywhere near as much as some tiny and privileged segments of U.S. society. In other words, to put the matter bluntly, wealthy and powerful interests benefit more from such projects than poor people. Should this be the way in which federal policy operates with respect to water development?

Chapter 14:Social Impacts Upon Urban Communities

Chapter 14-
Social Impacts upon Urban Communities

by Lay James Gibson

Abstract

Initially, a simple general model is introduced to describe what might happen should irrigated agriculture be eliminated or greatly reduced in the semiarid West. Consideration of this general model raises a number of additional questions: (1) what are the spatial patterns of potential impacts?; (2) what are the employment implications, i.e., how many workers are involved?; and (3) what are the potential scale and other mitigative effects-e.g., to what extent will geographic scale of analysis or previous experience influence the magnitude of impacts? The first question is addressed by analysis of several maps which show the location and relative importance of irrigation agriculture. Data clearly show that irrigation activity is highly concentrated in a handful of states. Furthermore, within these states irrigation agriculture is often spatially associated with metropolitan areas. The second question is approached through case studies which focus on agricultural employment in three states which have exceptionally high levels of irrigation agriculture. "Worst case" estimates of employment dislocation are offered. Even worst case estimates suggest relatively modest dislocations. Finally, speculation is offered as to the scale effects and other mitigative effects that will likely soften dislocation impacts. Impacted regions have opportunities to adjust to diminished water supplies by adapting new farming practices and technologies. Additionally, we can anticipate that impacts will be spread over space, they will occur gradually through time, and governmental intervention can be expected to assist both rural and urban distressed areas. Given the history of outmigration from agricultural areas, additional declines in agricultural population are likely to be of modest magnitude and of manageable proportion when viewed from both the perspective of rural sending areas and of urban receiving areas.

In the years since 1945, total land in farms in the United States has declined by 10 percent, as has acreage of harvested

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cropland. The number of acres of irrigated land, on the other hand, has increased by 147 percent. In 1945, there was one acre of irrigated land for every 22 acres of cropland; today the ratio is one to nine. The growth of irrigation agriculture in both relative and absolute terms has been an important topic of concern among resource managers, politicians, and the general public. Water transfer projects, groundwater draw-down, and agriculture-urban/industrial water allocation conflicts have all received widespread attention.

Studies of water for agriculture normally focus on supply or demand within an agricultural region; more rare are studies which deal with secondary effects of intraregional shifts in supply or demand for water. This chapter looks at interregional linkages-the spill-over effects on urban regions that might be associated with reductions in supply of water within agricultural regions. Special emphasis is placed on social/demographic impacts. The paper is organized around three main topics: (1) a general model of intra- and interregional relationships; (2) calibration of the populations involved; and (3) speculation about the full consequences of impacts on the urban sector of limited water for agriculture.

A General Model

A general model for understanding what might be expected if quantities of water for agriculture were greatly reduced is fairly simple. Reduction of supply of water would reduce the amount of land used for agriculture (or at least the intensity of use). This, in turn, would reduce labor requirements (both proprietors and wage earners). Displaced workers might live within the impacted region or they might be "seasonals" who live elsewhere, but in either case they would be without jobs. A few might find employment in their local region's agricultural sector or in other industries in their local areas. Others might, at least in the short term, rely on public assistance in their home region, but most are likely to eventually find themselves in an urban residential environment and in an urban job market. It should be noted that whereas many agricultural workers live in rural settings, many others live in, or in close proximity to, relatively large urban centers, e.g., Fresno and Phoenix. These "urban farm workers" look beyond the city for jobs and in many cases, actually live away from home for much of the year. The

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important notion at this point, however, is that regardless of place of residence, a large share of those who depend on irrigation agriculture for their livelihood would be forced to look toward urban centers for employment if supply of water available to agriculture were greatly reduced. There would be increased reason for these "irrigation workers" and their families to become integrated into the urban mainstream.

A slightly more detailed version of the simple model starts with reduction in direct agricultural employment. These reductions, in turn, produce secondary employment reductions through the multiplier effect; these secondary reductions are likely to be felt first by those in agricultural service activities, e.g., cotton gin employees, and later by those who provide a whole range of goods and services (both public and private) within the impacted regions. Workers made redundant may take other jobs in the impacted region or they may persist, supported by transfer income. But most are likely to head for urban centers with their families. If those displaced already reside in, or adjacent to, urban centers they will likely be forced to become more a part of the urban scene. We might speculate that for every three agricultural families forced to relocate, there will be one "secondary family" that, eventually, is forced to relocate.

Before speculating about specific urban impacts, it is logical to ask questions about the number of workers involved and their locations. Similarly, questions must be asked about the places where water is used. In this paper, critical locations are defined in terms of irrigation. Obviously, all types of agriculture use water. But on the assumption that large water consumers are spatially associated with irrigation and, because irrigation agriculture is frequently labor intensive, attention is focused on leading areas of irrigation agriculture.

Location of Irrigation Agriculture

The relative and absolute importance of irrigation activity is shown on Tables 14.1-14.3 and Figures 14.1-14.3. As can be seen by inspection of Figure 14.1 and Table 14.1, 50 percent of all cropland harvested in seven states is irrigated; irrigated cropland is a conspicuous part of the total in nine other states. These are the states with a high relative dependence upon water for agriculture-states where reductions in the amount of water available would seriously modify the agricultural landscape. It is interesting to note that whereas western states dominate the list, large relative dependence upon irrigation is not a feature exclusive to the West.

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[Full Size]

Figure 14.1
Irrigated Cropland as a Percent of Total Cropland Harvested

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Figure 14.2 and Table 14.2 also show relative dependence on irrigation, although the pattern is different from that shown in Table 14.1 and Figure 14.1. The variable described here is a sort of "potential landscape change" variable-it suggests that agricultural landscapes, especially in California and Idaho, would change dramatically were irrigation to be withdrawn. The implications are, perhaps, more aesthetic than economic. It is interesting to speculate about the extent to which irrigation creates rural landscapes that somehow enrich the lives of those who pass through them-especially when the irrigation provides a sort of greenbelt around urban centers. A noteworthy feature of these data, when compared to those previously described, is the fact that the same states appear on both lists but their rank order (and interval scale position) is very different on the two lists.

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[Full Size]

Figure 14.2
Irrigated Land as a Percent of All Land in Farms

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The third measure of location and importance of irrigation agriculture is provided by Figure 14.3 and Table 14.3. In terms of absolute shares, California and Texas are clearly the U.S. leaders with almost one-third of all irrigated land. These two states, along with Nebraska, Colorado, and Idaho, account for over one-half of the irrigated acreage in the U.S. These states, presumably, would be the hardest hit by massive reductions in the amount of water available for agriculture.

Metropolitan Irrigation Agriculture

The distribution of irrigated land among the states of the United States is clearly not even; the same can be said about the distribution of irrigated acreage within each state. In some leading "irrigation states" a large portion of the irrigated acreage is found in metropolitan areas. Tables 14.4 and 14.5 provide information on what might be called metropolitan irrigation agriculture. Whereas data do not specifically describe irrigated agriculture on the urban fringe (some SMSAs include large, remote areas), they do support the assertion that much irrigation activity, and presumably employment, is already spatially associated with metropolitan systems. Many of those working in metropolitan irrigation agriculture may hold nonurban values and beliefs, but they are likely to be more familiar than their

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[Full Size]

Figure 14.3
Location of Irrigated Land: Percentages of U.S. Total

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rural counterparts with urban values and opportunities. Should irrigation activity decline, it is likely that metropolitan irrigation agriculture workers will find the adjustment process much less stressful than their more rural counterparts.

The six states listed in Table 14.4 together account for 61 percent of the irrigated land in the United States. They are a mixed group in terms of the importance of metropolitan irrigation agriculture, but the figures clearly indicate that metropolitan irrigation is a conspicuous feature in some parts of the country. California is clearly the most noteworthy. This state has 17 percent of all irrigated land in the U.S., and 52 percent of it is in SMSAs. Put another way, 9 percent of all irrigated land in the U.S. is in California's SMSAs. Texas, the nation's second ranking irrigation state, has about one-fifth (19 percent) of its irrigated acreage in its SMSAs; 3 percent of all irrigated land in the U.S. is in a Texas SMSA. Fourth ranked Colorado (Table 14.3) also has about one-fifth of its irrigated acreage in an SMSA.

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Data for a small group of SMSAs with substantial irrigated acreage are given in Table 14.5. California clearly dominates, but Texas and Colorado make a strong showing. Just three California SMSAs alone hold over 5 percent of the irrigated land in the U.S.

Sources of Impacts and their Magnitudes

Ideally, data would be available to describe the number of workers in irrigated agriculture by county in the U.S.; no such data exist. This is unfortunate inasmuch as such figures are needed if we are to know just how large the potential urban impacts might be. At least some light can be put on the problem by estimates of number of workers subject to dislocation. Such estimates will clearly not yield exact numbers, but they will provide at least a general picture of the order of magnitude and spatial distribution of potential urban impact source areas.

It must be recognized that estimates presented in this paper are "worst case" estimates. Estimates of number of employees dependent on irrigation agriculture are very likely higher than the actual number that might be affected by major declines in irrigation activity. The use of "worst case" estimates is standard practice for many types of planning. The military, for example, when evaluating the impacts of a base closure, will use a worst case scenario to assure that plans cover a wide range of possible outcomes. In this study, the worst case is used partly to protect against understatement and partly for more immediate reasons. Specifically, the data which are utilized when making estimates are simply not detailed enough to allow for exact determination of the extent to which individual workers depend upon irrigation.

Source Areas

Although no data exist to describe the number of workers in irrigated agriculture per se, data do exist to describe agricultural employment in counties dominated by irrigation agriculture. For the purpose of generating employment estimates, it will be assumed that all workers in a county with 80 percent or more of its total cropland in irrigation are employed in irrigation agriculture. Obviously such an assumption will overstate the actual numbers inasmuch as workers for noncropland related uses are not discounted. Nor does such an assumption account for variable labor needs of different crops or for farm management practices. But such an assumption is justified in that it will produce

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at least macro-level estimates which will be of value in establishing the location of broadly defined source areas.

In arriving at direct impact estimates, data on proprietors, hired workers (both paid and unpaid), and agricultural service workers were gathered for key counties in three leading irrigation agricultural states. Specifically, 11 California counties, 16 Colorado counties, and 16 Idaho counties-all with more than 80 percent of their total cropland in irrigation-were inventoried. Variables were defined as follows:

·Proprietors: one per farm was assumed.

·Hired Workers: This term covers paid family workers. Those working 150 days per year or more were discounted by 0.1 to account for some who do not work a full year. Those working less than 150 days per year were discounted by 0.8 to account for those who (a) work less than 5 months per year, and (b) are double counted because they work for more than one employer.

·Agricultural Service Workers: Workers of this type are reported as "paid" and "unpaid" and by the period worked (less than 150 days or 150 days or more). Workers, without regard to pay status, are discounted using the multipliers provided above.

The net result is a series of estimates of full-time-equivalent workers (FTE) that would be displaced if irrigation agriculture were discontinued.

Case Studies

At this point, we shall retreat to case studies of three states which would suffer relatively great losses if irrigation agriculture were discontinued. Ideally, perhaps, we would have a general model which would allow us to produce reliable estimates of labor loss throughout the country. Unfortunately, data are not available that allow the creation of such a model; place-to-place variations in labor utilization are simply too great. Even generation of state multipliers for case studies is hazardous, but statespecific estimates will at least provide figures of general utility. Case studies of California, Colorado, and Idaho are offered to illustrate what the loss of irrigation might mean to three very different areas.

California would clearly be hard-hit by reduced supply of agricultural water. With 8.6 million acres under irrigation, this

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state is certainly irrigation oriented. California has some 1.3 million persons working in agriculture (including agriculture services). The state's estimated FTE employment (using the procedures outlined above) is 511,601. Using data on California's 11 principal irrigation counties, it is estimated that there are 0.0344 FTE workers per irrigated acre for a total of 295,968 FTE irrigation workers in all counties. In other words, 58 percent of what might be called "full-impact" agricultural employees depend on irrigation agriculture; these are the workers who would be displaced if water is no longer available to agriculture.

Whereas this number is certainly substantial, it must be remembered that California has a civilian labor force of some 11 million-displaced agriculture workers would produce unemployment increases of about 3 percent if all 296,000 workers entered the job market at the same time. Colorado, without irrigation, would lose 70 percent of its estimated 59,000 FTE agricultural workers-a dramatic percentage loss, but less serious than the California case, because Colorado has a smaller irrigated area (3,458,031 acres) and a smaller "body count" (108,766). With a civilian labor force of about 1.4 million, Colorado (like California) would suffer an increase of unemployment of about 3 percent. This is a significant figure, but probably not a disastrous one.

The situation in Idaho is a bit different inasmuch as Idaho does not have the benefit of a broad industrial base as do California and Colorado. With 3.5 million acres of irrigated land-just a bit more than Colorado's figure-Idaho is clearly a ranking state in irrigation acreage. With 114,151 persons in agriculture, this sector enjoys prominence within the state's overall economy. It is estimated that elimination of irrigation agriculture would see the loss of 38,591 of the state's estimated 55,872 FTE agricultural workers-69 percent. Since Idaho's civilian labor force is only some 425,000, irrigation losses of 38,000 or so would represent a major blow to the economy.

Potential Impacts and Potential Mitigative Effects

Metropolitan areas such as Fresno, Sacramento, and Bakersfield in California's Central Valley, and Phoenix, Arizona, already have large communities of agricultural workers living on their margins. Substandard housing, poor sanitation, and other deficiencies are common in such places. The prospect of these

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areas and intercity areas growing to several times their current populations because of an influx of displaced farm workers is indeed disturbing. And it is clearly likely that displaced workers would turn to urban areas in large numbers if their source of agricultural income were to disappear. Geographic interaction theory suggests that migrants are most likely to select proximate destinations; metropolitan areas in the impacted regions would be the greatest beneficiaries of rural-to-urban migration, at least in the short term. Such migration would certainly produce a new poverty class in the receiving areas-to a large extent, the migration process would reduce levels of rural poverty by increasing levels of urban poverty. A large group without financial resources would now be given the added burden of adjusting to a new and essentially foreign way of life. Social networks would be broken down in sending areas; new networks would need to be built in receiving areas. Potentials for conflict would be numerous as former agricultural workers move to urban areas and compete for low-cost housing and low-paying/low-skill jobs with an existing group of urban poor-an urban poor with longer tenure and better developed urban survival skills.

Evaluation of potential impacts of displaced agricultural workers on urban areas is tricky for two types of reasons. First are a series of items related to agricultural production practices and technologies. Second are a number of considerations that define the nature of the impact process itself. It must be remembered that the estimates of workers affected are "worst case" estimates of the total number that could potentially be displaced. It is highly unlikely, however, that rapid, wholesale displacements would occur.

Practices and Technologies

All regions, including those now experiencing diminished supplies of water for agriculture, have a number of ready options available to prolong their life as productive agricultural areas. Perhaps the most obvious is a move to (or return to) dry farming. Many areas which now depend heavily on irrigation were originally developed as areas of dry farming. Second, many areas might turn to crop substitution for their salvation, i.e., more water efficient crops might be introduced to replace the heavy water users now cultivated. Third, new field preparation techniques which encourage water conservation, e.g., laser leveling, might be employed. Fourth, new water-efficient irrigation practices might be introduced. Fifth, water transfers or even deep wells might prove to be the answer in some areas.

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The options selected will depend upon the willingness of an area's farmers to adapt new practices and technologies and on the ability of the natural environment to support them. But at least in many places, agriculture can be expected to persist even in the face of diminished water supply.

The Impact Process

The nature of the impact process itself is also important to consider.

1. Geographic Scale . Even "worst case" estimates of nationwide impacts might suggest a situation that would be serious but not disastrous. However, when these same estimates are applied to specific urban areas, potentials for negative impacts will often be substantial, i.e., impacts are likely to be concentrated in a relatively small number of urban areas in California and the Southwest. California would clearly suffer the greatest impacts. Further, water here is often more than simply an amenity that allows for diversity in crops or increased yields-it is often essential for the very existence of commercial agriculture. Perhaps one bright spot for a place like California is the fact that many of its farm workers are now employed in close proximity to metropolitan areas-they are already somewhat "street wise." A number of other states (see Tables 14.1-14.3 and Figures 14.1-14.3) would also be impacted, but in most cases impacts would be less severe because the number of workers involved is less and because the opportunities for alternative employment in agriculture within the general area are greater.

2. Timing. Obviously, the time period involved is critical. If all irrigation agriculture were eliminated simultaneously, impacts would be dramatic. If, on the other hand, reductions in irrigation activity were spread over a number of years (as they certainly would be), the adjustment process would be much smoother. In fact, one could argue that the impacts of a relatively long-term rural-to-urban relocation would be little more than an extension of shifts that have been in evidence since the turn of the century. Further, it might be argued that because numbers of people are relatively small, especially in relation to the size of receiving centers, and major receiving centers, e.g., western metropolitan areas, are usually high-growth areas anyway, new populations could be accommodated with only minor dislocations.

3. A Further Note on Timing. The history of decline of agriculture population and labor force merits additional comment because that trend serves as a standard against which the

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severity of irrigation losses can be measured. In the 40 years between 1940 and 1980, U.S. farm population declined by almost 500 percent or 24,500,000 people (Table 14.6). During this period, U.S. population grew by 72 percent to the 1980 figure of 227 million. During the period 1950-1970 alone, farm population declined by over 13,000,000. Every state experienced declines during these years (Figure 14.4); with the exception of Texas, the biggest losers were not states with large areas in irrigation. Nevertheless, the six leading irrigation states did lose over 1.6 million farm population-not a trivial number.

A somewhat different accounting system (Table 14.7) produces another picture of decline that is essentially consistent with the one just presented. Agriculture's role in the U.S. labor force has declined significantly in both absolute and relative terms since the late 1940s. The agricultural labor force has declined by about 4.6 million; agriculture presently directly supports only about 3 percent of our total labor force.

Using figures presented elsewhere in this chapter, we can produce a rough estimate of irrigation agriculture employment for the nation. An estimated figure of 1,000,000 is offered for purposes of discussion. Such an estimate almost certainly overstates the true number, but such overstatement is consistent with the "worst case" approach. But the important point is this-given the history of decline of both "agricultural employment" and "labor force," the worst case still presents us with a situation which is considerably less dramatic than our actual experiences in the years following World War II.

4. Alternative Livelihood Opportunities. Not all displaced workers will leave the impacted region. At least some will shift jobs without leaving their present place of residence. Still others will stay in place and substitute transfer income, e.g., public assistance, for earned income. Finally, some secondary breadwinners may simply drop out of the labor market. Aggregate family income would suffer in such cases, but if the primary breadwinner's job is secure there will be little reason for at least many of them to move one.

5. Diffusion of Impacts. Some workers are migrants with home bases in many parts of the country and even in foreign countries. Their expenditures in areas where they are employed are usually modest at best; their absence should go largely unnoticed in employing regions. Since sending regions are widely dispersed, impacts above the family level should be minimal here, too.

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[Full Size]

Figure 14.4
Farm Population Declines Between 1950 and 1970

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6. Political Considerations. The farm lobby is still strong in the United States. There is every reason to believe that even if political pressure cannot make water, it can make waves-waves which will produce support for projects and programs designed to extend the agricultural life of impacted regions.

In short, both farm operators and farm workers have numerous opportunities for minimizing or at least delaying impacts. The full force of any potential impacts will certainly be blunted by the fact that they will be spread through time and over space. But perhaps the greatest comfort comes from knowing that, after decades of outmigration from agricultural areas, there are just not that many people left that can be displaced.

Discussion:
Darrell K. Adams

During the past decade, the research area subsumed under the title "social impact analysis" (SIA) has increasingly seen a focus in approach which suggests, if not the beginnings of maturity, at least the close of the adolescent period of development. We began this enterprise with a plethora of approaches which had, as a common feature, a kind of encyclopedic examination of the social world, in an effort to assure that nothing of importance escaped scrutiny. Now, the focus is on narrowing the range of variables to those significant to a decision.

A general paradigm for SIA now usually includes some provision for assessing changes in (1) employment, (2) income, (3) population, and (4) the social meaning those changes might have from a variety of perspectives. The first three constitute "impact" analysis (i.e., an analysis of a measurable change directly attributable to some other changed circumstances), while the fourth would be a "social effect" analysis, or an assessment of social meanings and interpretations of impacts.

Gibson has presented a model designed to examine the urban impacts of reduced water availability for agriculture in the West. As he indicates, the model is quite straightforward. A reduced water supply would tend to reduce agricultural production with reduced labor requirements displacing workers which, in turn, would result in residential relocation (rural to urban). This general paradigm is used to organize data so as to answer some important questions dealing with the spatial location of areas of severe impacts in terms of numbers (both absolute and as a proportion of workforce). Thereby, contributions are made to:

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(1) scoping the potential problem, and (2) spatially locating the potential problem areas. While Gibson does not offer his analysis as the definitive answer, his contribution is nonetheless instructive. The potential for negative impacts of some significance in a relatively small number of urban areas in California and the Southwest is noted. He then comments that even these potential problem areas are subject to a variety of reasonably mitigating conditions.

One might be inclined toward a relatively sanguine view of the urban impacts of a reduction in water supply for irrigated agriculture in the West from Gibson's analysis. However, such a view could be somewhat premature. The model is yet in an early stage of development, and emphasis is placed on employment (number and location of jobs) and population movement impacts. These are but two of the four general classes of variables useful for analyzing social impacts and effects.

As the next stage of development of the model, it would be helpful to trace the income variable through the model. Reduction in crop intensification or reversion to dryland practices on the same amount of land should result in reduced farm income. Reduced farm income, in turn, would have a variety of other impacts. It might, for example, eventually result in reductions in urban support facilities and services. Such reductions would adversely impact both long-time urban residents and newly displaced rural-to-urban migrants needing such support. It is possible, especially during periods of poor economic conditions, that such impacts could be significant and troublesome. The actual significance of this and other multiplier effects would need to be examined in further development of the model.

The other major class of variables-the social effects analysis-would be more difficult to assess. If reasonably solid assessments of the spatial and temporal locations of employment, income, and population impact variables were available, they could be presented to the potentially affected publics in order to obtain their interpretations of the social meanings of such impacts. This analysis becomes more complex because, as we have found in site-specific social analyses, each significantly affected group of the public is likely to have a different interpretation of the social meaning of a particular event. In the same way that a one-dollar change-in-income will have different meanings for a wealthy person than for a poor person, the projected impacts of reduced water supplies for irrigated agriculture upon employment, income, and population will have different social meanings for different groups and communities.

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It is important to recognize that, regardless of the practical difficulties of completing the social effects analysis, it is only at this stage that a thorough understanding of the social importance of the impacts is attained. Toward this end Gibson's model has made a useful contribution.

Discussion:
Evan Vlachos

Gibson's presentation addresses the major question of trying to anticipate the general impacts of limited water for agriculture in the semiarid West and, more specifically, the potential effects on urban localities. One must really relate this particular chapter to earlier community migration studies, as well as to the vast literature that developed after the National Environmental Policy Act. The latter, in particular, has contributed to elaborate conceptual and methodological frameworks concerning the assessment of direct and indirect impacts of programs, projects, or activities on the surrounding environment. In this context the search for an accounting of all relevant impacts became not only a legal requirement, but also raised important theoretical questions leading, perhaps, to a more cogent interdisciplinary model incorporating the sets of circumstances and web of interactions that contribute to both short-term as well as far-reaching consequences.

Gibson bases his argument on a rather greatly simplified "model" in which, as a result of the reduction of water supply and with attendant reduction of labor requirements, displaced workers (particularly those living around metropolitan areas) will increase the population of surrounding urban localities. Such a "model" must obviously be further elaborated by considering three major subdimensions that eventually could more accurately describe both impacts and long-range consequences, namely:

a) the classical demographic understanding of migratory movements in terms of "push and pull" factors (i.e., reasons for out-migration as well as forces of attraction of specific localities);

b) the overall time as well as the rate of change, i.e., both the entire time horizon (whether temporary or permanent) and the rate of transformation (whether rapid or slow);

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c) the composition of migratory stream, especially in terms of ethnic, racial, sex, and other components.

In Gibson's presentation the model concentrates on calculation of impacts in agricultural states as a result of the number of workers who might migrate if water supply is reduced in the irrigated West. Quite correctly, Gibson points out that since no relevant data exist, guestimates must substitute for precise information. He points out that, depending on the particular case, although there may be significant numbers of potential migrants, the overall movement to urban localities may not be particularly disastrous.

In trying to supplement Gibson's discussion I would like to point out additional items that could be meaningful.

First of all, one should take into account not only the "formal" agricultural population but also (especially in the case of California) "invisible" workers. Reference should be made to alien workers who have not traditionally been counted and whose contribution to the surrounding economies may be quite significant (directly and indirectly).

The distinctions made by Gibson between Colorado and California, on the one hand, and the expected impacts in the case of Idaho, on the other hand, depend on the economic and sectorial composition of these three states. Since Idaho does not have the broad industrial base of California and Colorado, it should be much more significantly affected (although again the number of alien workers may alter the extent of expected effects). Yet, despite their historical backdrop, many states in the West have been recently characterized by more diversified economies and more resilient localities, especially urban centers of high absorptive capacity (such as the emerging megalopolis of Colorado's Front Range).

In addition, throughout Gibson's chapter there seems to be some vacillation as to the ultimate consequences of a reduction of water for agriculture. While in certain parts it is emphasized that there may be some significant consequences, elsewhere (see notably the conclusion) it is pointed out that the potential urban migration is simply part of the continuous urbanization and suburbanization of American society and of diminishing farm employment. Heavy automation in American agriculture and the emergence of an efficient agribusiness industry may also account for hypothesized minimal impacts, certainly not of the proportions of previous migratory movements such as those felt during

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the drought of the 1930s and the exodus associated with the Depression era.

All in all, Gibson has correctly pointed out both the inadequacies of the present data as well as the essential parameters of a broad model that could account for the relationship between existing population concentrations in agriculture and the increasing urbanization in the West. If one is to examine the importance of irrigated agriculture and the potential of far-reaching social consequences stemming from water reductions, further distinctions and elaborations must be made with regard to the type of affected populations, particularly in terms of the demographic characteristics of such states as Colorado and California; in terms of the ability of cities and of surrounding urban and semiurban localities to absorb the limited number of workers currently employed in irrigated agriculture; and in terms of larger social policies that can cushion the effects or could mitigate earlier disastrous voluntary and nonvoluntary population movements.

The above remarks should not be construed as implying that there can be no negative impacts from a potential reduction of water in agriculture. Indeed, what is most important is not the total number of people who may be affected. More important are the far-reaching social consequences-and the transition from a predominant ideology and culture that still emphasizes a balance between rural hinterland and urban localities, to one of a highly urbanized and intense postindustrial economic base. What needs to be recognized vis-a-vis the urban impacts is to what extent urbanites, especially refugees from the humid East, are capable of understanding the cultural heritage of irrigated agriculture in the West. Can they respond with sensitivity to the need for coexistence with irrigated agriculture-that agriculture being both a means of survival and a way of life that has characterized the salubrious environment of the western United States? Otherwise, an alternative view (perhaps even a future scenario) may be a totally transformed "Sunbelt" characterized by cybernetic industries, hydroponic farms, water for energy development, and a playground for the rest of the nation, with only dim memories of irrigated agriculture.

Chapter 15:Environmental Impacts

Chapter 15-
Environmental Impacts

by B.A. Stewart and Wyatte Harman

Abstract

Agricultural activities affect the environment in four general ways: (1) use of chemicals to increase agricultural production, (2) excessive and/or inefficient use of water, (3) injudicious agricultural practices, and (4) conversion of lands to expand cultivated crops. The extent to which the environment will be affected by agriculture in the future will depend on many factors, perhaps the greatest of which will be the degree of pressure placed on soil and water resources to meet demand for food and fiber. It is clearly recognized that the environment will be changed as land use and crop production practices evolve. The impacts will not, however, always be negative because many agricultural practices lead to an enhancement of the environment.

This paper examines trends and projections of future requirements for food and fiber, the likely changes in land use that may be required to meet these demands, and the possible impacts of these land use changes on the environment.

Agriculture in general, and irrigated agriculture in particular, has impacts on the environment, positive or negative. Irrigated crops account for more than 25 percent of the total value of crop production in the United States, but require only 14 percent of the cropland. Irrigated acreage has increased dramatically, growing from about 18 million acres in 1939 to 37 million in 1958 and 58 million in 1977. At the same time, cropland acreage dropped from 531 million acres in 1939 to 449 million in 1958 and 413 million in 1977. A positive impact of the increase in irrigated acreage is that the overall quality of cropland has improved because some erodible cropland has been put to other uses. However, high rates of fertilizers and pesticides sometimes used on irrigated lands can degrade the environment. The conversion of lands into irrigated agriculture may also have diminished wildlife habitats.

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Irrigated acreage is expected to increase in the future, but at a slower rate because of competition for limited water supplies and the depletion of groundwater in several areas. The 1978 National Water Assessment projected that an additional 6.9 million acres would be brought under irrigation by the year 2000.^[1]

Considerable attention has been given in recent years to the effect of agriculture on water quality. Stewart et al. (1975), Unger (1979), Bailey and Waddell (1979), and White and Plate (1979) are among those who have assessed the potential for pollution and have suggested appropriate management practices.^[2] Environmental effects of agricultural activities arise from four general sources: (1) use of chemicals to increase agricultural production, (2) excessive and/or inefficient use of water, (3) injudicious agricultural practices, and (4) conversion of lands to expand agriculture.

The extent to which the environment will be affected by agriculture in the future will, of course, depend on many factors. Perhaps the greatest single factor will be the degree of pressure placed on the soil and water resources to meet the demand for food and fiber. Therefore, consideration will be given in the following discussion to the trends and projections concerning future requirements for food and fiber, the likely changes in land use that may be required to meet these demands, and the possible impacts of these land use changes on the environment.

Projected Demands for Food and Fiber

World food production is projected to increase 90 percent over the 30 years from 1970 to 2000. During the same period, population will increase about 50 percent. While these projections indicate a per capita increase in food, world distribution problems will remain. The bulk of the increase will continue to go to countries that already have a relatively high level of food consumption. Meanwhile, food will remain scarce or actually decline below present inadequate levels in many of the less developed countries.

Over the next 20 years, USDA projects the demand for U.S. agricultural products to increase by 60 to 85 percent over the 1980 level. The increased demand will be due to growth in exports, increased domestic use for conventional purposes, and for ethanol production. However, these projections are based on the assumption of constant real prices. A significant rise in real cost

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of agricultural products in general, and food in particular, could drastically alter demand. Export demand will have the greatest impact because presently the harvest from one-third of U.S. cropland is exported, and USDA projects the volume of U.S. exports by the year 2000 to grow by 140 to 250 percent above the 1980 level.

The projection that demand for U.S. agricultural products will increase suggests that there will be major changes in land use. Negative impacts on the environment can be minimized or avoided if these changes in land use can be seen in advance and adequately planned.

The production of food and fiber in the United States has increased dramatically during the past 40 years, even while the amount of cropland harvested declined by more than 20 percent. The primary reasons for this remarkable achievement have been the use of fertilizers and pesticides, a vast expansion of irrigated acreage, improved crop cultivars, and improved management practices. During the 1960s crop yields increased nationally at an average annual rate of 1.6 percent, which was sufficient to meet increased demands. However, during the decade of the 1970s, the average annual yield increase dropped to 0.76 percent, and three-fourths of the increased production had to be met by an increased acreage of cropland. After several decades of declining or stable cropland acreage, the 1970s saw an increase of more than 60 million acres in harvested cropland.

The National Agricultural Lands Study (1981) concluded that if the yield increase rate of the 1970s continued until 2000, and projected demands materialize, an additional 140 million acres of land would be required for the production of principal crops, or an increase of about 50 percent.^[3] Even at the 1.6 percent yield increase rate of the 1960s, some 85 million acres of additional cropland would be required. While there is little consensus among the agricultural community as to the future rate of increase in yields, a good case can be made for a continued diminishing rate of increase due to rising costs of fuel, fertilizers, and other energy inputs; declining water supplies to sustain the growth in irrigated acreage that occurred during the past few decades; a lowering of the average quality of cropland as fragile lands are used for principal crops; and loss of soil productivity due to erosion and salination. Although there is enough land that could be shifted into cropland to meet the projected demands, even at the low growth rate of increased yields of the 1970s, the cost of food and fiber in real dollars may rise

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significantly since production incentives will be required to develop such an expanded crop acreage. Rising costs may, in turn, reduce demand. In view of these complexities, it is difficult to project with accuracy the additional cropland which will be required by 2000 to meet the demand for U.S. agricultural products. It seems safe to conclude, however, that the acreage requirements will increase.

Impacts of Land Use Changes on Soil, Water and Air Resources

Many Americans take soil and water resources for granted. There has been sufficient soil, and usually enough water, to grow all the food and fiber needed in the U.S., and then some. Most years, supplies of U.S. agricultural products have been sufficient to export to many foreign nations and still have a worrisome surplus. Soil and water resources are not without limit, however; they are finite and vulnerable to erosion and exploitation. Environmental impacts may vary, depending on physical and economic uses of soil and water resources; consequently, it is difficult to be specific in discussing the impacts of land use changes. Nevertheless, some of the issues can be reviewed.

Irrigated Lands

The 17 western coterminous states have some 49 million acres of irrigated land and account for over 85 percent of all the irrigated land in the United States. The environmental consequences of irrigating this land fall into two broad categories-water pollution and conservation of water and land resources.

Water pollution is a major concern in irrigated crop production because of the generally intensive use of fertilizers. Studies have shown that fertilizers and pesticides can be used very effectively with little or no negative environmental impact. Other studies, however, show that, under some conditions, the environment can be degraded. Nitrate leaching into groundwater supplies has been documented as well as the movement of nutrients and pesticides off the land with sediment. There is, nonetheless, reason to be optimistic; through the use of improved inputs and advanced management practices, environmental quality may be maintained or even enhanced. If the real costs of irrigation water, fertilizers, and pesticides continue to increase in relation to the value of the crops produced, farm operators will utilize inputs much more efficiently. Also, an increased awareness of potential hazards may lead to more careful use of inputs.

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Improved technologies are emerging in irrigated crop production. Of particular significance are irrigation scheduling programs that result in more efficient use of irrigation water. These can reduce leaching of nitrates and also reduce runoff and erosion. Reduced runoff, coupled with improved nutrient application methods, will also reduce losses of plant nutrients from irrigated fields. The use of lasers for more precise land leveling can also greatly improve water management under some conditions.

Nonirrigated Lands

There are about 155 million acres of nonirrigated cropland in the 17 western United States. A large part of this is in areas receiving less than 20 inches of average annual precipitation, where rainfall is often highly variable and sometimes intense. If irrigation becomes restricted either by limited supplies, uneconomic conditions, or by competition with other uses, expansion of dryland acres must increase. As nonirrigated cropland acreage increases, cropland quality will decrease because more and more marginal land will have to be utilized.

Currently, water and wind erosion soil losses average about 5 tons per acre in the United States. In some areas, such as portions of the Palouse Area in Washington, Oregon, and Idaho, the combination of steep slopes and seasonally intense rainfall have resulted in erosion rates of 50 to 100 tons annually. Erosion in excess of topsoil formation is the most critical concern. Even at lower rates of erosion, however, the environment can be negatively affected.

Wind erosion is a major problem for much of the nonirrigated cropland in the 17 western states and particularly in the Great Plains. In the Northern Plains (Kansas, Nebraska, North Dakota, and South Dakota) and Southern Plains (Oklahoma and Texas), annual sheet and rill erosion by water is about 3 tons per acre. Wind erosion amounts in Kansas, North Dakota, South Dakota, and Oklahoma are very similar to water erosion amounts. However, in Texas, wind erosion losses average 15 tons per acre, about five times greater than water erosion. Wind erosion is also high on Colorado and New Mexico croplands. If cropland acreage in these areas is expanded, erosion hazards will increase and improved management practices will be needed. Again, however, new technologies are emerging.

Conservation tillage is very effective in alleviating both wind and water erosion. Conservation tillage is defined as any tillage sequence which reduces soil or water loss compared to conventional tillage. Conservation tillage is synonymous with

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maximum or optimum retention of residues on the soil surface and the utilization of herbicides to control weeds where tillage is not or cannot be performed. In water deficient areas, conservation tillage generally also results in higher yields because of improved water conservation. Conservation tillage will result in increased usage of agricultural chemicals, particularly pesticides. Research and monitoring will be required to insure that the crop production systems developed do not impose a threat to the environment.

Sediment, which is clearly recognized as the most undesirable single pollutant, is significantly reduced by conservation tillage. The control of sediment will also, to a large degree, control nutrient and pesticide losses. Thus, conservation tillage offers real promise for enhancing the environment, improving crop yields, and reducing energy inputs. Conservation tillage has increased from about 30 million acres in 1972 to more than 100 million in 1982, but satisfactory cropping systems are still lacking in many areas. Among the 17 western states, the Northern Plains states led with 33 percent adoption of conservation tillage; Southern Plains states were lowest with only 6 percent. The Mountain and Pacific states were intermediate with 28 and 20 percent, respectively. The very low adoption rate in the Southern Plains states is disappointing because both wind and water erosion rates are high in that area and conservation tillage could significantly reduce these losses. Also, water is the main limiting factor in crop production, and conservation tillage can increase soil water storage. Present cropping systems do not lend themselves readily to conservation tillage systems, which is the primary reason for the lower adoption rate. The lack of suitable cropping systems for conservation tillage has been largely due to the limited availability of effective herbicides for the common crop sequences. Satisfactory systems and improved herbicides are now being developed, and there is reason to think that conservation tillage will be widely used in the future. The U.S. Department of Agriculture has projected that conservation tillage will be practiced on about 80 percent of the U.S. crop acreage by 2000. This should have very positive environmental impacts.^[4]

Reversion of Irrigated Land to Dryland

Irrigation water will become limited or nonexistent in some areas as groundwater supplies are depleted or become unprofitable to use, and as other sources are partially diverted to other uses. Recreation, energy, municipal, and industrial uses will become increasingly competitive for water supplies. Each of

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these uses has definite impacts on the environment. Consequently, it is important that environmental safeguards be provided.

Declining Groundwater Supplies

Overdraft of groundwater in specific areas, particularly in the western United States, is causing concern because of the impact it has on the future of irrigated agriculture. Examples of overdraft areas are the San Joaquin Valley of California, central Arizona, and the Ogallala Aquifer area of the High Plains. Depletion of groundwater is not the only factor causing reversion of irrigated land to dryland in these areas. The cost of energy for pumping groundwater has risen in recent years much faster than the value of crops produced, and has made irrigation unprofitable in some cases. For example, high pumping lifts and sharp increases in prices for natural gas resulted in a sudden drop in irrigated acreage in the Trans-Pecos areas of Texas.

Significant amounts of irrigated cropland in overdraft areas will revert to dryland in future years. Because of its large size and severity of overdraft, particularly in the southern part, the Ogallala Aquifer area has received considerable attention in recent years. Therefore, it seems appropriate to look specifically at this area as a case study. The detailed studies being made on the area may not only lead to more efficient use of the remaining water in the aquifer, but also lead to better utilization of other aquifers as well.

The Ogallala Aquifer Area

A huge underground layer of sand, gravel, and silt saturated with millions of acre-feet of water, the Ogallala Aquifer underlies some 115 million acres of land, largely in six High Plains states. Before World War II, land in the High Plains was primarily used for producing cattle and dryland crops. Irrigation began in the early 1900s, but did not begin to accelerate until the late 1930s. Following World War II, and particularly during the great drought of 1951-56, irrigated acreage expanded rapidly. The combination of a seemingly unlimited supply of excellent quality water, highly fertile soils, newly developed hybrid grain sorghum and other crops, and a favorable climate resulted in tremendous expansion of agricultural production and associated agribusiness. In a matter of a few years, acreage irrigated from the Ogallala Aquifer accounted for more than 25 percent of all irrigated land in the United States. As irrigation accelerated, however, it

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became apparent that the aquifer was being mined at a rate far in excess of the rate it was being replenished by the sparse snowmelt and rain.

The Ogallala Aquifer has in recent years become of great concern to the nation and world, but particularly to the people whose livelihood is directly affected. The United States Congress initiated the six-state High Plains Study in 1976 to assess the present and future status of the aquifer. Research results and recommendations from the study were to be reported to the Congress in July 1982.

As a part of the High Plains Study, projections through time were made regarding dryland and irrigated acres by crop, value of agricultural output, input costs, employment, and income for each of the six states under a number of alternative development strategies. The baseline analysis was designed to project, from the base year 1977 to 2020, possible changes in the pattern of irrigated and dryland production and water use, by state, under the general assumptions that no new purposeful public action would be initiated to restrict or otherwise regulate irrigation water use in the area. Therefore, the baseline reflects future changes in acreages if no new voluntary or regulatory water management schemes are implemented and if no new water sources are developed. However, interactions between crop yields, water use, improved technology, declining well yields and rising pumping costs, competing crops and cultural practices were considered in the analysis. Mapp (1981) summarized the findings of the analysis and discussed some of the more important of the many assumptions required to perform the study.^[5] Space does not allow full discussion of the assumptions, but we report a portion of the results here because of the important environmental implications of the projected changes.

Results from the High Plains Study

Data presented in Figure 15.1 for the High Plains region project a continued increase in irrigated acreage. There is a slight decrease between 1985 and 1990 which results from anticipated deregulation of natural gas prices. After 1990, however, increases in crop yields and real product prices outstrip further increases in energy prices, and irrigated acreage continues to expand. It is especially significant to note in Figure 15.1 that the amount of irrigation water pumped from the aquifer decreases markedly through the 1980s even though irrigated acreage is continuing to increase. After 1990, the water pumped

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[Full Size]

Figure 15.1
Projected Acres Irrigated and Acre-Feet Pumped
for the High Plains Ogallala Aquifer Area
Source: Adapted from H.P. Mapp, "The Six-State
Ogallala Aquifer Area Study: Baseline Results
for the Agricultural Sector," 1981.

increases somewhat in proportion to the increase in irrigated acreage. In 1977 about 1.5 acre-feet of irrigation water were pumped for each acre of land irrigated in the region; this is projected to decrease to 1.3 by 1985 and 1.2 by 1990, and then remain fairly constant. Water use will vary greatly between states, however, because of availability. For example, usage in Texas, where underground water supplies are becoming quite limited, is assumed to drop from 1.38 acre-feet per acre in 1977 to about 0.65 acre-feet per acre in 2020. This decreased usage in applied water for each acre of irrigated land is expected to result in marked changes in crops grown, irrigation application methods, and cultural practices.

Significant differences in water supply exist among the High Plains states that overlie the Ogallala Aquifer. The aquifer contains an estimated 21.8 billion acre-feet of water, which if evenly

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distributed would be about 190 acre-feet of water under each acre of land. Texas, Oklahoma, and New Mexico, however, contain approximately 30 percent of the aquifer area but only about 15 percent of the water, whereas Nebraska contains 36 percent of the aquifer area but 64 percent of the volume.

The baseline projections for the six states studied are shown in Figure 15.2. Nebraska is expected to continue to rapidly expand its irrigated acreage while other states show fairly sharp decreases, or remain constant. The projections for Nebraska also show that irrigated acreage will expand much more than dryland acreage will decrease. Consequently, large acreages of land presently used for purposes other than cropland will be brought under cultivation, much of it undoubtedly in sandy areas presently in grass. The large expansion of irrigated land in these areas, particularly on sandy soils, will present pollution potentials because of the marked increase in fertilizer and pesticide usage that will be associated with intensive crop production. Natural recharge of the aquifer is higher in this area than any other area in the region, and with added irrigation, the possibilities of leaching nutrients and salts into the aquifer will be greater. Good management systems which address pollution hazards will be needed.

Projections for Kansas and Texas show substantial decreases in irrigated acreage and corresponding increases in dryland acreage. The dryland acreage in Kansas is projected to increase even more than irrigated acreage will decline, which again indicates that total cropland acreage will have to come from somewhat marginal lands with perhaps higher than average erosion potential.

The data for Colorado and New Mexico (Figure 15.2), and Colorado in particular, suggest that irrigated acreage will decrease without an accompanying increase in dryland acreage. Therefore, much of the irrigated land in these areas is expected to go out of cultivation. In some areas within other states this will also happen; in many cases these will be sandy areas that were not in cropland until center-pivot sprinkler irrigation systems were installed. Much of this land will not be suitable for dryland farming, and unless special care is given, serious environmental consequences could be encountered. Wind erosion will be a major problem and revegetation of the areas will be very difficult, unless it is done before irrigation is stopped. A bill was introduced in the Nebraska legislature that would have required center-pivot irrigators to revegetate wind erosion-prone

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[Full Size]

Figure 15.2
Projected Acreage of Irrigated and Dryland Cropland
in Six States of the Ogallala Aquifer Area.
Source: Mapp, 1981.

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land before irrigation systems could be removed. Although it is unlikely a bill of such nature will be passed, its introduction recognized the potential environmental hazard of irrigated lands reverting to dryland.

In areas where cropland was primarily dryland-farmed prior to the time it was irrigated, the land can generally be returned to its former use without serious environmental impacts. The production from dryland areas will be extremely variable, ranging from fairly high yields in above average rainfall years to very low yields or even crop failures in drought years. There is very little likelihood, however, that widespread dust storms such as those that occurred during the "Dirty Thirties" will reoccur. For example, recently improved cropping methods and cultural practices result in more efficient storage of soil water during fallow periods. Large farming equipment developments allow more timely and effective cultivation. Better crop varieties are less prone to complete failure. Other technologies are also emerging that, when coupled together into integrated farming systems, are very effective in controlling erosion. This is not to say that there will not be localized areas where environmental hazards are acute, but the region as a whole is not expected to be seriously damaged.

The conversion of irrigated land to dryland in the High Plains states will result from either a declining supply of water, the inability to realize enough profit from irrigated farming to pay for the associated energy costs, or a combination of the two. If water availability is the primary constraint, the conversion of irrigated land to dryland will be gradual and will generally move from fully-irrigated to limited-irrigated to dryland. Limited irrigation will involve only one or two irrigations, or perhaps only preplant irrigations during the winter to reduce evaporation losses. This orderly conversion to dryland presents little environmental hazard.

The most serious environmental threat would result from a situation in which energy costs, or some other economic condition, causes a sudden abandonment of large areas of irrigated land. The most environmentally-critical areas, as already mentioned, would probably be sandy areas presently irrigated with center-pivot systems. These lands were broken out of native range due to economic incentives and generally have low dryland production potential. Unless some orderly plan is developed to revegetate these lands with permanent cover, serious environmental hazards will result. The most serious hazard, of course,

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would be wind erosion. Figure 15.3 shows the principal soils overlying the Ogallala Aquifer. The sandy soils that present the greatest environmental hazard are illustrated by crosshatched areas. The double crosshatched soil areas represent the most severe environmental hazard potential. Irrigated acreage has expanded substantially in some sandy areas in recent years. It is evident that if irrigated acreage expands further, as projected in the High Plains Study (Figure 15.2), much of the increase will likely occur on soils having a severe environmental hazard potential.

Similar problems occurred during the 1930s when many farmers abandoned sandyland farms near Dalhart, Texas. To alleviate the vast erosion from the area, the federal government bought the farms and charged the USDA Soil Conservation Service with the task of revegetating the land. These lands now are part of the National Grasslands managed by the U.S. Forest Service. Similar projects occurred in other parts of the Great Plains.

The discussion above points out some of the complexities of the High Plains region. It is clear that there will be a gradual decrease in irrigated acres for all states in the region except for Nebraska, where the water-to-land ratio is high. The decline in acres irrigated will likely be much slower than the actual decline in acre-feet pumped from the aquifer. Improved irrigation techniques and equipment are being developed which allow more efficient use and distribution of irrigation water. Also, cropping systems are being developed that emphasize utilizing limited amounts of irrigation water; fully irrigated systems of the past were designed for maximum yields rather than efficient use of water. The primary benefit of limited irrigation in this region is that it allows for much more efficient use of the natural precipitation. The average amount of irrigation water pumped for each acre of irrigated land in the region is about 20 inches. The addition of just 8 inches of irrigation water to the natural precipitation of the region could have a very beneficial effect on crop yields and would help stabilize production and reduce risks.

Groundwater pumped from other major aquifers in the western United States will also likely decrease in future years as a result of overdraft or uneconomic conditions. Unlike the High Plains region, much of the irrigated land in other areas of the western United States is in arid areas. In general, 14 inches or more of annual rainfall are required to sustain dryland agriculture. However, water harvesting technologies and more drought tolerant crop varieties are emerging that may extend dryland crop production in areas previously considered too dry.

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[Full Size]

Figure 15.3
Principal Soils Overlying the High Plains Ogallala Aquifer
Areas of sandy loam and loam soils are cross-hatched, and sandy soils are
double cross-hatched. Soils in other areas are primarily loams and clay loams.
Source: Fred Pringle and Gerald Ledyard, USDA Soil Conservation Service.

Loss of Irrigation Water to Domestic and Commercial Uses

Although domestic and commercial use of water represents only a small percentage of total withdrawals and consumption, these uses have a high priority which makes resource management critical. In 1975, these uses accounted for 8.5 percent of total fresh-water withdrawals and 6.9 percent of consumption. In contrast, irrigation accounted for 47 percent of withdrawals and 81 percent of consumption. By the year 2000, domestic and commercial uses are expected to increase by about 30 percent-and by as much as 50 percent or more in some of the western regions. Much of this increase will come from water presently used for irrigation, and the transfer of this water will likely result in decreased acreage of irrigated land. This is particularly true when groundwater rights are sold for domestic uses. In areas where dryland agriculture is not feasible, the diversion of water should be accompanied by revegetation of the land.

In areas where increased use of domestic and commercial water is diverted from rivers or sources other than groundwater supplies, there will not necessarily be a decline in irrigated acreage. Developing technologies are making agriculture more water-efficient, and some diversion to other uses can be made without seriously affecting the acreage of irrigated land.

Loss of Irrigation Water for Mining Fuels

Minerals production or mining has relatively minor water needs compared to irrigation. The National Water Assessment (1978) stated that the mineral industry accounted for only 2 percent of fresh water withdrawals in 1975, and projected that this would increase only to 3 percent in 2000. However, because quantities and qualities of minerals vary by regions, water demands vary accordingly. Even in the western regions where minerals are abundant and water supplies are short, the National Water Assessment does not project water needs for mining to represent a substantial portion of total water consumption. The 1975 and projected 2000 withdrawals of fresh water for fuels production, as compared to irrigation, are shown in Table 15.1. These data illustrate that the projected requirements for water for mining fuels are relatively small in relation to irrigation, and even though water demands for mining fuels will increase dramatically on a percentage basis in some regions, irrigated acreage will not be greatly reduced. Localized impacts, however, may be severe, because in most cases the increased water for mining will have to be taken from agriculture. The diversion

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will have political, social, and environmental impacts. In most western states, the diversion of irrigation water will result in a loss of cropland because rainfall in these areas is too low to sustain dryland crop production. Consequently, the lands taken from production should be revegetated to ensure that environmental hazards are minimized.

Conversion of Lands to Expand Agriculture

In 1977 there were nearly one billion acres of nonfederal rural land not used for cropland in the United States. Of this total, 127 million acres have high or medium potential for cropland.^[6] Consequently, there is ample land available for expanding our cropland base. Converting this land to cropland would result in both losses and gains. Wind and water erosion problems could be substantial, and special care would be necessary. If large acreages of rangeland and forest land were converted to cropland, this would reduce production of forage and wood products. Loss of forest and rangelands would also affect water runoff and streamflows in some areas. If wetlands were also drained and converted to cropland, wildlife habitat would be changed. The conversion of these lands to cropland could, however, significantly increase the nation's ability to produce food and fiber for use at home and for export.

The rate of conversion and the extent of environmental impact are difficult to assess. Technologies are presently available and others are emerging which could expand agricultural production even while maintaining or enhancing the environment. Adoption of these technologies, however, is not sufficient; analysis of the political, social, and economic factors associated with the adoption of these technologies is also needed.

Impacts of Land Use Changes on Other Resources

Fish and Wildlife

Fish and wildlife are extremely sensitive to environmental change. Land use changes nearly always affect them, as a result of one or more of the following-stream temperature, amount of runoff, draining of wetlands, clearing of forests, cultivation of rangelands, and sedimentation. Land use changes are imperative, however, if the anticipated needs for food and fiber are to be met.

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Declining water supplies and rising costs associated with irrigation will have pronounced effects on the use of water, the most significant of which will be the reduced quantity of water applied per acre for irrigation. Water conservation and irrigation efficiences will have direct effects on environmental, social, and economic conditions as changes in streamflow and quality occur.

Although change in land use is inevitable, it is important to realize that change sometimes enhances the environment. A well managed farm is an ideal habitat for many kinds of wildlife. By 2000, conservation tillage will be utilized on about 80 percent of the cropland, and this will greatly increase cover for wildlife. In the Texas High Plains, dramatic increases in the populations of dove and pheasants have already been noted with the increased use of conservation tillage systems.

Responsible agencies should monitor the effects of agricultural activities on fish and wildlife resources closely; at the same time, they should try to dispel the beliefs of many who assume that only negative impacts occur.

Natural, Historic, and Wilderness Areas

Natural, historic, and wilderness areas require water of ample quantity and quality, or the esthetic values of these areas will suffer. Although the amount of the nation's water resources that is consumed by such uses is minute with respect to the total, it is appropriate that some areas be preserved. While all groups generally agree with this principle, they can seldom agree on the specifics. Though only relatively small quantities of water are at stake, particular locations will be crucially affected. Natural areas are particularly sensitive to irrigation projects. Considerable interest in recent years has pertained to wetlands, as vast acreages have been drained to expand cropland areas.

Society will have to decide the proper balance between national economic development and historic and cultural values. As the pressure on our natural resources becomes greater, water and land resource assessment and planning will take on an ever increasing importance.

Summary and Conclusions

Irrigated acreage is expected to continue to expand, but at a much slower rate than during the past few decades. Acreage will decrease in some regions because of overdraft of groundwater, uneconomic conditions, and loss of water supplies to other uses.

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As water supplies decline and the costs of applying the water increase, technologies will emerge to increase conservation, which may provide water for alternative purposes such as fuel production. Even with improved conservation, however, streamflows in the semiarid West are likely to continue to decrease. The relationship between quantity and quality of water is clear; water quality problems become more acute with reduced streamflows, and this affects fish and wildlife maintenance as well as recreational activities. All impacts, however, need not be negative. Improved water technologies will also allow better control of fertilizers and pesticides, and lesser amounts of these reaching surface or groundwater supplies. Conservation tillage systems result in substantially more plant residue remaining on the surface, and this encourages some forms of wildlife by providing better habitat.

Marked changes in irrigation practices and land use will have environmental impacts. While it is impossible to foresee perfectly, we can see trends and make some projections about the implications of certain developments. Careful assessment at this time should help us to better utilize our natural resources in the future.

Discussion:
Thomas L. Kimball

Stewart and Harman have presented a good discussion of the impact of agricultural activities on the environment. I would like to add some further comments. Water manipulation has some serious adverse impacts on the environment. Dams, diversions from streams, and a lowered water table from overpumping are cases in point. Increasing series of dams and impoundments has greatly impaired and in some cases destroyed the anadromous fish runs along both coasts. Hatcheries have had to replace much of the natural spawning lost, but most of the hatchery production is near the coast which is no help to the production lost in stream courses inland.

The diversion of smaller streams has a disastrous effect on the aquatic ecosystem. The problem is further exacerbated by the fact that greater demands for water usually come when streamflows are at the lowest ebb. The fisheries values in the Blue River of Colorado will be greatly impaired unless minimum streamflows can be guaranteed below the Dillon diversion when most of the water is diverted across the Continental Divide to Denver. In the Central Utah Project there will be seven small trout streams in the high Uinta Mountains whose water flow will be completely diverted to serve the agricultural interests of central Utah, with no mitigation for the loss of the fisheries resource.

The lowering of water tables by overpumping underground reservoirs can have a serious adverse effect on wildlife. The mesquite bosques of the lower Santa Cruz River in Arizona were destroyed by a lowered water table. These large trees served as the principal nesting area of the white-winged dove, and their destruction brought about a marked decline in dove numbers.

Irrigation canals, particularly those lined with concrete, pose some serious problems. Unless they are fenced, many of the terrestrial forms of wildlife may drown; wide canals often interfere with the migrations of many of the ungulates. Fencing and natural looking bridges can solve most of these difficulties.

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World food production is projected to increase 90 percent over the thirty years from 1970 to 2000. An additional 140 million acres of land would be required for the production of principal crops. Stewart and Harman conclude that such a shift in land use will impact the environment, but not all those impacts will be negative. Negative environmental impact, however, is difficult if not impossible to define-the definition is, like beauty, in the eye of the beholder. For example, if we view environmental quality as maintaining the integrity of our natural ecosystems, then it follows that whenever we alter those systems a negative impact occurs. On the other hand, if we define maintaining environmental quality as mitigation where possible, or the substitution of a modified ecosystem that produces benefits that are acceptable to landowners, the public, and public policy makers, then we can say that many impacts are not negative. We could have fifty million buffalo again in the United States, but we would have to take out the fences in the midsection of the country, restore the prairie, and eliminate the competition from domestic livestock for the grass. The transformation of the prairie into farmland also extirpated the grouse and prairie chicken. The grain farm ecosystem, however, created a suitable environment for the Chinese ring-necked pheasant, and for some this has been an acceptable substitute for the indigenous species lost. Nevertheless, all is not well for the ring-necked pheasant. Monoculture, clean farming, and the use of chemicals, pesticides, herbicides, and fertilizers have increased crop yields but taken away winter and nesting cover to the detriment of the birds.

The problem is that generally we have single use concepts of land and water management. What is really needed is to develop multiple use objectives for every land and water project. We should encourage every private landowner to consider the many values and objectives that are inherent in land and water management, and provide him with as much information as is available to make intelligent decisions. Multiple use objectives should be required on all major projects where public tax money is utilized. Although there are many laws designed to accomplish this purpose, many of our public servants have to be pushed into efforts to achieve that objective.

Water pollution is a much greater problem than recognized by Stewart and Harman. While great strides have been made in cleaning up our nation's water supply from known sources of pollution, nonpoint sources continue to be a real and increasing threat. Pesticides and residue nutrients continue to play havoc

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with aquatic ecosystems. One of the consequences of the tremendous quantity of added nutrients is the accelerated eutrophication of our lakes. Lake Okeechobee in Florida, one of the nation's largest fresh water lakes, is rapidly losing its premium water quality by pesticide and fertilizer runoff and pumpback from agricultural lands irrigated from the lake.

Salt water intrusions into fresh water aquifers and estuaries is also a major problem. The quality of water in the brackish water zones in our estuaries is becoming more difficult to maintain. These waters are critical to the well-being of many pelagic fishes and, biologically speaking, are the most valuable and productive. Diversion of the principal flow of large rivers, such as the Sacramento, could allow salt water intrusions that could impair the entire Delta and San Francisco Bay ecosystems.

Waste of irrigation water is one of the most critical environmental problems of proper water and agricultural management. The competition for available water grows daily in the semiarid western states. While food production will always enjoy a high priority in water use, that priority should not extend beyond the actual amounts of water necessary to grow crops to maturity under the best available technology. Western water law is based upon beneficial use of water; waste can never be construed as a beneficial use. The time will come when water right owners will lose water that is wasted.

The authors project that nonirrigated farmland will increase substantially in the future as underground supplies are depleted and the need for food increases. Let us hope to avoid the mistakes of the "Dirty Thirties." Those lands whose soil texture is subject to severe wind erosion, particularly national grasslands, should be purchased by the federal government to protect them from serious and continuing erosion under cultivation. Those lands should never be put to the plow unless proven technologies demonstrate adequate wind erosion protection.

In the minds of most naturalists, variety and abundance of wildlife is the litmus paper of environmental quality. It is true that changes in habitat are not always negative to all species of wildlife, but such changes will adversely affect some or many species. Many of our wildlife species are adaptable to environmental change. For example, the ubiquitous coyote is now as much at home in the garbage cans of Los Angeles as he is in the Sierra wilderness. On the other hand, the prairie chicken is usually extirpated from areas where the strutting grounds are plowed and planted with crops. The mountain lion and grizzly

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bear are true wilderness animals; when humans move in, they move out.

Once priorities of land and water use are determined, the solution to many environmental difficulties is to collect enough knowledge and information about the established objectives to minimize adverse impacts and maximize the enhancement of environmental quality. Such effort will preserve adequate habitat for variety and adequate numbers of wildlife. In order to minimize adverse environmental impacts created by a diminishing water supply, the following suggestions and recommendations are made.

1) Devise a program to eliminate water waste in irrigated agriculture. If such a program could be developed and successfully executed, nothing could provide more benefits to all interests.

2) Develop multiple use objectives on all land and water development projects. When concern is shown for the many and varied interests in land and water management, there may be increasing support for the project.

3) Take a close look at impacts on fish and wildlife resources. These are indicators of environmental quality.

4) Include economic and social factors in long range planning, because these will probably have greater impact on the future of agriculture in America than any other. With two-thirds of the world hungry today, the United States still cannot sell its bumper crops of grain for an amount sufficient to cover the cost of production. Even if the grain could be sold at a profit, the means of transporting foodstuffs to those who need it most is completely antiquated and inadequate.

5) Develop a program to preserve the "Class I" farmlands in the United States. Robert Frost once said, "What makes a great nation in the beginning is a good chunk of real estate." In the United States we have a great chunk of real estate. Whether we remain a great nation will depend upon how wisely we develop and use it. The most dramatic success story in the United States is our agricultural production. We can stay a super power only insofar as

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we maintain that agricultural success. The world cannot march ahead on an empty stomach.

6) The United States Department of Agriculture should review its priorities, and do so frequently in the future. The Soil Conservation Service was created to protect our nation's farmland from soil and water erosion. Now we should enlarge and expand research and extension efforts to achieve better land and water management. Technologies must be developed and brought to the landowner and applied on the land.

7) Agricultural as well as all other special interests should wean themselves from the public treasury. The nation's current economic condition is due in part to all segments of society running to the taxpayer for help. Government can no longer afford to expend more money than it takes in. Water projects and programs must bear their true costs-those who benefit must pay. Such a principle applied to all interests subsidized by the taxpayer would go a long way towards solving our nation's current economic ills as well as its environmental problems.

Discussion:
George H. Wallen

Stewart and Harman do a good job in discussing how reductions of irrigated agriculture will likely result in the use of more marginal lands for production. Intensive farming practices, where chemicals are used to enhance production and all available space is tilled, limit environmental amenities, whether or not the fields are irrigated.

Such generalizations are useful from a theoretical viewpoint. However, more specific information on the relationships between irrigated agriculture and environmental quality is necessary if irrigation farmers and project managers are to maintain desirable environmental amenities.

The addition or withdrawal of water may have significantly different environmental impacts in different parts of the country. Effects on fish and wildlife illustrate the point that environmental values vary with farming practices and with regional climatic conditions.

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Fish and wildlife and other environmental resources are significantly affected when irrigation systems are installed and operated on lands previously dryfarmed or idle. The species composition and populations of wild animals and native plant species change significantly. Native species are not always lost; however, their numbers may be greatly depressed, while species that can adapt to the new water regime and cropping pattern may expand. For example, in the Texas Panhandle, species such as prairie chicken, prairie dog, and antelope decline with more intensive farming and improved water delivery. On the other hand, populations of pheasant, whitetailed deer, and waterfowl increase in response to the increase in available food and the additional permanent water areas provided to store and deliver irrigation water to the fields.

In some parts of the country, the principal effect on wildlife resources from the installation of irrigation facilities may be the drying out of wetlands so that crops can be produced with the regulated application of the irrigation water. This type of change augurs against wetland-dependent species in favor of upland varieties. In these areas it is the drainage rather than water delivery facilities that has the most significant effect.

Irrigation projects may also be attractive recreation areas. Data for reclamation projects show that, in 1980, approximately 67 million visitor-days were spent at the almost 6 million acres of land and water available for recreation at 214 operating reclamation projects or units. Sightseeing was reported to be the most popular activity, followed by fishing and camping. Most of the use was at multipurpose projects, where water is stored for power production, flood control, and municipal water supply in addition to irrigation. However, visitor use of smaller irrigation reservoirs and conveyance facilities was also substantial.

When water that has been available for irrigation is reduced or diverted to other uses, a change in environmental quality occurs that is just as dramatic as the first application of the irrigation system. In most of the West, the most common reason for halting irrigation in any given area is the expansion of urban growth. In those instances, fields become roads, parking lots, buildings, and lawns. Water formerly used in agriculture is used for municipal and industrial purposes.

Irrigated fields are seldom abandoned because of lack of water. The more likely scenario has been reversion to nonirrigation, or the temporary return to dryland crops until new arrangements were made for water. In these cases, the environmental attributes of an area change little.

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Under unusual circumstances, fields may be left idle or abandoned with the loss of irrigation water. Such lands return to natural conditions with a dominance of native vegetation at a rate that can be correlated to the amount of natural precipitation available. In the central Washington area, where the Columbia Basin Project is located, fields return to natural conditions after three to five years. In the much dryer central part of Arizona, perennial plants such as greasewood may be established in wetter areas after 8 to 10 years, but many native species never return to former densities.

The speed with which lands formerly irrigated return to desirable quality is affected by the measures taken by land managers, whether private landowners or public agencies. Fish and game species can be encouraged to return to formerly irrigated areas by proper food and cover plantings and by the provision of suitable watering areas. Careful use of pesticides and fertilizers also may encourage reestablishment of desirable plant and animal species. An abandoned field that is surrounded by cropland may provide an island of cover and sanctuary for many wildlife species. Abandoned ditches and canals may also provide desirable food and cover if properly managed. Native species may be encouraged if that is a desirable goal. As irrigation facilities are reduced, public use of such facilities will also decline unless positive steps are taken to manage the areas to provide desirable recreation resources.

If one holds a more utilitarian view, it is easy to rationalize that most of the changes caused by irrigation are highly valued by people living in the last 20 years of the 20th century. For the most part, environmental amenities have been piggybacked either by accident or design onto existing projects. Obvious examples are permanent wetlands in desert climates, high quality recreation lakes resulting from overdesign of supply facilities, and vegetation at the edge of fields that results from overapplication of water. If water becomes limited, however, these amenities may be hard to keep.