Duration: 10/01/2004 to 09/30/2009

Administrative Advisor(s):

NIFA Reps:

Non-Technical Summary

Statement of Issues and Justification

Recent years have witnessed major changes in the technology, economics, and institutions that have a significant bearing on the ownership, allocation, and management of water in irrigated agriculture in the western United States. The resulting issues, the core of this research proposal, have had a particularly pronounced impact on the inter-sector mobilization of water.

On the technological front, secondary salinization or salt accumulation from evaporating irrigation and shallow ground water has begun to assume alarming proportions. Because a vast majority of this irrigated land is located in the arid and semi-arid west, soil salinity issues have risen as critically important concerns associated with water-management policies of the western U.S. Specifically, as western water resources are reallocated, a widely recognized need exists for more rapid field/basin-scale salinity impact assessments.

On the economics front, two major issues that impact on the effective and efficient allocation of water among multiple uses and users have emerged to the forefront of the policy debate. First, a growing body of evidence indicates that water conservation acquired through traditional cost-share conservation programs such as those implemented by USDA, 74% of whose participants are small farms, will likely be insufficient to meet the needs of growing non-agricultural water demands, particularly for environmental purposes. Note that in this connection, nearly 81% of irrigated farms in the 17 western states are small farms, while large farms (farms with $250,000 or more in total farm sales) apply 66% of agricultural water. Clearly, the studies suggest that farm-size characteristics, economics, and institutions are central to the design of more effective federal and state water conservation policy. While traditional cost-share conservation policy likely contributes significantly to small farm policy goals, integrated conservation/institutional policy may have an even larger conservation/reallocation impact and provide for a more effective balance between small farm and environmental policy goals. Second, the historic method of reducing agricultural production risks through subsidized federal crop insurance (e.g. crop insurance and non-insured crop assistance provided by USDA) does not cover water shortfalls in irrigated agriculture. Even if federal crop insurance were extended to cover water-supply restrictions, it is an open question whether such a program could effectively mitigate the risks of reduced water supplies, because several concerns arise related to the feasibility, effectiveness, and participation level within such a program.

On the institutional front, there is widespread dissatisfaction with respect to the efficacy and effectiveness of the prevailing water allocation laws, institutions, and procedures to efficiently, equitably, and sustainably allocate water among the newly emerging water uses and users in the western U.S. Alternative institutional arrangements will need to account for the changing inter-sector values of water, while also satisfying public equity requirements.

The technological, economic, and institutional issues identified above have not been addressed in a comprehensive and systematic fashion, and in conjunction, in any previous regional research on western irrigated agriculture. It is well established that there are many complex interactions among technological, economic, and institutional factors, which have a decisive impact on inter-sector water mobilization. Therefore, a careful scrutiny of these issues becomes compelling. Our proposal is a first attempt to examine and analyze these key issues as a basis for developing effective and efficient policy for inter-sector water transfer in the western U.S.

The need for undertaking the proposed research becomes self-evident when we look at the myriad of stakeholders who stand to benefit from the resulting findings. These stakeholders include agricultural producers, irrigation and conservation districts, private water-supply organizations, state environmental/water quality management programs, federal agencies such as the Bureau of Reclamation, Army Corps of Engineers, USDA (NRCS and CSREES) and EPA, among others. The findings from the proposed research are expected to have a profound impact on these multiple stakeholders intimately involved in water allocation, planning and management decisions that affect western U.S. irrigated agriculture.

The proposed research has a high degree of technical feasibility. The research team consists of a multi-disciplinary group of water professionals with rigorous training in the conceptual-theoretical aspects of water economics and technology, as well as hands-on experience in policy analysis. The disciplines represented on the team include agricultural and natural resource economics, irrigation engineering, and agronomy and soil sciences, among others. Virtually all researchers have worked on collaborative, interdisciplinary projects. Researchers from 14 states are represented on the project. In addition, researchers from ERS and ARS of USDA, and the Bureau of Reclamation are involved in the proposed research.

The proposed research is ideally suited to be conducted as a multi-state regional project because of the commonality of the issues to be studied across the participating states. For instance, secondary salinization from evaporating irrigation is becoming increasingly common among the western states. Similarly, integration of water conservation with institutional changes, and knowledge of agricultural production risks associated with policy-induced water restrictions are rapidly emerging as issues of major concern to irrigated agriculture in practically all western states. Likewise, concerns about the efficacy and adequacy of current water laws, institutions and procedures in addressing the changing and challenging water needs of irrigated agriculture, and the need for efficient and equitable inter-sector mobilization of water are shared by most every state in the region. Thus, all three objectives of the proposed research address issues of common concern and as a result, the proposed research clearly meets the criteria for regional research.

From a project perspective, the likely impacts from the successful completion of the proposed research include:

1. Develop a system for the rapid monitoring and assessment of farm and basin-scale soil and water salinity impacts associated with policy-induced water management practices, water transfer agreements, and interstate river-compact decisions.
2. Provide critical conservation and economic information, across farm-size groups, needed to more effectively balance conservation needs between small farm and environmental policy goals.
3. Provide information on the potential agricultural risks and income losses associated with irrigation water shortfalls due to Federal and State policy decisions, as well as the impact of potential mitigation strategies.
4. Establish a solid body of systematic information on the actual performance of current laws, institutions, and procedures in meeting existing and emerging water demands, and the likelihood of institutional modifications to improve inter-sector water mobilization across the western U.S.

Because of these anticipated benefits, the proposed research is of crucial importance to effective water policy formulation and implementation across the western U.S.

Related, Current and Previous Work

The W-190 regional project, entitled Agricultural Water Management Technologies, Institutions, and Policies Affecting Economic Viability and Environmental Quality, was funded for the period October 1, 1999 September 30, 2004. Its purpose was to identify, examine, and evaluate the impacts of numerous challenges facing irrigated agriculture, help develop viable mechanisms to effectively address them, and thus contribute toward informed water policy formulation. The scientists participating in W-190 laid out three objectives for their project. The objectives and their corresponding activities for the first four years of the project are briefly reviewed below. The project s accomplishments and impacts are then evaluated and the areas needing further investigation are briefly discussed.

Objective 1: Evaluate the farm-level economic and environmental implications of alternative resource-conserving irrigation technology and water management systems. W-190 scientists have conducted experiments and analyses to test several farm-level technologies at various locations. Research in Texas, Colorado, Kansas, and Nebraska has evaluated a wide array of technologies and practices including conservation tillage, alternative row spacing, variable-rate application of fertilizers, sub-surface drip irrigation, and soil salinization monitoring systems. Many of these technologies were found to be economically viable while protecting natural resources.

Objective 2: Apply alternative methodologies to evaluate economic, environmental and social impacts of potential technology, policy, and institutional changes affecting water resources for irrigated agriculture. Various subsets of W-190 members have collaborated to assess the impacts of policy alternatives in several multi-state water conflicts. Researchers from Washington and Idaho worked jointly on an integrated model to assess the water policy options affecting fish habitat, hydrology, and irrigated agriculture in the Snake River Basin. Texas A&M University and the Water Resource Institute in New Mexico cooperated to address water scarcity issues related to the Rio Grande. Oregon State University and the University of California-Berkeley examined the resource, economic, and endangered species issues associated with the Klamath River Basin water conflict.

Objective 3: Evaluate alternative institutions and policies for resolving competing agricultural and environmental water demands. Members of W-190 have studied several institutional arrangements for resolving water conflicts within and between states. Researchers in Arizona, Washington, Idaho, Colorado, New Mexico, Nebraska, and Hawaii have examined and compared bargaining, water markets, and judicial re-allocations as alternative means of allocating water. The dominant legal doctrine governing water use in the west, that of prior appropriation, was critiqued and compared to alternatives such as the public trust doctrine.

The activities carried out have made substantial progress, as planned, toward meeting each of the three objectives. More detailed reviews of the project activities can be found in the annual progress reports, available at http://www.lgu.umd.edu/project/pub.cfm?trackID=299. The project scientists have generated a large amount of new knowledge on water issues that is highly regarded by the peers of their disciplines. Since the beginning of the project period through 2003, W-190 research accomplishments have included 181 professional outputs, including 54 journal articles, 4 book chapters, 44 manuscripts and technical reports, 6 graduate dissertations/theses, 8 conference proceedings, 62 professional presentations, and 3 published abstracts (itemized in Attachment 4). The scholarly contributions of the project were highlighted in two special issues of the International Journal of Water Resources Development (published in June 2000 and March 2003), both of which were entirely devoted to the research results of W-190 scientists. A leading interdisciplinary journal in the water resources field, the 14 original research papers published in the IJWRD have provided a singular opportunity to showcase the W-190 s research to an international audience and thus enhance its global appeal and impact (see Attachments 1 and 2).

Although rigorous research outputs are essential, they are not alone sufficient for the project to have made positive impacts. Such impacts are unusually difficult to quantify for a policy-oriented project such as W-190, because the positive impacts would encompass the social gains from scientifically grounded policy decisions. While it is exceedingly difficult to quantify the benefits from scientific input into the policy process, it is still possible to evaluate whether positive impacts have occurred. In order to positively impact policy decisions, scientists must succeed in: (a) disseminating the new knowledge to stakeholders and policy decision-makers, and (b) delivering knowledge that is relevant and valued so that it ultimately affects decision-makers choices. The members of W-190 have devoted considerable effort to both (a) and (b), and there is much evidence that their efforts have been successful.

Dissemination of knowledge has occurred through many outreach and education activities. One highly visible example was the Workshop on Water and Agriculture in the American West. This one-day workshop was held in Washington, D.C. on June 21, 2001 and was hosted by the USDA Economists Group and Soil and Water Conservation Society (see Attachment 3). The presentations were given exclusively by members of W-190 on a wide range of water policy topics, including incentive programs for water conservation, the prior appropriation doctrine in water law, and applications of game theory to resolve water conflicts. The workshop attracted over 50 participants from federal agencies, Congressional committees, private interests, and White House staff. Other interactions with clientele groups have occurred at annual meetings through invited presentations and field visits; the 2000 annual meeting in Phoenix was held to coincide with the National Irrigation Symposium. W-190 members have also individually organized numerous outreach activities targeting stakeholders in their respective states.

Not only has knowledge from W-190 been delivered to the appropriate audience, but it has also been valued and relied upon in recent policy and judicial decisions. Indeed, an important indication of W-190s ultimate impact on policy is the extent to which the advice of its members is sought in key decisions and debates. Over the past four years, W-190 scientists have been called as expert witnesses in several legal suits over water conflicts, including the Kansas v. Colorado Supreme Court case (Attachment 5). They have also served on scientific advisory committees to investigate particular conflicts, such as the National Research Council Committee on the Status of Endangered Fishes in the Klamath Basin. In addition, their comments on water policy issues have appeared in nationally and international media outlets such as The Economist and on National Public Radio.

In sum, the members of W-190 have made significant progress toward the objectives in the project. At the same time, there remain many important questions about water allocation that require further investigation. These questions have emerged as new frontiers revealed by the work over the past four years, and they also reflect the recent evolution of policy and economic conditions. For instance, recent disputes involving agricultural water has prompted renewed interest among policy makers regarding the effects of increasing water scarcity on irrigators. This question is one of the proposed research priorities for the new project.

A CRIS search was conducted to identify active multistate projects related to the proposed work. The search identified 8 multistate projects that would complement, but not duplicate, the activities we propose. Indeed, our activities would be unique because no other project focuses on water allocation issues. The related projects are briefly reviewed below and their potential synergies with our project are also discussed. Some of these projects consider issues linked to water scarcity (such as land use), while others are likely to employ similar analytical methods even though they address different issues.

The only other project focusing on irrigation is W-128: Microirrigation Technologies for Protection of Natural Resources and Optimum Production. This project investigates a specific type of delivery system for irrigation water, including its design, management, and adoption. It is therefore narrower in scope than the proposed work. Nevertheless, the outputs of W-128 would be applicable and relevant for many of our activities, most notably in evaluating the incentives to adopt new water conserving technologies. Many of the scientists in our project are also members of W-128, so channels to exchange information and results already exist and are expected to continue.

Several projects consider agriculture s impact on water resources but focus on water quality instead of water scarcity. These include W-82, Reducing the Potential for Environmental Contamination by Pesticides and other Organic Chemicals; W-188, Characterization of Flow and Transport Processes in Soils at Different Scales; NC-230, Integrating Biophysical Functions of Riparian Systems with Management Practices and Policies; and S-1004, Development and Evaluation of TMDL Planning and Assessment Tools and Processes. These projects investigate the processes controlling the movement of contaminants in the environment, and also evaluate the cost-effectiveness, adoption, and environmental impacts of alternative management practices. W-82 is also concerned with data collection and management at different scales; one of their objectives is to integrate chemical and biological process information for use in models applicable across different spatial and temporal scales. Some of the modeling techniques in these efforts will overlap with our project, particularly concerning the adoption and benefits/costs of various practices. In addition, the databases and data management questions will have many commonalities. We will investigate the potential for coordination with these projects to share data and/or modeling methods.

Several projects consider water issues only indirectly or not at all, but would still complement our proposed work for other reasons. The first of these is W-1133, Benefits and Costs of Natural Resource Policies Affecting Public and Private Lands. This effort is concerned with estimating the economic values of various environmental resources, including the recreation value of water bodies. Such values will be applicable for our purposes because they should be compared to the estimated value of water in agricultural uses. Some of the participants in our project also have an interest in valuation techniques and regularly interact with the members of W-1133 in other settings. More formal interaction with this project, perhaps via a joint or overlapping annual meeting, may be desirable.

Another project is concerned with policy issues surrounding public lands in the western states, W-192, Rural Communities and Public Lands in the West: Impacts and Alternatives. Here, the commonality with our project exists because many of the economic modeling methods will overlap even though the issue of interest differs. One of the stated objectives of W-192 is to continue to develop and refine economic models and methodologies in Western states to analyze public land issues. Another complementarity may exist because W-192 also seeks to identify the constraints to policy alternatives mandated under existing and proposed federal legislation and policy. Accomplishing this objective will require the W-192 members to inventory state and federal land laws, not unlike the effort we propose for water laws (output 4). As with W-1133, opportunities to interact with this group will be explored.

Methodological synergies also exist with NC-221, Financing Agriculture and Rural America: Issues of Policy, Structure, and Technical Change. Although its focus is on financial issues rather than water scarcity, the research in this project will have many commonalities with ours. One of their objectives is to model the effects of policies on agriculture, which will involve procedures similar to those in producing our outputs 2 and 3. Another objective of NC-221 is to evaluate structural change; i.e., the shifting distribution of farm sizes. This is directly related to our output 2, which deals with the effects of farm size on water conservation. Like W-1133 and W-192, the members of NC-221 already interact with members of our project in other settings, but additional cooperation will be investigated as appropriate.

Objectives

1. Develop and evaluate alternative technologies to monitor environmental effects of water allocation and management
   
2. Quantify comparative economic values of water in alternative uses
   
3. Assess the effectiveness of alternative management institutions, laws, and policies for water allocation
   

Methods

Research for this project is designed around four products, with each product contributing to one or more of the project s objectives (1 3) listed above. Research methods will vary by product. The following discussion identifies, by product, contributions to project objectives and the research methods used to address these objectives. Methods for Product 1: Soil Salinity Measurement Methods to Rapidly Monitor the Impact of Basin-Scale Water Management Decisions Product 1 contributes directly to project objective 1 and indirectly to project objective 2. It is generally recognized that most of the alluvial river basins in the arid and semi-arid west are impacted by salinity to some measure. In addition, water management practices, water transfer agreements, interstate river compact decisions, and other policies and practices can have both positive and negative effects on soil and water salinity, and crop land productivity, over both the short and long terms. Tools [such as electromagnetic induction methods (EM)] can be used to monitor and map changes in salinity due to changing water allocation and distribution policies in irrigated river basins in the western U.S. (McNiell, 1992; Rhoades, 1992). Subsequently, on-ground, infield salinity assessments can tie into basin-scale water and salt balance models capable of assessing the economic impact of water management policies, thereby providing for the testing and refinement of both implemented and contemplated water allocation policies in a region. This research will calibrate and evaluate the merits of using modern rapid field/basin-scale soil salinity assessment tools (salinity measurement technologies) and there implications for irrigated crop production risks, economic impact, and the implementation of alternative water management policies. Specific tasks for achieving these objectives include: 1) developing accurate correlations and correlation methodologies for calibration of rapid field- and basin-scale soil salinity assessment methods to traditional laboratory, time-consuming methods; and 2) calibrating and validating CroPMan, an EPIC-based crop-production risk model (Gerik, T., et al., 2003), using field- and basin-scale soil and water salinity data developed under task 1. Both tasks will facilitate simulating salinity and economic assessments of BMPs in hot spots of the western U.S. to improve management of salts in soils and irrigation water. For salinity assessment correlations, indirect salinity measurements (by the EM probe), soil moisture samples, soil temperature measurements, and soil samples for direct salinity analysis will be taken from chosen fields in salt-affected river basins in the western US. Samples will be taken at one-foot depth intervals to four feet at three locations within the width of the EM probe at each site where EM measurements are taken. The soil samples will be split and processed for: a) electrical conductivity directly on the saturated paste; b) saturated paste extract electrical conductivity and constituent salt ion analysis; c) replicates of 1 and 2 above using irrigation water surrogates from the associated areas from which the samples are taken; and d) soil texture. Regression correlations will be developed between indirect (EM probe) and direct (saturated paste extract conductivity) measurements of salinity. Potential factors such as soil moisture, texture, temperature, constituent salt ion content, etc, will be tested for their predictive power in accounting for variation in regression relationships. For modeling purposes, measurements will be conducted of the initial salt concentrations in the soil, concentrations within irrigation water, post-harvest soil concentrations, and concentrations and amounts of runoff losses. In addition, basic input data will be collected, including types, rates and dates of fertilizers and pesticides applied; depths, dates, and type of tillage practices; planting and harvesting dates of the crop; and most importantly, depths and dates of irrigation water applied. From the input data, a crop-enterprise budget will be developed to provide CroPMan with the necessary timing of irrigation and fertilizer applications (the two major salt contributors). Measurements of rainfall at experimental sites, and an accurate description of layered soil characteristics will be taken, including such characteristics as pH, texture, CEC, OM, bulk density (air dry), and nitrogen, phosphorus, and potassium concentrations. From this data, the salt uptake, runoff and percolation losses, and soil salt residuals associated with alternative irrigation and tillage technologies can be evaluated across heavy, medium and light textured soil types. The technologies and management practices that can be simulated over time with CroPMan using historical (measured) or randomly generated stochastic weather include: 1) no-till versus conventional tillage; 2) organic versus inorganic fertilizers; 3) flushing versus non-flushing of soil salts by heavy pre-plant irrigation; 4) seasonal row irrigation versus LEPA; and 5) plant utilization of salts by alternative crop species. Data collection, salinity measurements, and correlation assessments will involve cooperative research efforts at Colorado, New Mexico, California, Arizona, and Texas. Cooperative research will standardize measurement techniques, data collection procedures, and correlation analyses. CroPMan, supported at Blackland Research and Extension Center, will serve to integrate participant evaluations of field and basin-scale salinity assessments of alternative water allocation and management policies. Methods for Product 2: Farm-Size Characteristics, Economics, and Institutions are Central to the Design of Agricultural Water Conservation Programs Product 2 contributes to project objectives 1, 2, and 3. This research will first highlight the unique production, resource, technology, and water-management characteristics across irrigated farm-size groups for western irrigated agriculture. The research will use regional multi-product economic models to examine differential economic-cost structures by farm-size class to reveal their unique resource adjustment and conservation potential under alternative water-conservation/institutional policy arrangements for western agricultural water supplies. More specifically, this research will: 1) examine the influence of alternative land and water resource endowments, output and resource substitution possibilities, and farm irrigation production-technology differences on total economic-cost structures across irrigated farm-size classes; 2) examine the conservation effectiveness across farm size of acreage versus flow and information-based conservation program alternatives, and their implications for small farm versus environmental policy goals; and 3) examine the affect farm-size differences have on conservation willingness-to-accept values under alternative conservation program and institutional arrangements. Research for this product will be conducted in two phases. Phase one will examine the farm structural characteristics of irrigated agriculture across four farm-size classes consistent with ERS farm typology definitions. The research will use 2003 Farm & Ranch Irrigation Survey (FRIS) data to examine farm-size differences in key irrigation characteristics, such as acres irrigated, irrigation technology and water-management practices, water use by water source, irrigation costs, and financial assistance by source. Summary results for the 2003 FRIS will be compared to similar analyses conducted for the 1998 FRIS (Schaible, et al., 2004) to identify time-dependent changes. Phase two of the research will use 2003 FRIS data, supplemented with ERS ARMS and secondary data sources, and both econometric and programming optimization approaches to estimate multi-product economic models of agricultural production across regional irrigated farm-size classes. Previous multi-product production research emphasized only aggregate regional agricultural production response (Lau, 1976; Shumway, Pope, and Nash, 1984; Squires, 1987; Chambers and Just, 1989; Moore and Negri, 1992; Schaible, 1997; Schaible, 2000). However, recognizing the differential primal-dual contexts of producer behavior across farm-size classes, the unique multi-product applications for this research will endogenize farm-size specific resource-opportunity values of fixed and allocatable land and water resources within the farm resource-allocation decision process. Limited-dependent variable econometric models will be used to evaluate farm-size differences in output-specific supply response and resource allocation functions. A multi-stage programming optimization approach will integrate within a system's estimation procedure a normalized restricted profit-function model, a normalized restricted-equilibrium model, and Takayama and Judge's Reducibility Theorem to estimate farm output-specific total economic-cost structures, separately by farm-size class and region. Economic models will account for unique farm-size class resource endowments and both resource and output substitution possibilities. Differential economic-cost structures across irrigated farm-size groups by region will be used within simulation analyses to capture region-specific farm-size impacts of alternative conservation and environmental policy scenarios. Cooperative research for this product will involve participants from USDA-ERS, Colorado, Nebraska, New Mexico, Texas, and Hawaii. Cooperative research will establish: 1) a common set of farm-size characteristics used to evaluate irrigated agriculture; 2) uniformly-developed economic/resource data (based on summaries from the 2003 FRIS and ARMS); 3) a uniform conceptual framework for regional, farm-size economic models; and 4) a common set of integrated conservation and institutional policy alternatives used to evaluate the influence of farm-size on small farm and environmental policy goals. Methods for Product 3: Effects of Water Policy on Agricultural Production Risks Product 3 contributes to project objectives 2 and 3. Overall, this research will examine, in a comprehensive and systematic manner, the concept and implications of the idea that irrigation water supplies can be interrupted as a result of policy decisions, which are independent of traditional runoff-based interruptions. The comprehensive nature of this research includes both the identification and examination of alternative mechanisms to manage the risk of policy-induced water supply shortfalls from a producer, State, and Federal perspective, as well as recognizing the impact of such risks on alternative water values. The specific tasks for achieving these objectives are to: 1) identify the location and scope of irrigated agriculture that would be most likely to face reduced water supplies as a result of water policy decisions; 2) quantify the likelihood of reduced water supplies from policy decisions, or determine needed data for quantification; 3) investigate alternative mitigation mechanisms to determine who acquires the risk, and who bears the cost; and 4) investigate the institutional feasibility of alternative mechanisms, given the current legal and institutional environment of western water law and policies. This research will utilize a three-phased approach, originating with a review and summary of results for several existing cooperative research efforts. Currently, USDA s Risk Management Agency, has contracted with 7 land-grant Universities (using Cooperative Agreements through the Economic Research Service) to estimate the potential Federal costs of expanding crop insurance associated with Federal decisions that generate irrigation water shortfalls. Research for the existing ERS Cooperative Agreements lack the scope and comprehensiveness of the proposed research for this project and is not duplicative; however, a review and summary of the results for this research will provide a substantial base from which to launch the proposed project. For phase two, utilizing information on threatened and endangered species, and other State and Federal water needs, research will determine the location and quantity of associated potential water reallocations. Using historic water delivery, weather, and runoff patterns, potential water reallocations will be quantified in terms of water shortfalls under alternative reallocation scenarios deriving the location, probability and magnitude of water shortfalls attributable to water policy changes. Use of crop budget information will translate a range of water shortfalls into financial consequences. For phase three, with an initial estimate of the issue s magnitude on the income of the agricultural sector for an area, alternative insured and non-insured mechanisms can be specified and investigated. Mechanisms such as water markets and revenue bonds possible alternatives to crop insurance and disaster payments will be examined to determine the degree to which production risk for these alternatives shifts away from irrigators and towards others most likely to bear the risk. Finally, for alternatives that have economic merit, the legal and institutional requirements of the mechanism will be compared to the water laws and institutions of western States to determine their institutional feasibility. Findings from product 4 (described below) will provide the basis for these institutional comparisons. Cooperative research for this product will involve participants from USDA-ERS, Nebraska, California, New Mexico, Colorado, Oregon, Washington, and Utah. Participants will share research results from seven currently ERS-funded Cooperative Agreements, jointly establish water-shortfall criteria for alternative water reallocation scenarios, and establish a common set of insured and non-insured mechanisms as alternatives to policy-induced agricultural water restrictions. Participants will also establish a common set of criteria to evaluate risk allocation potential of alternative policy mechanisms among stakeholders. Methods for Product 4: Water Laws and Institutions for the American West Product 4 will contribute to project objectives 1, 2 and 3 because its findings will provide new information and insights to the analysis of all three products. The proposed research will develop a comprehensive and systematic body of knowledge on the laws, institutions, and procedures pertaining to a) salinity effects, b) crop insurance programs, and c) water allocation, water transfer, and water conservation and environmental policies. It will also review and critically evaluate this information and suggest necessary changes in the current laws and institutions to enhance their effectiveness and viability. The specific research tasks for achieving these objectives include: 1) developing an inventory of water laws, institutions, and procedures governing salinity effects, crop insurance programs, and water allocation, water transfer, and environmental policies in the western Unites States, using a uniform, standardized format; 2) developing objective and subjective criteria for assessing their effectiveness under different social, economic, environmental, and hydrological conditions; 3) suggesting modifications in the current laws, institutions and procedures to enhance their ability to meet newly-emerging issues, pertaining to the three areas identified; and 4) suggesting the key legal and institutional components of an effective water policy, with special reference to areas noted above, for the coming decades for the western U.S. The proposed research will be undertaken in four different phases. The first phase will involve the collection and compilation of information on water laws and institutions relating to salinity impacts, crop insurance programs, and water allocation, transfer, and conservation procedures that have been in use in the different states in the western U.S. For this purpose, a comprehensive questionnaire will be developed, reviewed for completeness and clarity, modified based on input from participants, and administered. Written responses may be supplemented by personal or telephone interviews, as needed. Phase 2 will focus on developing both subjective and objective criteria for water laws and institutions that govern the three aspects identified above. This research will draw heavily on legal and policy reviews and analyses from a variety of sources and synthesize the key findings and insights into a coherent analytical framework (Gardner, 2003; Huffaker, 2000, 2004; Loomis, 2003; Colby, 1990; Gopalakrishnan, 1973, 1996; McCann & Easter, 1999; Saleth & Dinar, 2003). Phase 3 will review and assess the recent and current laws, institutions, and procedures compiled in phase 1 using the criteria developed in phase 2 and suggest appropriate modifications to enhance their effectiveness. Phase 4 will take our research a step further by attempting to integrate the criteria developed in phase 2 with respect to water laws and institutions pertaining to salinity impacts, crop insurance, and water allocation and conservation into the larger, overarching arena of water policy. Cooperative research for this product will involve participants at Hawaii, New Mexico, Colorado, North Dakota, Texas, Utah, Washington, and USDA-ERS. Cooperative research will develop a stylized data base of western State-specific water laws and institutions and there application to salinity, crop insurance, and water allocation, transfer, and conservation issues. Research participants will develop and apply a common legal/institutional questionnaire, and establish a uniform set of objective and subjective criteria for evaluating the effectiveness and changes to existing State-specific laws and institutions. Common evaluation criteria will serve as the basis for integrating State-specific research results into a westwide policy focus.

Measurement of Progress and Results

Outputs

• Product 1: Soil Salinity Measurement Methods to Rapidly Monitor the Impact of Basin-Scale Water Management Decisions
• Product 2: Farm-Size Characteristics, Economics, and Institutions are Central to the Design of Agricultural Water-Conservation Programs
• Product 3: Effects of Water Policy on Agricultural Production Risks
• Product 4: Water Allocation Laws and Procedures in the American West

Outcomes or Projected Impacts

• Product 1. Soil and water salinity affects one quarter of all irrigated land in the U.S. A single unit change in the accumulation of salt in a soil (in units of electrical conductivity) can increase/decrease yield by 5 to 15 percent, depending on the crop. Farmers, regional water providers, USDA, State and Federal environmental agencies, as well as natural resource and wildlife habitat interests are greatly interested in reducing irrigation-induced water and soil salinity problems. One, dynamic, multi-factor, crop system-management models, such as CroPMan, are important aids in developing sound water-management policies to address both water and salinity management. Well-calibrated models can be used to test large numbers of scenarios, allowing for the screening of those that offer the most promise for profitable, sustainable farming. Two, use of accurate, rapid field-based soil salinity assessment methods are critical in practically evaluating the in-field impact of resulting changes in water-management policy. The integration of these two tools offers a powerful package for reducing the time and expense required to investigate and implement positive changes in water-management policies and institutions.
• Product 2. Findings from this research will provide Federal resource and environmental agencies (U.S. FWS, BoR, EPA), USDA (NRCS and CSREES  Extension), and State Environmental/Water Quality and Water-Management programs with the resource and economic information needed to: 1) target and integrate water-conservation programs with institutional changes that more effectively balance water conservation objectives across small-farm and environmental policy goals; and 2) enhance the economically-efficient mobilization of water resources from agriculture to emerging higher-valued demands. This research will also extend the conventional conceptual framework for water policy analyses  endogenizing farm-size specific, multiple input/output substitution possibilities within a multi-product production economic analysis. Results that differentiate policy benefits and costs by farm-size class, by region, also enhance the ability for regionally unique policy adaptability and success.
• Product 3. Findings from this research will be used to determine if there is sufficient predictability in the location and magnitude of competing water demands, such that the irrigated agricultural sector can shift part of the risk of water shortfalls to other sectors without all of the risk shifting to the Federal governments income stabilization programs. Even if there is not sufficient potential to shift a part of the production risk to others, the process of trying to quantify the risk will provide information to irrigators, Federal/State policymakers, irrigation water providers, and urban and environmental water interests, on the consequences of water reallocations to meet emerging water needs. Finally, the research will provide insight into the nature and sources of production risk in irrigated agriculture and will assist in putting the relative risks of crop failure in perspective.
• Product 4. Findings from the analysis of recent and current water allocation institutions and procedures will contribute significantly to the revamping or replacing, as the case may be, of obsolete and archaic laws and institutions. Such restructuring could help advance the creation of dynamic and flexible water institutions capable of meeting the changing and challenging water requirements of the evolving new American West. Our research will extend the boundaries of conceptual discourse as well as practical application. Furthermore, translating proposed innovations into policy prescriptions could markedly advance the effectiveness and efficiency of inter-sector water mobilization and provide a more conducive setting for the emergence of water markets and pricing. Thus, stakeholders at multiple levels will benefit from this research.

Milestones

(2005): Product 1: Evaluate and select a set of salt-affected field/river-basin samples across the western U.S. Conduct EM-based measurements across specific field/river-basin soil samples. Product 2: Analyze the farm-size structural characteristics of irrigated agriculture and their time-dependent changes based on the 1998 and 2003 Farm & Ranch Irrigation Surveys. Product 3: Completion of ongoing RMA funded research on crop insurance. Inventory and document areas with a high probability of water conflict in the western U.S. that may include reallocation of agricultural water supplies. Product 4: Inventory of water allocation laws, institutions, and procedures for states in the western U.S.

(2006): Product 1: Continue with EM-based measurements and the collection of baseline input data on salt concentrations, soil characteristics, and enterprise and technology data for CroPMan simulations. Product 2: Develop economic and resource data, by farm-size class, for econometric and programming optimization models using 2003 FRIS and ARMS data. Product 3: Develop location-specific water shortfalls under alternative water reallocation scenarios. Product 4: Development of effective legal and institutional criteria for water allocation among uses and users.

(2007): Product 1: Conduct multiple-regression correlation analysis across salinity assessment methods. Calibrate CroPMan for each of the salt-affected field/river-basin samples. Product 2: Develop and estimate farm-size specific, regional multi-product economic models of irrigated agricultural production and resource use. Product 3: Translate water shortfalls into crop revenue shortfalls and examine the magnitude and pattern of losses. Determine the set of alternative policy/institutional mechanisms for additional investigation. Product 4: Recommendations for revamping current water allocation laws, institutions, and procedures.

(2008): Product 1: Conduct salinity simulations for alternative technology and water-management scenarios. Integrate research results across field/river-basin salt-affected study areas. Product 2: Develop and analyze integrated water-conservation and institutional policy alternatives across regions by farm-size class. Product 3: Investigate the potential of each alternative mechanism to allocate risk among farmers, insurance companies or other private concerns and the Federal government. Investigate the potential for implementation given the current (and proposed) set of water laws and institutions. Product 4: Work on alternative and parallel water laws and institutions to supplement and/or replace current legal-institutional entities.

(2009): Product 1: Summarize salinity-based correlations across correlation methodologies, with an emphasis on there effectiveness as a rapid, field/basin-scale soil-salinity assessment tool. In addition, summarize simulation findings on salinity, productivity, and profitability impacts for alternative water-management scenarios across the salt-affected field/river-basin samples. Product 2: Integrate research results to recommend regionally unique, farm-size specific policy alternatives that balance small-farm and environmental policy goals. Product 3: Output findings on production risk, water reallocation policies, and risk allocations under alternative policy/institutional mechanisms to interested stakeholders -- from Federal/State policymakers to irrigation water providers to producers. Product 4: Incorporation and integration of research results into water policies.

(0):0

Projected Participation

View Appendix E: Participation

Outreach Plan

Disseminate information to a diverse policy clientele and stakeholders on: 1) the merits of using farm and basin-scale monitoring and assessment of soil and water salinity problems; 2) the farm-size structural impacts of alternative water-conservation policy perspectives and their implications for small farm vs. environmental policy goals; 3) the sources of agricultural production risk in irrigated agriculture associated with policy-restricted water supplies and ways to mitigate this risk; and 4) the conservation and reallocation merits of redesigning water laws and institutions to enhance the inter-sector mobilization of water resources. Conduct field-day demonstrations and workshops, and develop suitable publications (fact sheets and agricultural information bulletins) that integrate water risk-management and farm-size economic results with the crop insurance and water conservation programs of USDA's Farm Service Agency and its Natural Resource Conservation Service. Basin-scale soil and water salinity results will be summarized to assist EPA and State environmental quality programs adjust water-management programs designed to reduce irrigation-induced water and soil salinity problems. Showcase research findings to a global audience through the publication of original papers written by technical committee members within professional journals, including a potential special issue of the International Journal of Water Resources Development. Use web-based electronic media, including: 1) USDA/ERS website Excel spreadsheet tables to detail the farm-size structural characteristics of irrigated agriculture; 2) web-based media to showcase data on the financial consequences of policy-restricted water supplies and the risk burdens of alternative strategies and mechanisms that mitigate agricultural losses; and 3) web-based media to showcase water reallocations for specific water conflicts and use these reallocations to highlight the effectiveness and efficiency of alternative water transfer mechanisms.

Organization/Governance

The technical committee for this project will be organized as follows:

Chair,
Vice-Chair (chair elect),
Secretary (vice-chair elect)

Each year the project participants will elect a new secretary. The positions will rotate upward year to year from Secretary to Chair. The Chair is responsible for the organization of the annual meeting the year he/she is serving, and is ultimately responsible for submission of the annual report as assisted by the Vice-Chair and Secretary. At times, the technical committee may choose to organize ad-hoc sub committees for various purposes such as proposal writing, special annual meeting events (e.g., field trips), etc.

Literature Cited

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Chambers, R.G., and R. E. Just. 1989. Estimating Multiproduct Technologies, American Journal of Agricultural Economics, Vol. 71, November: pp. 980-85.

Colby, B. 1990. Transactions Costs and Efficiency of Western Water Markets. American Journal of Agricultural Economics Vol. 72: pp. 1184-1122.

Gardner, D. 2003. Weakening Water Rights and Efficient Transfers. International Journal of Water Resources Development Vol. 19: pp. 7-19.

Gerik, T., W. Harman, J. Williams, L. Francis, J. Greiner, E. Steglich, M. Magre, and A Meinardus. 2003. CroPMan (Crop Production and Management model) Users Guide: Version 3.2, BREC Report No. 2003-03, Texas A&M Blackland Research Center, Temple, Texas, pp.123.

Ghassemi F., A. J. Jakeman, H. A. Nix. 1995. Salinisation of Land and Water Resources: Human Causes, Extent, Management and Case Studies. UNSW Press, Sydney, Australia, and CAB International, Wallingford, UK.

Gopalakrishnan, C. 1973. The Doctrine of Prior Appropriation and its Impact on Water Development: A Critical Survey. The American Journal of Economics and Sociology Vol. 32: pp. 395-403.

Gopalakrishnan, C. 1996. The Politics of Water in Hawaii: An Institutional Appraisal. International Journal of Water Resources Development Vol. 12: pp. 297-310.

Huffaker, R., N. Whittlesey and J. R. Hamilton. 2000. The Role of Prior Appropriation in Allocating Water Resources into the 21st Century. International Journal of Water Resources Development Vol. 16: pp. 265-273.

Huffaker, R. 2004. Finding a Modern Role for the Prior Appropriation Doctrine in the American West. In Water Institutions: Structure, Performance, and Prospects, C. Gopalakrishnan, C. Tortajada, and A. K. Biswas, eds. (In Press).

Lau, L. L. 1976. A Characterization of the Normalized Restricted Profit Function. Journal of Economic Theory Vol. 12, February: pp. 131-63.

Loomis, J.B., K. Quattlebaum, T.C. Brown and S.J. Alexander. 2003. Expanding Institutional Arrangements for Acquiring Water for Environmental Purposes: Transactions Evidence for the Western United States. International Journal of Water Resources Development Vol. 19: pp. 21-28.

Maas, E.V. 1990. Crop Salt Tolerance. In Agricultural Salinity Assessment and Management Manual, K. K. Tanji (ed.). ASCE, New York: pp. 262-304

McCann, L. and K. W. Easter. 1999. Differences Between Farmer and Agency Attitudes Regarding Policies to Reduce Phosphorus Pollution in the Minnesota River Basin. Review of Agricultural Economics Vol. 21: pp. 189-207.

McNeill, J. D. 1992. Rapid, Accurate Mapping of Soil Salinity Using Electromagnetic Ground Conductivity Meters. In Advances in Measurement of Soil Physical Properties: Bringing Theory into Practice, G. C. Topp, W. D. Reynolds and R. E. Green (eds). SSSA Special Publication No. 30, ASA, Madison, Wisconsin: pp. 209-230.

Moore, Michael R., and Donald H. Negri. 1992. A Multicrop Production Model of Irrigated Agriculture Applied to Water Allocation Policy of the Bureau of Reclamation. Journal of Agricultural and Resource Economics, Vol. 17, No. 1: pp. 29-43.

National Academy of Sciences. 2003. Endangered and Threatened Fishes in the Klamath River Basin: Causes of Decline and Strategies for Recovery. National Academy Press (www.nap.edu/catalog/10838.html).

Rhoades, J. D. 1992. Instrumental Field Methods of Salinity Appraisal. In Advances in Measurement of Soil Physical Properties: Bringing Theory into Practice, G. C. Topp, W. D. Reynolds, and R. E. Green (eds). SSSA Special Publication No. 30, ASA, Madison, Wisconsin: pp. 231-248.

Saleth, R. M. and A. Dinar. 2002. Water Institutions and Sector Performance: A Quantitative Analysis with Cross-Country Data. (Draft)

Schaible, Glenn D., C. S. Kim, and Carmen L. Sandretto. 2004. Western Irrigated Agriculture: Characteristics by Farm-Size Class. Electronic Data Product, ERS website, www.ers.usda.gov/data/, (forthcoming, March 2004).

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Schaible, Glenn D. 1997. Water Conservation Policy Analysis: An Interregional, Multi-Output, Primal-Dual Optimization Approach. American Journal of Agricultural Economics, Vol. 79, February: pp. 163-177.

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Attachments

Land Grant Participating States/Institutions

AZ, CA, CO, HI, ID, IN, KS, MI, MO, ND, NE, NM, TX, WA

Non Land Grant Participating States/Institutions

US Bureau of Reclamation, USDA-ARS Northern Great Plains Research Lab, USDA-NRCS, USDA/ERS