Farm and community-level impacts of irrigation water supply reductions : a case study of Malheur County, Oregon Public Deposited

http://ir.library.oregonstate.edu/concern/graduate_thesis_or_dissertations/x346d7503

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  • Agricultural water supplies are becoming increasingly uncertain in the western United States due to rising demand from competing water users, environmental restrictions on surface water withdrawals due to water quality and endangered species concerns, and, potentially, climate-induced hydrological changes. Since many rural areas in the West depend economically upon irrigated agriculture, increased water supply variability may not only affect the agricultural sector, but may also have significant regional economic impacts. This study investigates the distribution and magnitude of farm and community level economic impacts of water supply fluctuations through a case study of an irrigation district located in an agriculturally-dependent county in southeastern Oregon. In addition to estimating the value of irrigation water, this study examines the effectiveness of three strategies to mitigate the economic consequences of fluctuating water supplies: 1. increased accuracy of water supply forecasts, 2. additional irrigation technology adoption, and 3. implementation of a water market or water bank. Two models were utilized to estimate the economic impacts. First, a linear programming model written in the General Algebraic Modeling System (GAMS) was used to estimate the profit and revenue effects of four water supply scenarios on six representative farm types. Second, results from the linear program were used to conduct a regional impact analysis in an input-output model to ascertain how the farm revenue effects impact community-level employment and income. Results indicate that expected annual revenue losses due to water shortages under current conditions range from 4 to 14%, while the expected annual profit losses range from 9 to 12%. Expected annual farm profit losses on the large ranches, feedlot operations, and row crop farms comprise 75% of total expected farm profit losses. County-level employment and income losses due to water supply variations in this irrigation district (comprising 16% of irrigated land in the county) were limited to less than 1%, even in the most severe water shortage scenario. Results also suggest that of the three mitigating strategies, additional irrigation technology adoption best reduces farm and community-level economic losses. A doubling of the current levels of sprinkler and drip irrigation technology resulted in a 5% increase in expected farm profits and a 0.1% increase in expected county income. Although water trading and improved accuracy of water forecasts similarly reduced farm profit losses due to water shortages, both resulted in greater expected farm revenue losses and hence greater community-level economic losses.
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