Conserving water resources: how the Farm Bill can improve irrigation efficiency and get more water conservation for the taxpayer buck Frank A. Ward Professor of Water Policy NM State University Washington DC Dirksen room 406 June 7, 2013

Background

• Continued population and urban demand growth • Shrinking key ecological assets • Irrigated ag consumes 85-90% of water in NM • Ongoing search for ways to conserve water in irrigated agriculture • Climate Change: more floods/droughts, greater conflict potential in dry places like NM – technology (drip, sprinkler, water saving crops) – policy (subsidies, regulations, pricing, … ) – Projects (infrastructure, leveling, … ) 2

Aim: Identify recent lessons learned about policies that can promote real water savings in irrigated agriculture Recent study: Analyzed irrigation water conservation subsidies for their effect on water used in irrigation and on conserved water available for other uses .

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Reducing irrigation water use

• Reduce land in production – Cities buy or rent water or water rights from ag – Farm prices deteriorate • Alter crop mix, e.g.: – More acres in cotton – Fewer acres in alfalfa, pecan orchards – Develop more drought tolerant crop varieties • Reduce water application rates (deficit irrigate) • Shift to water conserving irrigation technology – To sprinklers – To drip irrigation 4

Reminder

Evaporation v Transpiration Irrigation / Ac

Weighted Ave over Crops (EBID)

Technology Apply ET Surface 4.27 2.74

Drip 3.45 3.16

E? T?

I. Eff 0.64

0.90

5

Separating E from T Z. Samani, NMSU, April 3, 2013 • No simple methods for separating E and T. His satellite ET map of EBID does not split E-T. 6

Gaps

• Little work in NM (or elsewhere) explaining what affects irrigation water savings that integrates – Farm economics: – Farm hydrology: – Agronomy: – Basin hydrology: profitability water application yields by crop net water depletions – Basin institutions: protect senior water rights 7

Aims

• Data: Assemble data on crop water applications, crop water use, yields, land in production, crop mix, cost, and prices that characterize economics of irrigated ag in NM’s RG Project Area • Economic analysis: Analyze profitability, production, land and water use in the Area.

• Policy Analysis: Forecast the same for: – Several drip irrigation subsidies – Selected water supply scenarios 2 6 8

Study Region: Elephant Butte Irrigation District, NM

• http://www.ebid-nm.org/ 9

Approach

• Analyze water conservation from surface to drip. – Farm Income effect • Integrates subsidies that reduces capital cost to convert – Hydrologic effect on water app/depletion farm economics and basin hydrology 10

Farm Economics

• NM State U Farm costs and returns • Published by NM county, year, crop, and irrigation technology • Web - http://aces.nmsu.edu/cropcosts/ 11

Pecans, drip irrigated

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Pecans, surface irrigated

13

Pecans: Drip or Surface Irrigated 14

Farm Water Economics 101

• Compare drip and surface irrigation – Drip: – Drip: – Drip: better applies quantity and timing of water that the plant needs for max yields higher yields higher ET, lower aquifer recharge reduces water applied – Drip: conversion costs are high 15

Cost of Converting: Surface to Drip Irrigation • Conversion Capital Costs: – About $2500 / ac for 10 year life – About $365 / ac per year at 7% interest • Conversion is a major investment, so for the conversion to increase income: – Yield gain must be high – or – $ Value of saved water must be high 16

Quantitative Analysis of NM Ag Water Conservation • Maximizes Farm Income by choosing land in production, by – crop – irrigation technology 17 • Subject to Constraints – Hydrologic (gw, sw) – Agronomic: yields, including salinity – Economic: Pecan acreage – Institutional

Crop Water Data Used, EBID, NM (Samani)

Crop Alfalfa Cotton Lettuce Onions Green Chile Red Chile Pecans Tech S A 5.0

ET ac-ft/ac/yr 3.3

R 1.7

Yield ton/ac Tech A ET ac-ft/ac/yr R 8.00

D 4.1

3.7

0.4

Yield ton/ac 9.00

S S S S S S 3.0

2.5

4.0

3.0

3.0

5.0

2.3

1.5

2.3

2.0

2.0

3.0

0.7

1.0

0.7

1.0

1.0

2.0

0.42

11.88

D 16.88

11.00

1.75

0.58

D D D D D 2.8

1.9

3.0

2.7

2.5

4.1

2.5

1.7

2.7

2.4

2.2

3.7

0.3

0.2

0.3

0.3

0.3

0.4

0.46

13.83

20.08

13.25

1.95

0.72

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Under the Hood

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Max Irrigation Income

NPV Income

 

u c k t Inc uckt

(1 

r u

)

t t u



location c k



crop



irrig tech



year

( )

Inc

uckt

 [

P

ct

*

Yield

uckt



Cost

uckt

]

L

uckt

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Constraints

• EBID land: about 90 K acres • EBID area water price and supply – SW = 4 – 6” 2013 – GW = $90 per af pumped 2013 • Salinity impacts on yields • Institutional – Endangered Species Act – Rio Grande Compact – US Mexico Treaty of 1906 – Rio Grande Project operation agreement (NM/TX) • Water Rights Protection – No increase in water depletions: NM OSE 21

Lessons Learned: water conserving technology • Irrigators invest in water-saving technologies when faced with lower costs for converting from surface to drip. • Drip irrigation subsidies  farm income, value of food production, and   crop yields,  crop water applications.

• By raising crop yields and raising crop water ET, drip irrigation subsidies put upward pressure on water depletions.

• Where water rights exist, authorities need to guard against  depletions with growing subsidies that reduce water applications .

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What promotes real water conservation in irrigation?

• Better water measurement – Gauges – Tracking use by crop (application, ET) • Better water accounting – Current use patterns – Potential use patterns • Adjudications – Who has the senior/junior rights in the face of future supply variability. Important as drought/climate intensifies. – Can promote trading water for $ 23

Draft Language in Farm Bill by Senator Udall • Ensure that producers who get help to buy irrigation equipment do not use any of resulting water savings to bring more land under irrigation; • Provide assistance to producers to make a transition to less water intensive crops or to dryland farming; and • Authorize EQIP payments for practices that enhance and protect the flow of water in streams and rivers affected by irrigation.

• Ensure that producers who get help for irrigation equipment do not deplete more water from the river system than they did at some base period (FAW addition). 24

Thank you

http://agecon.nmsu.edu/fward/water