TR-348: Economic Impacts of Salinity Control Measures for the Upper Pecos River Basin of Texas

This report presents the results for Subtask 1.7 of the Pecos River Basin Assessment project sponsored by the U.S. Environmental Protection Agency (EPA) and the Texas State Soil and Water Conservation Board (TSSWCB). The original objective of Subtask 1.7 was to measure the economic impact of Tamarix spp. (saltcedar) control along the Texas portion of the Pecos River. As work progressed on other hydrologic studies associated with this project, the scope of the project shifted to analyze the expected economic impacts of implementing potential salinity control measures on the Pecos River above Red Bluff Reservoir to decrease salinity levels in water used for irrigation in Texas. Scenarios evaluated quantified the economic impact of improving water quality used by Texas irrigators to the level of water utilized by the Carlsbad Irrigation District in southern New Mexico. The purpose for this evaluation was to see if the overall economic impact of producing less salt tolerant, more profitable crops might be significant enough to encourage producers to convert current cropping practices to more profitable practices not currently useable due to elevated irrigation water salinity levels. Between 1970-2005, irrigation storage and delivery data from the Red Bluff Water Power Control District (RBWPCD) were analyzed and water delivery from the year 2005 was used as a representative level of available irrigation water. Estimates of current cropping patterns for the irrigated lands within the seven sub-districts of the RBWPCD were established. Data were collected and reviewed for the Carlsbad Irrigation District of New Mexico, just up stream from Red Bluff Reservoir, to establish two estimated alternative cropping patterns under a reduced salinity environment. The differences in the value of farm production between the baseline scenario and the two alternative cropping patterns were entered into the Impact Analysis for Planning (IMPLAN) input-output model of the six county upper Pecos River Basin to quantify the general economic impact to the local economy as a result of changes in current cropping practices. As compared to the typical cropping practices, Alternative 1 reduces the more salt tolerant cotton acreage and moderately tolerant wheat acreage while increasing the acreage of moderately salt sensitive alfalfa. The direct output effect for this alternative cropping pattern was $1,446,206; an increase of 120 percent over the current typical cropping system. The total economic impact to the local economy was $2,807,166 with a net creation of 1.17 full time employee (FTE) jobs. This scenario did not incorporate the impacts to local cotton gins and as a result may be a less desirable option. Alternative 2 maintains cotton acreage, reduces wheat acres, and increases alfalfa acres as compared to typical practices. Compared to Alternative 1, this scenario models one-third of the alfalfa acreage, 5.5 times more acres cotton and equal amounts of wheat. The direct output effect for this alternative cropping pattern was $815,378; an increase of 130 percent over the current typical cropping system. The total economic impact was $1,588,795, and will generate a net increase of 7.8 FTE jobs. 2 The combined effective delivery losses of the Pecos River channel and the sub-district delivery infrastructure have averaged 55.5 percent since 1970. Uncertainty stemming from weather patterns, annual irrigation water availability, and the delivery losses of the current system complicate planning and deter investments by both farmers and irrigation districts making a large-scale conversion from current cropping practices to potentially more profitable practices less likely. In order to increase the likelihood of cropping changes and promote future irrigated agriculture in the basin, a new study of the infrastructure improvements for the RBWPCD and the 7 sub-districts is needed; this was last done in 1991. This study did not measure the impact of increasing available water supplies because it is outside the revised scope of the project and is furthermore an unlikely scenario given the region’s climate. Tremendous increases in grain prices, fuel, and fertilizer costs in recent months can potentially alter economic impacts predicted by this study; these dramatic changes have likely changed demand and production functions of several industries. An updated analysis is needed to better quantify potential economic impacts under the current economic situation. The primary focus of this analysis has been on irrigated farm production; however, the initial intent was to evaluate the economic impacts of saltcedar control in the riparian corridor in general. A large majority of lands in the riparian corridor and watershed are classified as rangelands; which can have a significant impact on the watershed’s economy. Results of a survey of landowners/managers along the Pecos River can be found in appendix 2. This survey was conducted to quantify economic impacts realized by landowners along the river as a result of saltcedar treatment along the river. Generally speaking, these landowners/operators have had little economic benefit or value from the treatment of saltcedar along the Pecos River