Adjusting to diminishing water supplies in irrigated agriculture

Typescript (photocopy).The purpose of this dissertation is to analyze econometrically the adjustments that occur in irrigated agriculture in response to increases in the cost of obtaining groundwater. In recent years there has been a growing concern regarding the future availability of water resources for agriculture in the western United States. This concern is based primarily on irrigated agriculture's heavy dependence on groundwater (84% of all irrigation water comes from underground sources), a resource which has become increasingly expensive to obtain. Since 1971, the cost of pumping one acre foot of water has increased over 685 percent (in nominal dollars) for natural gas energy, and similar increases have resulted for other energy sources. Both a falling water table and dramatic jumps in energy prices are responsible for these tremendous cost increases. In order to gain insight into the future of irrigated agriculture, researchers first must have a complete understanding of the structure of production in irrigated agriculture. Although particular aspects of the problem have been studied, a comprehensive study of the entire production process has not been undertaken. This study helps to fill this gap in the literature by empirically analyzing the use of water as an input in the agricultural production process. This study does not analyze the demand for water in isolation from the other inputs and outputs. A multiple output-multiple input model will be used so that changes in relative output supplies can be studied, as well as changes in relative input demands. Previous studies have not adequately treated the multiple output aspect of the problem. In particular, this analysis shows that (1) the demand for water is significantly elastic, (2) crop switching occurs as pumping costs increase, (3) available substitutes for water do exist, in the form of various types of irrigation equipment and techniques, and (4) water saving technological change has occurred. The empirical part of this study relies primarily on data from the High Plains of Texas, a large irrigated agricultural area. The problems faced in this area typify the problems faced in other agricultural areas of the High Plains of the United States. Thus this study should provide insight into the future of irrigated agriculture in these areas as well as for the HIgh Plains of Texas