Appraisal Report Central Arizona Project

Document: "Appraisal Report Central Arizona Project-Chapter V", January 1962, page 54CHAPTER V - ECONOMIC AND FINANCIAL ANALYSES Previous chapters have presented the Central Arizona Project plan and described facilities associated with importation of an assumed quantity of additional water to the project area. This chapter presents the economic justification and financial feasibility of constructing the project. The economic justification is measured by comparing the costs required to construct and operate the Central Arizona Project works with the benefits which will result from construction of such works. The financial feasibility is measured by demonstrating the manner in which the costs of the project may be repaid. Agricultural Economy Although construction of the central Arizona Project as presently envisioned would generate many benefits to the States of Arizona and New Mexico, the Lower Colorado River Basin, and the Nation as a whole, the principal objective of the original plan was, and still is, the stabilization and prevention of retrenchment of the agricultural economy of the project area. Without an imported supply of water, some irrigated lands will eventually have to be abandoned and urban developments resulting from the population increase in the area will encroach on other irrgated lands. The exact time and magnitude of these events cannot be foretold with any degree of certitude. In order to evaluate the economic effects and payment capacity resulting from the imported water that could be delivered to existing developed farm land, the farm budget method of analysis has been employed. This method compares farm production costs, including investment in land, buildings, and necessary equipment, with gross returns to the farm to 54Epson Perfection 4870 Photo, 400 dpi, 8 bit, 1,075,747 byte