Assessing Economic Impacts to Irrigated Agriculture from Changes in Water Supply: An Assessment Using a Yield-Response Optimization Model
This research proposal focuses on the profit-changing effects due to small changes in irrigation water availability when crop-specific yield response functions are added to an existing optimization model. This allows for an in-depth examination of possible management and production responses by irrigators when faced with changing water supplies.
Analyzing the economic impacts of these changes to profitability is not only of interest to irrigators, it can also significantly impact the bottom line of Reclamation economic analyses such as payment capacity and ability-to-pay. This research project will enhance Reclamation's ability to evaluate those economic impacts over and above the current state-of-the-art analyses, which depend on anecdotal yield response data.
Need and Benefit
Currently, the referenced optimization model and regional models developed within IMPLAN are being used by Reclamation economists. However, the models have not been formally linked.
This research focuses attention on maximizing agricultural outputs given a set of limiting factors such as slightly limited water supplies. Along the way, the model will provide thresholds for adopting combinations of management strategies coupled with technology. Thus, the model can provide financial information to help decision-makers in selecting a course of action that will benefit irrigators and irrigation districts by efficiently managing the limiting factors faced by these entities.
An optimization model is a flexible, powerful platform that can provide information to decision-makers about the tradeoffs between different management decisions. The optimization model currently used also has the advantage of being able to simultaneously model economic impacts for multiple regions and has prepared databases for multiple river basins. Incorporating the yield response functions would allow this model to be even more useful for completing economic analyses in a timely, efficient manner.
However, modeling the on-farm impacts alone does not tell the whole story. By first modeling the on-farm impacts to irrigators and then expanding the focus of the impacts to the surrounding community, this decision-making tool becomes more robust. Analysts and decision-makers have a more complete picture of the economic impacts that will be experienced throughout the region under study.
The ability to pass economic information quickly and seamlessly from one economic model to another enhances the output of both the on-farm impact model and the regional impact model.
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This information was last updated on October 25, 2014
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