Date of Award:

5-1974

Document Type:

Thesis

Degree Name:

Master of Science (MS)

Department:

Economics and Finance

Department name when degree awarded

Economics

Committee Chair(s)

Jay C. Andersen

Committee

Jay C. Andersen

Committee

Thomas C. Anderson

Committee

Alton B. King

Committee

John Keith

Abstract

Water provides the lifeblood of Utah's agricultural economy. It Is the subject of much controversy and litigation and yet most opinions on the subject are based on opinions and prejudice rather than upon the basis of sound scientific examination. This paper attempts to provide some of the economic information necessary for sound decisions in the development and use of Utah's water resources with respect to agriculture.

Utah has been divided into ten drainage regions (hydrologic subregions) and the presently irrigated and potentially irrigable land according to land class was estimated for each county or portion of a county within each of the regions. Water use factors, crop rotation constraints, costs of production, yields, product prices, and costs of bringing new land into production were also estimated. These values were then used in the linear program demand model to estimate a normalized demand (marginal value product) curve for water to be used in agricultural production within each region. The available level of water was varied in each of the demand curves to estimate the relationship between the quantity of water and its economic value (a demand function).

Within region supply (marginal cost) curves for water to be used in agricultural production were estimated for the years 1965, 1980, and 2000 using a linear programming (L.P.) model. The demand and supply curves for each region were combined to estimate an equilibrium point (marginal value product = marginal cost) for each of the three time periods in each region.

Potential development within each region is also discussed. Demand curves for water to be used on potentially irrigable land were estimated with various underlying assumptions. The marginal water values identified in this manner were compared to the average cost of importing water into each region and with the marginal cost of using any excess water found within the region to open new agricultural areas.

The general conclusions from the study indicate that most parts of the state suffer from a water shortage in that more production could be obtained from the presently irrigated land through the use of more water and/or the transfer of water from lands with low productivity to higher quality land. There are, however, many cases of water waste. The model is not designed to adequately evaluate the economic feasibility of water importation projects but those regions with the greatest potential for development are identified. The models indicate that, given the present cost and price structure, agriculture alone probably could not economically justify most water importation schemes at this time.

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