Author

Marlyn Fife

Date of Award:

1967

Document Type:

Thesis

Degree Name:

Master of Science (MS)

Department:

Applied Economics

Advisor/Chair:

B. Delworth Gardner

Abstract

In Utah all water, both on or below the ground surface, is considered public property. The right to use water is obtained by fellowing certain subsiding procedures of appropriation through the office of the State Engineer. Any right to the use of water may be changed to some other beneficial use with the approval of the State Engineer; however, there must be no interference with other rights, unless proper compensation has been made.

Agriculture still uses most of the available water in Utah; However, farmers' needs for water are not exactly the same. When allocation per acre is the same among farmers, water soon comes to have different values. Unless some mechanism arises to permit transfer of water, misallocation results. the Cache Valley area was chosen to illustrate the Misallocation problem.

Input-output data which the Bureau of Reclamation used in their feasibility report on the Cache County area of the Oneida project were analyzed to determine the value of residual water. All factors of production except water, such as land, capital, seed, fertilizer, fuel, labor, and repairs were calculated at their market prices. These were subtracted form the value of a unit of product and the residual value was then imputed to water as one estimate of its value. Varying farm sizes and different cropping practices were studied to show the effect these variables had on water values.

Agricultural water users on the Logan River distribution system were interviewed to find the value of water rentals and water-right sales. The water-right prices quoted by farmers and irrigation company officials were stated in terms of dollars per share. Since a share delivers varying quantities of water along the complete river system the "right" values were converted to vale per acre-foot. local customs, existing water laws and past court decisions were examined to ascertain their role in water transfer.

The principle of equal marginal value was applied to Logan River water supplies. Marginal value in use reflects the amount in dollars which consumers would be willing to pay for the last unit of water consumed. In a perfectly competitive rental market the price of water reflects the value of the marginal product.

A brief historical sketch of the Bear Lake system and the irrigation companies making up the Logan River distribution system is given. The water rights of the individual companies are listed and a brief resumé of water-right laws and administration is supplied. legal decrees and litigations relative to irrigation supplies, power requirements and urban use, vis. The Call and Kimball and Logan City vs Water Users (1963) decrees are discussed. The effect these decisions have on water use in Cache Valley is noted.

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