Date of Award:
Doctor of Philosophy (PhD)
Economics and Finance
Allen D. LeBaron
Three Bureau of Reclamation projects, which represent a broad cross-section of the eleven total in Utah, are studied in order to shed light on the value of the invested resources to U.S. taxpayers, the people of Utah, and the local farmers.
The bureau's nonmultiple-purpose projects in Utah are termed "supplemental" as opposed to "full-service" because some amount of irrigation was already in place.
Recent findings from field trials of yield vs. evapotranspiration for major crops grown in the Western states were employed to assess the annual productive value of existing river water rights had the three projects not been built.
Annual estimates of crop values or revenues for each project were obtained from Bureau of Reclamation publications. However, an allowance for annual crop production costs is needed in order to arrive at annual project net incomes (net benefit streams). Cost per acre data were obtained from published intermittent farm studies and reports of farm budgets beginning as early as 1910. This information was then converted to a series of trends in annual production costs by linking to reported indices of farm prices paid as reported by the USDA for the past 80 years.
Projects are arbitrarily judged to be "economically efficient" if the estimated internal rate of return at least exceeds borrowing cost to the U.S. Treasury at the time that each project was built, e.g., from 3.5 to 4.5 percent. Only the Strawberry project results suggest that the borrowing rate was exceeded. The Newton project has realized a slight positive return of less than 1 percent, and the Hyrum project has realized negative returns. Thus, the economic results of the bureau's irrigation program in the state have been mixed. Claims of great benefits from water development are not substantiated by the study results. The only unambiguous beneficiaries are farmers whose included lands had very poor or no water rights prior to project construction.
McQueen, Steve, "An Estimation of Primary Benefits Realized on Three Bureau of Reclamation Projects" (1989). All Graduate Theses and Dissertations. 4145.