Irrigation Efficiency Improvements: Technical, Economic, and Policy Issues

1. Irrigation Efficiency Improvements: Technical, Economic, and Policy Issues NM Geological Society   NM Tech University, Socorro Frank A. Ward NMSU ACES April 12, 2013

2. Background • Climate Change: more floods/droughts, greater conflict potential in dry places like NM • Continued population growth • Growing values of shrinking key ecological assets • Growing values of treated urban water (pop + econ) • Irrigated ag consumes 85-90% of water in NM • Ongoing search for ways to conserve water in irrigated agriculture • technology (drip, sprinkler, water saving crops) • policy (subsidies, regulations, pricing, … ) • Projects (infrastructure, leveling, … )

3. History of Water Use in Rio Grande • Why that history is important • Uncover long term water supply trends • Discover lessons for drought adaptation • Data sources • Stream gauges since late 1800s (into and out of NM) • Long term historic tree ring analysis • Water delivery records of cities, towns, and other water suppliers (e.g., Santa Fe, Albuquerque, LC). • Historic farm production, yield, acreage • History Books (2 better-known) • Great River: The Rio Grande in NA History (P. Horgan, 1984) • Water in NM, A History of its Mgmt, Use (I. Clarke, 1987)

4. Historic RG Flows into NM (k-af/yr)USGS Stream Gauge Data – 3 hws • Rio Grande at Del Norte (CO) • Flows = 657.93 – 109.17 post 2000 • 1891-2010 (110 years) • Conejos River at Mogote (CO) • Flows = 238.59 – 49.16 post 2000 • 1899-2010 (101 years) • Rio Chama at Chamita (NM) • Flows = 438.14 –99.05 post 2000 • 1970 – 2010 (41 years)

5. Ways to reduce ag water use • Reduce land in production • Cities buy or rent water or water rights from ag • Farm prices deteriorate • Alter crop mix, e.g.: • More acres in cotton • Fewer acres in alfalfa, pecan orchards • Develop more drought tolerant crop varieties • Reduce water application rates (deficit irrigate) • Shift to water conserving irrigation technology • To sprinklers • To drip irrigation

6. A ReminderEvaporation v TranspirationWater Use/AcreWeighted Ave over Crops

7. Separating E from TZ. Samani, NMSU, April 3, 2013 • No simple methods for separating E and T.  His satellite ET map of EBID does not split E-T.   • Theoretical approaches are hard to test. • For any given crop, drip irrigation typically produces higher yields, so has more ET than surface irrigation.    • For any given crop, Samani’s ET map should show higher ET for drip than surface irrigated ones.  • But drip acreages in EBID map area are small. He has not yet made that test.

8. Gaps • Little work in NM (or elsewhere) explaining what affects irrigation water savings that integrates • Farm economics: profitability • Farm hydrology: water application • Agronomy: yields by crop • Basin hydrology: net water depletions • Basin institutions: protect senior water rights • Big gap in NM and elsewhere

9. Aims • Data: Assemble data on crop water applications, crop water use, yields, land in production, crop mix, cost, and prices that characterize economics of irrigated ag in NM’s RG Project Area • Economic analysis: Analyze profitability, production, land and water use in the Project Area. • Policy Analysis: Forecast land and water use, crop production, farm income, and economic value of water in the Project Area for: • Several drip irrigation subsidies 2 • Selected water supply scenarios 6

10. Study Region: Elephant Butte Irrigation District • http://www.ebid-nm.org/

11. EBID recent history (acreage)

12. Cash Receipts Doña Ana and Sierra Counties (2005, $million)

13. Approach • Analyze water conservation subsidies that reduces capital cost to convert from surface to drip. • Public policy: Taxpayer $ to reduce the costs of drip irrigation conversion • Private effect: Makes it cheaper to convert • Integrates farm economics and basin hydrology

14. Farm Level Economics • NMSU Farm costs and returns • Published by NM county, year, crop, and irrigation technology • Web -- http://aces.nmsu.edu/cropcosts/ • Our analysis: Assumes growers maximize income while limited by water allocations, land, and available crop choices

15. Basin Hydrology:Water Rights Administration • Requires water depletions in the basin to be no larger with water conservation subsidies than without them • Distinguishes crop water application from water depletion for both surface and drip irrigation

16. Pecans, drip irrigated

17. Pecans, surface irrigated

18. Pecans: Drip or Surface Irrigated

19. Farm Economics • Drip compared to surface irrigation • Drip: better applies quantity and timing of water that the plant needs for max yields • Drip: higher yields (higher ET) • Drip: reduces water applied • Drip: conversion costs are high • Farmers need economic advantage to convert from surface to drip irrigation. • Growers convert not to conserve water, but for income • At low water prices the economic advantage of converting typically is weak or negative • Yield gain must be very large

20. Cost of Converting:Surface to Drip Irrigation • Conversion Capital Costs: • About $1500 / ha for 10 year life • About $150 / ha per year • Conversion is a major investment, so for the conversion to increase income: • Yield gain must be high • or • $ Value of saved water must be high

21. Basin Hydrology • NM water administration (NMOSE) is charged to protect existing water rights • This means • Applications / acre fall with drip irrigation • Depletions cannot increase • For a given crop, yields are higher under drip than under surface irrigation • Higher yields consume higher ET

22. EBID Remote Sensing: NMSU • Basin-wide Evapotranspiration mapping • Demand forecasting, water operations support • Depletion changes with: • Management options • Changing crops • Drought cycles • Informs sustainable water management

23. Our Empirical Analysis of NM Ag Water Conservation • Maximize • Objective: Farm Economic Returns • Subject to • Constraints • Hydrologic • Agronomic • Institutional

24. Policy Assessment Approach Data Policy Outcomes Process Headwater supplies Law of the River Crop prices Crop costs Water price Land supply Maximize NPV for EBID Crop prodn Crop ET Crop Mix Water Use Water Saved Farm Income NPV Baseline: no new policy Alternative : Various drip irrigation subsidies

25. Ag Water Balance

27. NM Pecans: Water BalanceTotal ET: higher with drip Surface Drip 5’ 4.1’ 3.7’ 3.0’ 2.0’ 0.4 Return to system Return to system

28. Under the Hood

29. Max Irrigation Income

30. Constraints • EBID land: 90 K acres • EBID area water price and supply • SW = 4 – 6” 2013 • GW = $90 per af pumped 2013 • Salinity impacts on yields • Institutional • Endangered Species Act • Rio Grande Compact • US Mexico Treaty of 1906 • Rio Grande Project operation agreement (NM/TX) • Water Rights Protection • No increase in water depletions: NM OSE

31. Results • Ag Water Use and Water Savings • 0 pct drip conversion subsidy • 100 pct drip conversion subsidy

35. Lessons Learned - drought • Irrigators invest in water-saving technologies when faced with lower costs for converting from surface to drip. • Drip irrigation subsidies  farm income,  crop yields,  value of food production, and  crop water applications. • However, by raising crop yields and raising crop water ET, drip irrigation subsidies put upward pressure on water depletions. • Where water rights exist, authorities need to guard against  depletions with growing subsidies that reduce water applications. • In the RG Project Area, a 100% subsidy of the cost of converting from surface to drip irrigation raises the economic value of water from $___ to $___ per acre foot depleted in year 2013 with 20% of full surface supplies.

36. Research Questions • Ag water use and conservation: hard to • define • measure • forecast • evaluate • change • Need better measurement of water use by field, farm, district, basin (accounting) • What policies motivate growers to reduce ag water depletions?

37. Research Questions • How will adjudication of NM’s streams help ag water conservation and make more water for urban and environmental uses? • How will climate warming affect best policies to promote ag water conservation?

38. Research Questions • What policies would sustain NM’s aquifers affordably? • What actions would reduce ag water use likely to occur? • Without climate change • With climate change that affects: • Yields • Evaporation • ET • Supplies • With high, medium, low future: • Prices • Yields • Costs

39. One research/policy question • Cheapest way to reduce ag water use to supply water for other uses • Urban • Domestic • Key ecological assets • Energy • In the face of • Recurrent Drought • Climate warming

40. Tentative answers • Better water measurement • Gauges • Tracking use by crop (application, ET) • Better water accounting • Current use patterns • Potential use patterns • Adjudications • Who has the senior/junior rights in the face of future supply variability. Important as drought/climate intensifies.

41. Thank you http://agecon.nmsu.edu/fward/water