Federal Commodity Programs and Returns to Irrigation in the West

This report examines the impact of Federal commodity programs on returns to irrigation in the western United States. Returns to irrigation are defined as average returns to land, management, fixed capital, and water (above variable water cost), net of returns to dryland crop alternatives. Commodity market returns and program revenues per unit of applied irrigation water are estimated by field crop and subregion. Two representative study years - 1984 and 1987 - highlight the effect of differing commodity prices and program support levels under extreme market conditions. Aggregate returns to irrigation in western field-crop production were fairly constant over the two study years, averaging $33 per acre-foot of water. Program revenue contributions per unit-water were highest in the Southern and Northern Plains, and lowest in the Northern Mountain and Northern Pacific regions. Commodity programs had the greatest impact on returns to irrigation in rice and cotton production. Program contributions had the greatest impact on returns to irrigation in rice and cotton production. Program contributions per unit-water were relatively low for the major food and feed grains in 1984; contributions increased significantly with expanded deficiency payments and program enrollment in 1987. Under less favorable market conditions, positive returns to irrigation were largely dependent on commodity program supports. Commodity policy reform increases opportunities for water conservation in western irrigated agriculture.