Policy Instruments and Agricultural Water Allocation in the Bow River Basin of Southern Alberta

In Southern Alberta, agriculture is the largest water user. Thirteen irrigation districts plus numerous private irrigators hold licenses to withdraw more than 75% of the available surface water. Water use decisions made by farmers in irrigation districts have significant impacts on the productivity of water use and on environmental outcomes (instream flow needs) throughout the South Saskatchewan River Basin (SSRB), especially during periods of drought. The objective of this paper is to investigate current and alternative water allocation strategies and their effects on crop choices with a focus on the irrigation districts in the Bow River Sub-basin of the SSRB. A mathematical programming model is developed to optimize economic returns from crop production, subject to specified restrictions imposed by water supply, institutional and hydrological conditions, production technology and land characteristics. Positive Mathematical Programming is used for model calibration with data from 2002-2003 provided by Alberta Agriculture Food and Rural Development. This research provides an explicit framework for the design and comparison of water policy options in Southern Alberta. The findings provide information to address the twin objectives of increasing the productivity of agricultural water use and meeting the environmental flow requirements of the Bow River Basin.