A Multicrop Production Model of Irrigated Agriculture, Applied to Water Allocation Policy of the Bureau of Reclamation

Abstract

Recipients of irrigation water from the Bureau of Reclamation (BuRec) face a future of water conservation. By formally modeling surface water as a fixed, allocatable input to a multioutput firm, this research captures the institutional constraints governing water allocation and , simultaneously, establishes a cohesive approach to analyzing the production effects of BuRec allocation policy. Econometric results show that BuRec-served irrigators' crop supply and land allocation decisions are generally inelastic with respect to the water constraint. Using the elasticities, a policy simulation of a 10% reduction in BuRec water allocation indicates that production response to reduced water supply would affect the national price of three of ten major crops produced by BuRec-served farms.

Keywords

• fixed, allocatable water
• multioutput production
• reclamation water policy