Agriculture and endangered species: An analysis of trade‐offs in the Klamath Basin, Oregon

Abstract

In 1988 the U.S. Fish and Wildlife Service, under provisions of the Endangered Species Act (ESA), declared two fish species in the Klamath Basin as endangered and mandated minimum water levels in Upper Klamath Lake to protect habitat for these species. The lake is the key hydrological feature of the basin; inflows and lake storage provide irrigation water for over 220,000 acres (890.34 km2) in the area. The ESA lake level restrictions reduced both expected average irrigation water supplies and the capacity of the lake to stabilize water supplies during drought cycles. This research explores trade‐offs between lake levels for fish protection and the profits of farmers under a range of lake level and farmer adaptations. The results indicate that farmers can adjust their irrigation decisions to offset some of the water supply reductions. However, there are costs to agriculture. The expected average cost of maintaining ESA lake levels (estimated over 73 water years) is approximately $2 million annually; for severe drought years, annual costs exceed $15 million or about 60% of average farm profits. The steeply increasing marginal cost curve shows an increasingly heavier economic burden to agriculture as lake level restrictions increase.