Returns to Public Irrigation Development and the Concomitant Costs of Commodity Programs

Abstract

Development of agriculture, and associated agricultural problems, have had a prominent place in congressional deliberations virtually throughout the history of the United States (Benedict). Early policy stressed land development, and the Reclamation Act of 1902 was in such spirit. It was An Act Appropriating the receipts from the sale and disposal of public lands in certain States and Territories to the construction of irrigation works for the reclamation of arid lands. With later modifications of policy to provide greater sources of income for works construction, Congress continues to support the Bureau of Reclamation's water development, output increasing activities. Yet, since 1929, with time out for war, the federal government also has effected commodity programs designed to reduce the supply of major agricultural commodities so as to maintain product prices at levels that would be above the market price in a free and reasonably normal market situation(Benedict, p. 517). Such a situation would tend to strike most economists as peculiar (inefficient). Howe and Easter estimated the annual costs of commodity programs directly related to reclamation irrigation in the range of $83 million to $179 million during the period 1944 to 1964 (p. 143). Some of the facts generated by these apparently contradictory policies are the subject of this paper.