Water trade‐off between electric energy and agriculture in the four corners area

Abstract

The results of estimating the economic impact of the growing electric generating sector on agriculture are given. A linear programing (LP) model was designed to represent agriculture in three subregions and the Navajo Indian Irrigation Project. The assumption was made that the electric generating sector will purchase water from farmers. The impact of shifting water from agriculture to the electric generating sector was evaluated by reducing the water allocation for agriculture at discrete steps, and after each reduction the LP model was run. Changes in the shadow prices of water, farm income, and employment were calculated after each linear programing run. Regional multipliers (at the county level) were applied to gauge the impact on the regional economy. It was concluded that commercial farms would be able to sell water to the energy sector by switching from flood irrigation to sprinklers. Part‐time farmers would reduce their cultivated acreage. Farmers would need relatively large funds to invest in sprinklers. For the utilities the cost of the water would be relatively insignificant.