Implications of Groundwater Conservation Policies: An Economic Analysis

More than 90% of the water used in agriculture in the High Plains area comes from the Ogallala Aquifer. From 1994 to 2004, the aquifer declined at an average of 1.28 feet per year. Adding to the problem is the low recharge rate of the aquifer in the High Plains area. Declining availability of water from the Ogallala Aquifer in the Texas Panhandle has forced the water management and conservation authorities to find viable policy options to extend life of the Ogallala Aquifer without affecting regional economy. The results from each policy alternative are compared to evaluate the effectiveness of each policy in conserving water, the changes in producer revenues and the usage of resources for each county and for the overall region, and the economic impacts of each policy. The analysis can be used to help policy makers determine the overall impact of each policy under consideration, both in terms of the effectiveness in conserving groundwater in the Texas Panhandle and the economic costs at the farm, community, county, and regional level. The rural communities where agriculture is most reliant on irrigation will be the most affected by the policy, while urban communities and those communities in counties that are less reliant on irrigation will absorb the change more easily. All of these concerns must be addressed when deciding on any policy designed to restrict water used for irrigation.