Regulating Irrigation Water to Achieve Public Policy Goals in the Western San Joaquin Valley of California

The Western San Joaquin Valley of California, one of the nation's most productive agricultural regions, is characterized by crop farming via large-scale surface water irrigation, which necessitates drainage runoff to keep the resulting high and saline water table from damaging crops. However, this practice poses a serious environmental hazard, as evidenced by widespread waterfowl deaths attributed to toxins in drainage water in the mid-1980s. This research explores some economic aspects of a hydrologic solution to the drainage problem proposed by Gronberg and Belitz (1992), which recommends a pumped groundwater-applied surface water balance with a lower water table and thus no drainage runoff. We first consider a market pricing solution, i.e., what price for surface water, achievable through taxes or regulation, would induce optimizing farmers to choose such a balance, and discuss the associated cropping patterns, irrigation techniques, profitability, and water usage. We find that farmers' optimizing irrigation practice typically exhibits knife-edge behavior--small changes in prices result in wholesale switching from using all surface water to all groundwater, with little or no mixed-use range. We then explore regulatory imposition of pumped groundwater/surface water delivery ratios which approximate the Gronberg-Belitz recommended water budgets. We find that under several of the constraints, there are substantial reductions in surface water consumption, and while there exist profitable crop- irrigation technology combinations for farmers at all pumping lifts, the constraints may have large effects on the return to farm investment and lead to significant cropping pattern changes. The imposition of irrigation regulations requiring particular groundwater/surface water combinations is likely to face strong political opposition, and the success of such policies will depend crucially on their ability to meet these objections