EMERGING AGRICULTURAL WATER CONSERVATION PRICE INCENTIVES

Recent Bureau of Reclamation policies encourage or require irrigation districts to adopt price conservation incentives. Using unpublished survey results and new district-level information, we examine the rate structures and incentives of district water pricing. Our findings reveal that the majority of districts use fixed charges independent of the quantity of water delivered and that most conservation rate structures recently implemented are designed so that the first tier quantity allocation satisfies most crop water needs. Although other district management objectives may be satisfied, price incentives are diminished or nonexistent. The question of whether conservation is being achieved is tautological and depends on how each district defines conservation.
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Michelsen, Ari M.; Taylor, R. Garth; Huffaker, Ray G.; McGuckin, J. Thomas, EMERGING AGRICULTURAL WATER CONSERVATION PRICE INCENTIVES, Journal of Agricultural and Resource Economics, Volume 24, Issue 1, July 1999, Pages 222–238

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