Brief Summary of Minutes of Annual Meeting

The following served as officers for the year: (Chair) Jeff Peterson, KSU, (Vice-Chair) Eric Schuck, CSU, and (Secretary) Brian H. Hurd, NMSU. The second annual meeting of the W-1190 regional project commenced Monday morning at 8am at the La Quinta Inn in Las Cruces, New Mexico. 1. Welcoming words and introductions were given by Jeff Peterson and Brian Hurd. 2. Next, Fen Hunt provided a summary of activities at CSREES, highlighting recent events and meetings and information on upcoming NRI funding opportunities. Glenn Schaible mentioned efforts underway to integrate USDA survey efforts (CEAP and ARMS) within the NRI and highlighted materials available at the website: http://www.usawaterquality.org/ Brief discussion was given concerning the Domenici water science bill that could funding opportunities coordinated through selected national laboratories. 3. LeRoy Dougherty then spoke about the activities of the Western AES directors, and emphasized the report filing requirements. Reports should identify progress against stated milestones and highlight outcomes and impacts (even if just potential). Progress reports need to be filed within 60 of the annual meeting, in our case, by December 15, 2005 and should be brief and provide summary bullets. 4. Brief reviews of project activities and progress were given: Product 1-Soil Salinity Measurement Methods to Rapidly Monitor the Impact of Basin-Scale Water Management Decisions. Wyatte indicated the impact that Grant Cardons departure to Utah has had on this project and its evolution. He noted the work that had gone on in the development of salinity impacts within the EPIC model using the Bessler, McNeil, and Carter book on Saline and Sodic Soils. Eric added on the design and development of survey work on salinity problems in the Arkansas Valley and along the Uncompahgre River. Brian noted interest in joining the effort and a project just underway to examine salinity and irrigation along the Rio Grande. Product 2-Farm-Size Characteristics, Economics, and Institutions are Central to the Design of Agricultural Water Conservation Programs. Glenn described efforts to examine the FRIS data using SAS, modeling such things as endogeneity of land and water application rates. Development of an econometric farm structure model with CS Kim was also discussed to highlight changes in farm structure. Product 3-Effects of Water Policy on Agricultural Production Risks. Glenn also described the status of the RMA funded projects, in Noels absence. He indicated the results summary is completed and available from the farm foundation website. Phase 2 involves a survey of the W-1190 members for the identification and characterization of high conflict potential in water across the various represented regions. Work is needed to develop and implement the questionnaire keying on high priority conflicts, federal and state roles, the parties at risk, and the impact of federally imposed restrictions. The survey will be drafted by Bob Hearne with comments and support by other committee members. The following URL was provided for possible resources regarding funding and useful links (site is from the Northeast regional association of experiment station directors): http://www.agnr.umd.edu/users/nera Product 4-Water Allocation Laws and Procedures in the American West. Gopal made some comments about the possibility of a special issue on the topic of political externalities and water resource institutions. Discussion provided evidence for the groups interest and viability of such a topic, Gopal to explore possible options for developing papers and providing a forum for presentations. The committee felt that prior research on western water institutions negated the need for additional effort to provide another survey of institutions. However further collaboration with special editions and conference papers will provide ample opportunities for the committee to meet its objectives with this product. Business Meeting Summary 1. Selection of Bob Hearne to the 2006 W1190 Secretary 2. The place and dates for the 2006 annual meeting of W-1190 were selected to be: Fort Collins (or vicinity) Tentative Date: October 15-18, 2006 3. Officers for the coming year were selected to be: Chair: Eric Schuck, CSU Vice-Chair: Brian H. Hurd, NMSU Secretary: Bob Hearne, NDSU

This report summarizes the goals and accomplishments of the above referenced regional research project as documented by members following the annual meeting in Las Cruces, New Mexico, October 17-19, 2005. The report consists of two sections. Part I discusses each of four research product areas and provides a description of product goals, present year accomplishments and impacts, and on-going activities over the coming year. Part II provides a listing of the published works over the previous year related to these product areas and related activities of the project membership. OBJECTIVES, ACCOMPLISHMENTS, IMPACTS, AND ON-GOING ACTIVITIES Water throughout the Western U.S. is central to both regional economies and environments. This collaborative research project focuses on the strategic mobilization of water across uses and sectors, in particular, those relating to irrigated agriculture-the largest water user in the West. Recent years have witnessed major changes in the technology, economics, and institutions that have a significant bearing on water, its use and its conservation. The overall research objectives are summarized as follows: Develop and evaluate alternative technologies to monitor environmental effects of water allocation and management Quantify comparative economic values of water in alternative uses Assess the effectiveness of alternative management institutions, laws, and policies for water allocation Consistent with these objectives, the project is comprised of four specific products that each contribute to one or more of the above objectives. Goals, accomplishments and impacts, and on-going activities are described for each product. Research Product 1. Soil Salinity Measurement Methods to Rapidly Monitor the Impact of Basin-Scale Water Management Decisions. Goals. Irrigation and salinity management challenges frequently coincide in Western watersheds. The goal for the product area is directed at improving the understanding of the relationships and interactions between irrigation quantity and quality, soil quality and salinity levels, land use and management, and economic productivity. At its core, this product aims to evaluate the farm and regional economic and environmental implications of alternative water-conserving management systems. Experimental data and model analysis includes sites in Texas, Colorado, and New Mexico. Because of personnel changes among the research members, the present goal reflects a slight shift in emphasis, as originally proposed, away from a specific examination of alternative farm-level technologies toward the analysis of farmer land use and management choices. Key Accomplishments and Impacts. Activities over the previous year have resulted in the following: The design and development of a farm-level survey conducted in the Arkansas Valley and along the Uncompahgre River. Analysis of data is currently underway but initial indications suggest that efforts to reduce and conserve water can have adverse effects on long-run farm-level productivity owing to the buildup of soil salinity. Long-run productivity requires an integrated approach to irrigation and salinity management. In Texas, Marek has identified potential sources and systems for obtaining soil salinity data; however, with the exception of test-plot data, such data are costly to obtain with suitability for modeling. Harman has used simulation methods using the CROPMAN model to develop simulated data sets which may be useful as an approximation for the subsequent modeling analysis. On-Going Activities. Over the coming year, collaborative efforts among researchers in Texas, Colorado, and New Mexico are focused on the following activities: Analysis and assessment along the Arkansas and Uncompahgre rivers of Colorado is expected to proceed led by Schuck (CSU). Hurd (NMSU) joined the research group this year and is evaluating potential data sites for the analysis of salinity problems along the Rio Grande of New Mexico and West Texas. Hurd (NMSU) and Harman (Texas A&M) will work to calibrate the CropMan model to simulate major crop yield effects associated with alternative salinity impacts for selected watersheds in New Mexico and Texas. Eric Schuck (CSU) and Tom Marek (Texas A&M) are researching salinity response using a watershed-based model for selected watersheds in Texas and Colorado. The research will address: a) possible mitigation strategies designed to reduce salinity build-up associated with water conservation; b) ground-truthing of salinity levels in selected watersheds; and c) linking the outcomes of mitigation strategies to ImPlan to evaluate secondary economic impacts. Research Product 2. Farm-Size Characteristics, Economics, and Institutions are Central to the Design of Agricultural Water Conservation Programs. Goals. Farm-size characteristics are an important consideration in the efficient and effective design of institutional programs. This effort provides for the empirical investigation of unique production, resource, technology, and water-management characteristics across irrigated farm-size groups for western irrigated agriculture. Using regional multi-product economic models to examine differential economic-cost structures by farm-size class, the goal is to reveal their unique resource adjustment and conservation potential under alternative water-conservation/institutional policy arrangements for western agricultural water supplies. More specifically, this product: 1) examines the influence of alternative land and water resource endowments, output and resource substitution possibilities, and farm irrigation production-technology differences on total economic-cost structures across irrigated farm-size classes; 2) examines the conservation effectiveness across farm size of acreage versus flow and information-based conservation program alternatives, and their implications for small farm versus environmental policy goals; and 3) examines the affect farm-size differences have on conservation willingness-to-accept values under alternative conservation program and institutional arrangements. Key Accomplishments and Impacts. Schaible and Gollehon (ERS) worked cooperatively with Hamilton (BoR) and NASS on: a) setting-up the 2003 FRIS both at the NASS Data Lab (in DC) and at NASS (in Denver); and b) using the 2003 FRIS to evaluate characteristics of BoR water users/use, including water values. This research will be continued by BoR-Denver. Schaible (ERS) and Supalla (UNL) have adapted a programming-based, multi-product restricted-equilibrium model to a multi-region area of North Platte Basin irrigated agriculture. This framework (currently in the calibration phase) incorporates crop-specific land and water, as well as crop water-application rates as endogenous variables. Water application rates are made endogenous through the use of crop-specific, nonlinear yield-ET relationships developed (and published) by Supalla and Martin, UNL. Calibration and policy analysis work will continue in 2006 on this research. Model results will eventually contribute to Objective 2 model development goals. Kim, et al. (2005), using a decomposed cost-function approach, developed a single-equation, decomposed negative binomial regression model of U.S. agriculture by farm-size class. Used to evaluate factors influencing structural changes in U.S. agriculture, the modeling framework is adaptable to meet Objective 2 goals. Schaible and Aillery (2005) examined several irrigation water-management issues, specifically: a) why irrigation water management is important to U.S. agriculture; b) the status of irrigation technology/water management use across the U.S.; c) the potential for improvement in irrigation water conservation; and d) the influence of farm size on irrigation water conservation and its policy implications. Schaible (along with an ERS 2004 CEAP-ARMS Team) have reviewed, edited, and established an ERS (in-house), research-usable data product for the 2004 ERS/NASS CEAP-ARMS data. CEAP-ARMS for 2004 is an integrated field/farm-level survey of 882 wheat producers across 16 States, integrating the production practice and NRI data from the USDA/NRCS Conservation Effects Assessment Project (CEAP) and the practice/cost-of-production/farm economic data from the ERS/NASS Agricultural Resource Management Survey (ARMS). ERS/NASS CEAP-ARMS data will be useful for Objective 2 research. Cooperative modeling research with Ray Supalla, UNL, not only allows for evaluating deficit irrigation as an endogenous optimal producer choice, but the research will contribute to development of a programming-based modeling framework for analyzing farm structure issues associated with USDAs irrigation water management/water conservation goals. Kim, et al. (2005) farm structure modeling provides an econometrically-based conceptual framework adaptable to evaluating farm structure issues associated with producer response to alternative water conservation programs. On-Going Activities. Cooperative research between ERS and BoR-Denver will continue to assist in the understanding of distributional issues associated with water use, and allow the BoR to improve its water allocation decisions during water-short years. Continued development of ERS/NASS CEAP-ARMS data, which provides a rich database for linking producer production practices, farm resource and producer characteristics, and farm economic data with field/farm-level environmental outcomes. While for 2004, the number of irrigated-wheat observations in the sample were small (62 observations out of 882), the number of irrigated-farm observations for the 2005 CEAP-ARMS corn sample will likely be larger, providing a richer dataset for analyzing irrigated agriculture farm-structure issues. The scope of Product 2 was agreed by committee members to be expanded beyond farm-size/conservation issues to include addressing the effectiveness of alternative conservation programs. This broader product scope enhances product participation (from North Dakota, Kansas, and Idaho), incorporating such issues as conservation/climate change issues, local conservation perspectives of the Ogallala Initiative, and water banking/reallocation as components of conservation policy. The expanded Product 2 scope will require additional effort (from all participants) to integrate this work into a white paper (for a joint product contribution). Research Product 3. Effects of Water Policy on Agricultural Production Risks. Goals. Overall, this research will examine, in a comprehensive and systematic manner, the concept and implications of the idea that irrigation water supplies can be interrupted as a result of policy decisions, which are independent of traditional runoff-based interruptions. The comprehensive nature of this research includes both the identification and examination of alternative mechanisms to manage the risk of policy-induced water supply shortfalls from a producer, State, and Federal perspective, as well as recognizing the impact of such risks on alternative water values. The specific tasks for achieving these objectives are to: 1) identify the location and scope of irrigated agriculture that would be most likely to face reduced water supplies as a result of water policy decisions; 2) quantify the likelihood of reduced water supplies from policy decisions, or determine needed data for quantification; 3) investigate alternative mitigation mechanisms to determine who acquires the risk, and who bears the cost; and 4) investigate the institutional feasibility of alternative mechanisms, given the current legal and institutional environment of western water law and policies. Key Accomplishments and Impacts. Schaible, et al. (2005) summarizes the proceedings of the May 24-25, 2004 ERS/Farm Foundation workshop on the economic impact and policy responses associated with the increasing risk of Federally-induced water-supply shortfalls that limit irrigated production during water-short years. Workshop presentations/discussion included a range of topics, including: a) estimation methods and associated values of agricultural production losses from reduced water supplies; b) alternative mechanisms to mitigate agricultural risk associated with uncertain supply and demand for water; c) institutional issues concerning law, water systems, and financial markets; d) stakeholder concerns, including environmental, water user, and state government perspectives; and e) the future Federal role in the mitigation of water supply risk for irrigated agriculture. The workshop program included presentations by W1190 participants from ERS, Nebraska, Oregon, Texas, Washington, and California. The workshop conducted by ERS and the Farm Foundation on agricultural risks in a water-short world provided a Washington, DC policy forum for interaction among those concerned with farm-level responses to water shortages and those concerned with policy and institutional responses to reduced water availability. The workshop summary report on the Farm Foundation website (see Schaible et al. 2005), highlights the workshop's policy impact through the programs numerous policy discussions/interactions with Federal/State and stakeholder policy decisionmakers. On-Going Activities. Phase 2 will proceed with a survey of the W-1190 members for the identification and characterization of high conflict potential in water across the various represented regions. Bob Hearne, NDSU, agreed to take leadership on this with participation from WSU, and ERS. Research Product 4. Water Allocation Laws and Procedures in the American West. Goals. The goals for this product have evolved in consideration of the committees desire to produce a more directed and focused outcome and impact, to avoid redundancy with existing documents (e.g., the survey of water institutions developed by Dr. Larry MacDonald), and the heightened utility of a cross-cutting examination of the political economy of water demands and institutions throughout the West. The current goal aims to develop a framework for the examination of political influences and consequence of water use, rights, and infrastructure. A case study approach is envisioned that will culminate in a conference session and either a book or special issue on the subject of political externalities and Western water resources. Gopalakrishnan (Hawaii) is agreed to facilitate the development of this product along with the cooperation of selected and interested committee participants for the selection of key case study examples. This effort will complement the Phase 2 efforts under Product 3 in its survey of water resource conflict potential. Key Accomplishments and Impacts. Publication of a special issue of the International Journal of Water Resources Development on the theme of Water and Disasters (co-guest edited by Gopalakrishnan -- Volume 21, Number 4 / December 2005). This thematic issue features the contributions of several members of the W-1190 and has expanded the scope of our work on water- related disasters such as floods and droughts which have been occurring fairly frequently in the participating states. The findings and conclusions emerging from the study of the serious water situation facing Hawaii should assist the Hawaiian Water Commission, Office of State Planning, State of Hawaii Tourism Authority and the Honolulu Board of Water Supply, among others, in developing an informed and effective water policy to address the critical residential water demand facing Hawaii. The 2005 American Water Resource Association meetings included presentations from several W-1190 members. A special session on water institutions in the western United States, organized and conducted by W-1190 members, provided a valuable contribution of both economic analyses and institutional review for this special conference on watershed managment. Research in Hawaii attempted to identify the weaknesses in Hawaiis water laws and institutions that severely limited the flexibility of water transfer from surplus agricultural water to other uses, especially residential, in terms of a case study of the Waiahole surplus water resulting from the closure of a major sugar plantation involving 27 mgd of water. The allocation of this surplus water among high-priority water users and uses, in particular residential, recreational, and in-stream uses, was fraught with difficulties and riddled with conflicts because of the lack of well-defined rules and laws governing such inter-sector water transfer. Legal and institutional changes that could facilitate the transfer process and significantly reduce such conflicts were studied and policy options to implement them were suggested. On-Going Activities. Efforts will continue to assemble summaries of existing presentations of changing water institutions (including presentations for the two meeting identified above) and comparing the results with the previous report by Larry MacDonald on water institutions. This will provide for a survey paper as a prelude for the case studies. Future research efforts will focus on the political externalities of water institutional change. Outputs will likely take one of two forms: 1) eight or nine papers addressing various aspects of political externalities for a Special Issue of the International Journal of Water Resources Development (IJWRD); and 2) a book plan consisting of a series of chapters addressing political externalities associated with water institutional change. Gopalakrishnan (Hawaii) will engage book plan discussion with Springer Publishing. W1190 members will then be solicited for book chapter contributions. Related Work on Water Quality Conducted by USDA ERS in Cooperation with the Committee Several ERS research outputs examine the implications of market versus regulatory policies designed to reduce agricultural-induced environmental quality impacts associated with nitrogen and animal-waste loadings from several policy perspectives, including their multi-media impacts. Ribaudo, et al. (2005) assessed the economic and environmental tradeoffs across the multi-media nature of animal-waste pollution abatement. These authors addressed the issue from both a farm-level (hog farms) and a national-level policy perspective, including addressing potential implications of adding air-quality regulations to existing Clean Water Act regulations (in the Chesapeake Bay watershed). Ribaudo, et al. (2004) examined the impacts of establishing nitrogen discharge credit trading to reduce agricultural nitrogen loads contributing to hypoxic and anoxic waters of the northern Gulf of Mexico. Johansson and Moledina (2005) used a game-theoretic approach to examine the impacts of producer strategic behavior in the face of asymmetric information on pollution abatement costs associated with fees or tradable permits used to reduce point and nonpoint source phosphorous discharges. Johansson, et al. (2005) examined the impacts of trade liberalization with special attention devoted to environmental quality impacts in the presence and absence of non-degradation environmental standards. Aillery, Gollehon, and Breneman (2005) provides technical documentation for a regional-based, nonlinear mathematical-programming model of animal manure-nutrient production and distribution (applied to the Chesapeake Bay watershed). This model is designed to assess regional costs of manure management, transport, and land applications, given the existing structure of the animal industry and manure-storage technologies in use. Ribaudo, et al. (2005) (1) extends the impacts of animal waste management to both air and water quality; (2) draws-out the broader national-scale impacts of multi-media pollution-abatement policies, including long-term structural adjustments and welfare impacts on producers and consumers; and (3) contributed directly to policy implications of adding air-quality regulations to existing Clean Water Act regulations. Ribaudo, et al. (2004) demonstrated that a nitrogen-reduction credit trading program (between agricultural nonpoint and point sources) would reduce the cost of nitrogen control and nitrogen discharges. Results show that a substantial degree of credit trading could affect agricultural commodity prices, and thereby affect agricultural production/pollution outside the basin. Johansson and Moledina (2005) show that fees and tradable permit policies, to be successful, must account for producer strategic behavior given producer-based asymmetric information on pollution abatement costs. Aillery, Gollehon, and Breneman (2005) demonstrate the policy importance of accounting for spatial interactions involving animal concentrations and land available for manure spreading that can significantly affect manure land application costs faced by animal producers.

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