Abstract: The first of a continuing series.

THE AGRICULTURAL VALUE OF ELEPHANT BUTTE
IRRIGATION WATER IN DO_A ANA
AND SIERRA COUNTIES

Changing demographics in the West have thrust water policy into the focus of  intense public scrutiny. Municipalities are demanding access to larger shares of the limited resources of water as farm acreage shrinks and urban areas expand. Environmental lawsuits related to the Endangered Species Act, initiated by special interest groups, demand access to limited surface water resources. Federal and State agencies have been working to change the policies that have allowed exclusive agricultural access to New Mexico state surface water resources. The intent is to open market access and impose environmental habitat applications. One issue is the fair market pricing mechanism from which to begin water contract pricing and compensation considerations. The other issue is what are the community economic impacts from proposed environmental projects. The objectives were:
·   to determine a fair market price of surface irrigation water based on the historic economic benefits derived from agriculture;
·   to determine the community economic impacts from agriculture;
·   to determine the community economic impacts from proposed decreases in farmland utilization from environmental projects.
          It was concluded that: 1) the weighted average value of Elephant Butte Irrigation District water combined with 1997 weighted average crop acre foot water cost of $17.93 was $107.97 per-acre foot based on net operating profits and $93.90 per-acre foot based on return to land and risk; 2) annual average community economic impacts from surface irrigated agriculture was $375.9 million and; 3) conservative economic estimates for 2 environmental proposals would each cause a potential annual average loss of $48.4 and $124.0 million (respectively) to the agricultural sector.