The Role of Land Retirement Programs for Management of Water Resources

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water use to 0.85 (Neibling, 1998). We use this information to calibrate a constant elasticity
function to relate the efficiency with the furrow irrigation to that with the sprinkler irrigation as
α_2i = δ_i^0.318 .

In the empirical application, we focus on the implications of land retirement programs for
a given year, rather than determining the time paths of cropland to be retired. We assume that the
water planner’s problem is to achieve the water quantity goal in one year (i.e., N=1 in the
theoretical model). We solve the decision problem in a two-stage framework. We first determine
the optimal groundwater use for each farmer. We then determine the optimal allocations of land
among various crops and analyze the implications of land retirement programs.

4. Results

We first determine the optimal cropping and rotation practices in the region to provide
the base model results. This model maximizes the total returns in the region subject to the land
availability constraint for each farm to determine the optimal cropping and rotation practices as
well as the optimal water use for each farm. The results from this model will be compared to the
land retirement policies to be developed below. Table 1 summarizes the acreage allocated to the
irrigated and non-irrigated crops in each county in the ESPA. The farm-level rotation practices
are aggregated to obtain the county-level land allocated to the irrigated and non-irrigated crops.
The common optimal rotation practices followed by the representative farms with the rotations
ranging from 2 to 7 years include alfalfa/potatoes/corn silage/wheat or barley,
alfalfa/potatoes/wheat/barley, barley/wheat/potatoes, corn silage/wheat/potatoes, wheat/barley
barley/corn/potatoes, barley/potatoes/beans, and wheat/alfalfa/barley. The total land allocated to
the irrigated and non-irrigated crops are close to the actual land use in 2002. Thus, our base
model replicates the existing farming conditions in the ESPA very well.

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