AN ECONOMIC EVALUATION OF THE COLORADO RIVER BASIN SALINITY CONTROL PROGRAM



Gardner and Young


Salinity Control Evaluation

pliers), into their total estimates of dam-
ages avoided. We take the contrary
position, argued forcefully by McKean and
others, that secondary impacts are not
properly included in appraisals with a na-
tional economic efficiency criterion. Since
the alternative public or private expendi-
ture of funds invested in the project in
question would themselves generate sec-
ondary impacts elsewhere in the econo-
my, secondary impacts represent no real
net gain to society. Further, in this partic-
ular instance, the secondary impacts
claimed in the federal analysis appear to
be incommensurate with strict willingness
to pay benefit and cost measures, in that
they are not measures of
net indirect in-
come, but are estimated
gross indirect
monetary impacts. Finally, the federal
analysis of secondary impacts is inconsis-
tent, in that only the agricultural-related
impacts are claimed. Secondary impacts
for the household sector similarly ana-
lyzed would be negative, reflecting re-
duced household outlays for salinity-in-
duced benefits. If a symmetric approach
were taken, the negative urban secondary
effects would swamp the positive second-
ary impact from agriculture.

Total Benefits of Salinity Control

Combining annual agricultural benefits
of $39,100 per mg∕liter with annual mu-
nicipal benefits estimated at $218,700 per
mg∕liter, we obtain a total salinity control
benefit estimate of $257,800 per mg∕liter,
or about $26 per ton of salt removed from
the river.

The Bureau of Reclamation estimate of
$513,300 per mg∕liter (USBR, 1983:21)
when updated to 1982 dollars converts to
$51.90 per ton of salt removed from the
river. USBR benefit estimates per ton of
salt removed are nearly twice as large as
those of the authors. Most of this differ-
ence is accounted for by our discounting
for retention time and not including sec-
ondary benefits.

Economic Feasibility of Salinity
Control

The revised salinity control benefit es-
timates can now be compared to govern-
ment estimates of the cost of salinity con-
trol efforts. Economic feasibility here
means that real economic benefits exceed
real economic costs, both measured in uni-
form annual equivalents.

SCS On-Farm Projects

The Soil Conservation Service is active-
ly engaged in planning and implementing
on-farm irrigation improvement pro-
grams for salinity control in several areas
of the Upper Colorado River Basin. Cost
and salt reduction estimates were avail-
able for nine salinity control units. Each
relies on irrigation system improvements
to reduce deep percolation and salt load,
though some units include the lining of
off-farm irrigation laterals.

Our benefit estimates are compared to
the SCS estimates of costs in Table 3. Non-
discounted benefits and costs are shown,
together with their present values as if all
units began construction this year and
were completed according to SCS time-
tables. Total costs were assumed to be in-
curred at the same rate as construction
costs. Salt reductions were assigned in the
same proportion as costs and at the end of
the year costs were incurred. This is a gen-
erous assumption since not all construc-
tion may be finished in one year, and some
irrigation improvements may take time to
deliver their full benefits. Using our ben-
efit estimate of $26 per ton, only three of
the nine SCS salinity control programs are
feasible.

These SCS project benefit-cost ratios are
Understimated in that irrigation labor sav-
ings resulting from on-farm improve-
ments have not been counted. Such re-
ductions in associated costs would normally
be subtracted from program costs to get a
net social cost of salinity control. Our re-



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