Effects of economic and climatic factors on agricultural water use in arid regions

Throughout the arid American West, agriculture is the dominant consumptive use of water, with farming operations dependent on finite groundwater resources or limited surface flows for necessary irrigation. This study makes use of climatic, economic, and remote-sensed land cover data to model those factors that contribute to farmers’ water use decisions in central Arizona. Growers’ water needs are met through a combination of groundwater, Colorado River water delivered via the Central Arizona Project, and additional surface flows. The modeling approach presented is applicable to a wide range of agricultural communities that are dependent on irrigation for agriculture. This study specifically examines water deliveries to and irrigation intensity within irrigation districts in central Arizona. Econometric analysis of integrated panel data finds that climate, the prices of December cotton (Gossypium hirsutum L.) futures, water costs, and fallowed land area have significant impacts on at least one of the two outcomes of interest. Understanding irrigators’ water use decisions is useful to those concerned with the impact of water availability on local economies, ecosystems, and aquifers.