Agricultural Economics Department


Date of this Version

November 2006


Published by University of Nebraska - Lincoln


For several decades Nebraska has proudly and appropriately regarded irrigation development as an important source of economic growth. However, in some parts of the state we now have too much of a good thing! To meet our Compact obligations to Kansas and Colorado in the Republican Basin and to comply with the proposed Cooperative Agreement for the Platte Basin we must find a way to consume less irrigation water. The cost of reducing irrigation and the equity implications will depend on what methods the state uses to achieve this objective.

We recently estimated the costs to irrigators and to the state budget of using different policies to reduce consumptive use (CU) of irrigation water in the Platte and Republican Basins (Supalla, 2006). The policy methods considered were: leased retirement of irrigated land using a willing buyer-willing seller approach; required land retirement with lease payments equal to actual producer losses; retirement of irrigated land by purchasing water rights using a willing buyer-willing seller approach; forced permanent retirement of irrigated land with compensation equal to actual market value; allocation with 100 percent producer compensation; and allocation with 50 percent producer compensation. Both long and short-term programs were considered with the reduced consumptive use occurring at different locations within each basin.