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Economic Assessment of Pluvial and Irrigation Runoff Recycling to Stop Aquifer Depletion in the Mississippi Delta
Proceedings of the 2022 Mississippi Water Resources Conference

Year: 2022 Authors: Quintana N.

We explore the economic merits of on-farm water storage with tail-water recovery systems to reduce aquifer depletion in Sunflower County, MS—a region with expanding irrigated acreage and substantial off-season precipitation. Optimal management gain potential is substantial on a broad scale and long planning horizon, including more than $4 billion in producer surplus, 5 million acre-feet of conserved groundwater, and land capitalization of $24 per acre. Sensitivity analyses provide insights with respect to the impact of discount rates, rainfed returns, return flows, and aquifer recharge rates. The main contrast between our framework and previous analyses of On-Farm Storage economics is that we assess its merits over the net present value of the stream of profits over the life of the aquifer while previous studies employ a seasonal profit maximization framework over no more than 30 years of planning horizons. The insight of a long planning horizon is that it exploits the high recovery value at the end of the infrastructure useful life (the more cycles the relatively cheaper it is to maintain). The optimization over the life of the aquifer rather than over each period brings to account the merits of conservation: a reduction in groundwater used today results in cheaper pumping costs in the future, an effect that is lost in myopic optimization. Results can inform stakeholders about the optimal allocation of funds directed at agricultural practice adoption and agricultural water investments.

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