Economics ETDs

Publication Date



The demand for water is increasing in the western United States. Coupled with growing emphasis on development of the western resources, the scarcity of water will create an expanding competitive market by industrial, municipal and agricultural users. New Mexico is faced with a question of how many more people it can support on its limited future supply of water. A change in water use must develop if New Mexico is to expand in population. This means less water for irrigation and more water for municipal use. The farmer cannot outbid industries or cities for this scarce resource. As water allocations to the agricultural sector are reduced, policymakers are concerned with the ramifications for irrigated agriculture. This thesis analyzes the technical impacts of reduced water allocations on the Estancia Basin in New Mexico. A linear program model was used to maximize net farm income in a given time period subject to annual water-use, irrigated acres, crop yield, irrigation technologies and a pipeline constraint. Technical impacts allow for the continued viability in the area. The first set of these impacts include shifts in crop patterns, lower water-use intensities and a shift to more efficient water distribution systems. Secondly, "land retirement" is a strong possibility with water reductions in excess of 30%. Finally, losses in net farm income and regional incomes rise at an increasing rate as reductions in water allocations increase. Constant gross farm income was used for a measure of regional stability. It is with this measure that an "iso-gross income curve" was constructed to measure the rate at which irrigation capital is substituted for water. A continuous equation by the least squares of a polynomial was constructed to measure the substitution. Results of this thesis suggest that a 1% reduction in water-use implies a 2.85% increase in capital stocks for gross farm income to be maintained at the current level.

Degree Name


Level of Degree


Department Name

Department of Economics

First Committee Member (Chair)

Ronald G. Cummings

Second Committee Member

Shaul Ben-David

Third Committee Member

Gerald J. Boyle



Document Type


Included in

Economics Commons