Economic Impact of Water Allocation on Agriculture in the Lower Chattahoochee River Basin

The relative value of irrigation water was assessed for three important crops (corn, cotton, and peanuts) grown in the southeastern United States. A decision tool was developed with the objective of allocating limited available water among competing crops in a manner that would maximize the economic returns to the producers. The methodology was developed and tested for a hypothetical farm located in Henry County, Alabama in the Chattahoochee river basin. Crop yield - soil moisture response functions were developed using Monte Carlo simulated data for cotton, corn, and peanuts. A hydrologic model was employed to simulate runoff over the period of observed rainfall the county to provide inflows to storage facilities that could be used as constraints for the optimal allocation of the available water in the face of the uncertainty of future rainfall and runoff. Irrigation decisions were made on a weekly basis during the critical water deficit period in the region. An economic optimization model was employed with the crop responses, and soil moisture functions to determine the optimum amount of water place on each crop subject to the amount of irrigation water availability and climatic uncertainty. The results indicated even small amounts of irrigation could significantly benefit farmers in the region if applied judiciously. A weekly irrigation sequence was developed that maintained the available water on the crops that exhibited the most significant combination of water sensitivity and cash value.