Wyoming State Water Plan, Wyoming Water Development Office
Rafting on Snake River Lake Marie, Snowy Mountains Wyoming Wind River Range picture

EXECUTIVE SUMMARY

On August 1, 1992, the Metropolitan Water District of Southern California (Metropolitan) initiated the Test Land Fallowing Program (Program) with farmers within the Palo Verde Irrigation District (PVID). The two-year agreement worked as follows: Program participants could enroll up to 25% of their productive acreage in the Program in exchange for a per enrolled acre payment of $1,240; enrolled acreage was then left fallow and not irrigated for two years; water savings were calculated and credited to Metropolitan. In total, 20,215 acres-roughly 22% of the valley's cultivated acreage-were enrolled in the Program. Program payments totaled approximately $25.1 million.

Program participants were surveyed at the end of the first and second years of the Program to evaluate farm level adjustments and costs associated with Program participation. The results of these surveys are reported in Great Western Research (1993; forthcoming).

The purpose of this study is to evaluate the economic impacts to Program non-participants such as local businesses providing farm services or supplies, as well as the Program's overall impact on the regional economy. Reported findings are based on telephone and field interviews and survey of local retail and wholesale businesses and community officials; crop budget analyses of changes in input purchase patterns; and analyses of regional quarterly sales tax and monthly employment data.

The principal findings of this study are as follows:

Employment losses caused by the Program also were found to have concentrated within farm-related businesses. Overall, four of five surveyed firms providing farm services or supplies characterized the Program as a primary, though not necessarily the only, reason for reducing employment between 1992 and 1994. These firms reduced full-time employment by a total of 25 jobs and part-time/seasonal employment by seven jobs over the two-year period.

While the Program did not negatively affect the overall performance of the local economy, it did result in concentrated impacts on a few businesses providing farm services and, to a lesser extent, farm supplies.