Open AccessThe Economics of Local Enhanced Management Areas in Southwest Kansas
Author(s) -
Golden Bill,
Guerrero Bridget
Publication year - 2017
Publication title -
journal of contemporary water research and education
Language(s) - English
Resource type - Journals
eISSN - 1936-704X
pISSN - 1936-7031
DOI - 10.1111/j.1936-704x.2017.03262.x
Subject(s) - groundwater , revenue , value (mathematics) , aquifer , natural resource economics , cumulative effects , water resource management , agricultural economics , business , agriculture , production (economics) , economics , environmental science , geography , microeconomics , mathematics , ecology , statistics , geotechnical engineering , accounting , archaeology , engineering , biology
The purpose of this research is to provide input into the water planning process for select subareas in southwest Kansas. Stakeholder input suggests that a reduction in groundwater use may be desirable in order to preserve the Ogallala Aquifer and extend its economic contribution to both the producer and the regional economy. In an endeavor to define the benefits and costs of water conservation policy, this research estimates measures of producer net profits and regional value added and places a monetary value on the conserved groundwater. The results of the models that assume the goal is to maximize producer profits, suggest that the Local Enhanced Management Areas (LEMAs) framework of groundwater management will provide benefits to both the agricultural producer and rural communities. Subarea 1 will receive the greatest benefit, increasing cumulative net revenue by 6.3%, while Subareas 2 and 3 increase cumulative net revenue by 2.1% and 2.7%, respectively. The results suggest that generally, the rural economy receives as much, if not more, benefits from groundwater conservation than the agricultural producer. Subareas 1, 2, and 3 generated 8.3%, 2.7%, and 1.8%, respectively, more cumulative value added under the LEMA scenario as compared to the Status Quo scenario. If Subarea 3 were to manage their groundwater based on implementing a LEMA plan and maximizing value added, cumulative value added would increase from a 1.8% gain to an increase of 18.7%.