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<br />C;> <br />Q <br />IJI <br />~I <br /> <br />considered transfer payments ameng members of the economy. They do not affect <br /> <br />project affic fency and are d1sregarc:ed in economic efficiency analY5~s of <br /> <br />pub11c investments (M1shan :70). <br /> <br />Sllho:;1d17~nQ Trl"1gA+1nn T-rrn"...",,,,,.c. The U.S. ConGress has aut:"lor1zeCl the <br /> <br />Soil Conservation Service to subsidize on-farm irrigation system 1mprove~ents. <br /> <br /> <br />This approaCh can be evaluated by varying the proportion of annual irrigation <br /> <br />system improvement capital costs pafd by the farmer and the federal government. <br /> <br /> <br />The percentage of capital costs paid by the government was parametrically <br /> <br />increased from zero to 90$ in lCS increments. The resulting effects on salt <br /> <br /> <br />discharge. 'tl'ater use, and net income are dfsplayed in part A of table 2. The <br /> <br />value of labor and water saved mus'! exceed the farmer's share of sy5tem <br /> <br />improvement costs before a change in farming practices ..ould occur. Farm net <br /> <br />1ncome thus increases with every chanSe. and the Government incurs a <br /> <br />corresponding increase in program costs. <br /> <br />The subsidy approach is limited because the economic incentive is not <br /> <br />aimed directly at reducing salt discharges. The subsidy encourages capital <br /> <br />invest:r.ent to save water (and labor). wtl1ch indirectly reduces salt loads. <br /> <br />This l1nkage means a loss of effectiveness because water and labor conservation <br /> <br />do not correlate exactly with reducing salt discharges. Further, the subsidy <br /> <br />approach, as presently being implemented, on1)' encourages capital-intensive <br /> <br />epproaches to salinity control, thus creating a bias against labor-fntensive <br /> <br />methods. <br /> <br />A Hvcothet1ca1 Tax on Salt 01scharces. An effluent tax on salt cischarges <br /> <br />is the most a1locatively efficient approach. <br /> <br />Hewever since the salt is <br /> <br />embodied in nonpoint irrigation return flows. measurement problems ..oulc occur <br /> <br />and monitoring the actual salt discharge frem each field or est1Clat1ng average <br /> <br />1l <br />