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ECON<liIIC AND FINANCIAL ANALYSIS Annual Project :Benefits Water Salvage All waters to be salvaged can be beneficially used as described under the section heading, "Need for Water Salvage. " Water salvaged from this project can be used in conjunction with water salvaged from the Closed 13asin Division, San Luis Valley Project, Colorado, as a credit to Colorado to achieve debit-free status under the Rio G:ra.nde Compact. In the vicinity of the Mosca-Sargent area, a potential use exists for an estimated 11,500 acre-feet of salvage water for supplemental "irrigation. However, before this area can be included as part of the project plan, studies will have to be undertaken to determine the feasi- bility of furnishing a supplemental water supply to these lands. 1'he land is generally deSignated Class 5 due to drl'tinage problems, and is recognized as a marginal irrigated area. Although these problems exist, it is believed further studies will indicate the lands can be succussf'ully irrigated if drainage facilities a.re provided. Thus, for the purpose of this reconnaissance report, it is assumed that all water salvaged would be used to reduce Colo:ra.do's debit si tuationunder the Rio G:ra.nde Compact. During the prepa:ra.tion of feasi- bility g:ra.de studies, full consideration will' be given to irrig!l.tion potentials of lands adjacent to the Mosca'-Sargent area. :Benefits from water salvage are based on the sameanalyBis as presented in the feasibility report on the Closed 13asin Division, which assumes that the minimum measure. of water salvage benefits would be the value of water for irrigation use in the Rio Grande 13asin. Analyses of water use and crop returns on the Rio Grande Proj- ect in Texas and New Mexico, Middle ,Rio Grande Project in New MeXico, and San Luis Valley Project in Colorado established that the net fam income per acre-foot of water delivered to the San Luis Valley Project would be less than the comparable values for ,the New Mexico and Texas projects,primarily because of the shorter growing season which prevailS in the San Luis Valley. It was therefore concluded that benefits based on use of the Salvaged waters on the Rio Grande Division lands of the San Luis Valley :E'roject would furnish a conservative minimal appraisal of the water salvage benefits assignable to the plan of develo:pnent. Fam income and costs ,for the Rio Grande Division lands were estimated on the basis of 6 fam budgets which evaluate the effects of land sizes and classes and agricultural enterprises prevailing in the Rio Grande Division. On the basis of these bUdgets, the average annual benefit assignable to the 224,340 acres oI'existing irrigation in the Rio Grande Division with a full water supply was, estimated to be $59 per acre. 1'he diversion requirement to furnish a full water supply 38 , ' ('. '"". I' \.''- .. '""\ r . U' .:,;0