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1(': C".1 C .... c. Development Period Benefits from the use of supplemental water would begin to accrue immediately after completion of project works on the presently irrigated land. The 780 acres of nonirrigated land which lies in small scattered tracts are projected to be developed in conjunction wi th land already under cultivation. It is likely that the development work required on presently irrigated land and on the adjoining nonirrigated land would be accomplished in stages, a portion of the farm being treated each year. Development of the 540 acres of non- irrigated land, on which new farms are projected to be established, is likely to proceed rapidly after work is begun. However, several years may elapse before the full level of benefits is attained. The assumption is made for the Smith Fork project that a period of three years for evaluation areas A, B, C, and E and five years for evaluation area D will be required before the full level of projected benefits are achieved. These periods are used for di scounting purposes. Irrigation farming and development of new farms require considerable capital, labor, and management. Difficultires in farm development are frequent~y the result of capital limitations. Farmers have demonstrated that good production rates can be achieved within two or three years provided the resources, especially capital, are available to develop the land and to obtain the necessary equipment, livestock and buildings. Total needs for new capital will not be excessive on the Smith Fork project. Since this is primarily a supplemental water project the present capital resources of existing farms will be utilized. The need for new capital will consist primarily of capital for land development, expansion of livestock numbers, modernization or construction of dairy buildings, and purchase of modern dairy equipment. Annual Direct Benefits The increased annual value of agricultural products, the annual costs of farm irrigation systems and land deVelopment, and the gross and net direct agricultural benefits are summarized in table 13. Gross direct agricultural benefits per acre for evaluation areas A, B, C, D, and E are estimated at $10.96, $10.73, $8.52, $8.02, and $3.66, respectively. A discount factor is applied to gross direct benefits to ascertain the net direct benefits. This discount factor is dependent upon the development or waiting period necessary for full realization of the projected production and incomes for the project. A three-year development period is assumed for evaluation areas A, B, C, and E and a five-year period for D. The interest rate is five percent and the evaluation period is 100 years. The present annual equivalent value of direct agricultural benefits for evaluation areas A, B, C, D, and E are estimated at $10.44, $10.22, $8.12, $7.29 and $3.49 per acre, respectively. - 42 -