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<br />Water markets can mean an end to water shortages <br /> <br />Page 9 of27 <br /> <br />Agency budgets rose, jobs were created, and land <br />values soared in regions where the water was <br />delivered (Simmons 1994). <br /> <br />Initially, construction costs were to be repaid within <br />ten years of completion by the recipients of the <br />water. However, interest-free repayment schemes, <br />together with deferrals and extensions of the <br />repayment period--and a dramatic climb in interest <br />rates in the 1970s and 1980s--raised the value of the <br />subsidy to 95 percent of the actual costs. This <br />subsidy has been valued at $19 billion (Wahl 1989, <br />27-39).@ Typical examples of subsidies are shown <br />in the following table. <br /> <br />Bureau of Reclamation Irrigation Project <br /> Subsidies <br /> Estimated Actual <br /> Actual Cost of charges <br />Irrigation Charges Supplying as <br />District ($/acre- Water Percentage <br /> foot) ($/acre- of Supply <br /> foot) Cost <br />Columbia BBG <br />Basin East <br />G1enn- BB0 <br />Colusa <br />Grand BB0 <br />Valley <br />I Imperial II 4.75 II 11. 00 II 43% I <br />Oroville- BBG <br />T onasket <br />Truckee- BB0 <br />Carson IWestlands II 15.80 II 67.56 II 23% I <br /> <br />Sources: Anderson (1995b, 279). <br /> <br />Because nearly all reclamation projects subsidize <br />water users, they are extremely well suited to pork <br />barrel politics. The cost of dams and canals is <br />spread over all taxpayers, but the benefits--the <br />wealth that comes when dry land becomes <br />productive--are concentrated among specific <br />interest groups. With the costs diffused, the average <br />taxpayer is not well informed about the projects. In <br /> <br />http://www . perc.org/pub lications/policyseries/priming_ full. php ?s=2 <br /> <br />/12/2006 <br />