PUB00041

• Year: 1998
• Title: Western Irrigation Economic Benfits Review
• CWCB Section: Finance
• Author: Family Farm Alliance
• Description: White paper on the role of irrigated agriculture in the 21st century.
• Publications - Doc Type: Tech Report

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3.0.
3./.

Direct. Direct Sel. dill/ Secondary Economic' 'allies.

DeJining Ilu! EcoJlomic Value of Irrigatioll Benefits.

El'Ol1olllic hcnclits and impacts for \\ ah.'r resource projects arc primarily described
in terms of din'ct. direct nl't. and scconda~- (or regional) economic values. The...c arc
IIH.'~lsurcs of l't,'OIlOll1ic \'alul' lh..at an' cnnH'lltionall~ applied within stand.utI water re.'>oun.'c
{'valuations and han' a long histo~ of :H'ccptancc h~' economists and rcslIurcc managers.
Direct value rdcrs to the economic nllul' related III the primary prndul:tioll of agricultural
goods. such :I.. the gross l'rnp (f:lrm-g:lfc) value of irrigated agriculture. II j..; simply the
total n'H'OUCS g:lim'd froJlll'olllllludily product sales.

Direct Ill't \':lIUl' rl'flrl'Sl'nts thl' nct bl'llcfits derind from primary irri~ation
production. O\-er and abuH' thc costs of production to thl' farm lIfll'nHors. Din'ct nl.'t nlluc
is a measun' Ilf irri~all'd a~ricultun,ls nl't l'ontrihulion to nationall'l'onomic dl'\"elopment
(or social wdfarc). Uircl't nl.-t v:lluc C:.IIl he I1Icllsun'd for l1Iost t)'pes of economic activity
associ:lted with water rcsollrcc IIse. including hydroeledric power production, flood
control, and rel'n'ation.l'mironmental values (in 11I:II1Y l'lISes). Direct net \'alue can be used
to st:'H1dardiZl' and compal'e the rdatin benefits of different t~pcs of l'conomic acti\'ities, It
attempts to represent II purl' expression of economic efficil'ncy when l'omp.lring water
n'soul'Ce tlse alternati\'es. As stich. direct net \'alues arc preferred and used b~' fl'deral
agency decision mllkers to compllre different measures' economic hem~'fits to the nation in
general.

Secondary, or regional (rcgional t.'conomie dcnlopment), economic benefits refer to
measun's of local income, employment, or cxpenditures ~enerated by direct l'conomic
:Icth'itics--such as irrigated agriculture, Secondary benefits arc a distinct categor:y of
economic acth'ity :lIld arc sl'parate from direct benefits when considering contributions to
economic acth'il)' or growth, These types of l'conomic benefits arc rdated to almost all
types Hf direct ccnnomic :Ictivities, and they arc usually the type of economic \':llt1e of
greatest concern to state and local decision makers. State and regional decision makers

Economic5 8enefit llevieW/Page-8