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<br />Agricultural Economy <br /> <br />The "with" farm budgets were used in the payment capacity <br />studies to determine the probable net farm income in the event <br />that the project is built. The representative farms for which <br />budgets were prepared have been described previously. Net income <br />under the "with" condition from each representative farm varied <br />according to the productivity of the soils and land development <br />costs; i,e., decreases in productivity or increases in development <br />costs were associated with lower net incomes. <br /> <br />Attention is again directed to the fact that the "with" farm <br />budgets were based on the availability of a full water supply, and <br />that in actual operations the full supply will not be realized, In <br />order to account for the effects which will result from the difference <br />between a full supply and the expected supply, adjustments were made <br />in the computed payment capacities, The results of the budgetary <br />analyses for the four economic tracts with a full water supply are <br />shown in tables 15, 16, 17, and 18, The per acre computed payment <br />capacities expanded to the project area are then adjusted in <br />table 19 to reflect the influence of expected water shortages. <br /> <br />The payment capacity index for each ditch shown in table 19 <br />was derived as follows: <br /> <br />The water shortage for each ditch for each year of <br />the study period was computed in the hydrology <br />studies and the percent that this shortage was of <br />the crop re~uirement determined. A payment capacity <br />index was then determined for each year, based on <br />the following criteria: <br /> <br /> <br /> <br />5 percent or less water shortage ~ 100 percent <br />payment capacity index. <br /> <br />For each 1 percent shortage greater than 5 <br />percent subtract 5 percent from the payment <br />capacity index, <br /> <br />." ,;. <br /> <br />25 percent or greater water shortage = 0 percent <br />payment capacity index, <br /> <br />The annual payment capacity indices for each ditch were then <br />averaged to obtain the figures used in table 19: Adjusted annual <br />payment capacity for all the irrigable lands derived in the manner <br />presented in table 19 totals $119,844, or an average of $6.08 with <br />a range from $3.25 to $7.17 per irrigable acre, This amount represents <br />the ability of the water users to pay Federal OM&R expenses and <br />construction costs chargeable to irrigation from the Federal project. <br /> <br />.-< <br /> <br />..-,' <br /> <br />45 <br />