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--" ..,,:-, ,-..'o:~"l:. ,,,.c+:.....,,-~. 00 o ~ Direct Agricultural Benefits A primary objective of the economic analysis is to estimate direct agricultural benefits. These benefits are defined as the value of crop and pasture produc- tion expected 'with project development over the value anticipated without the project, minus the value of additional farm inputs or associated costs re- quired. The concepts and assumptions on the specific composition and value of nonproject resources or associated costs, as used in this report, are outlined below. A basic assumption is that the national economy will operate at essentially full employment for the period of analysis. With this general assumption, alternative employment opportunities would be expected in the national economy for resource~ used in the development and operation of irrigated farms, including the labor and management skills of farm operator:,. Also, the projected levels of farm prices received and paid are higher than they would be with significant unemploymenc Estimates of direct agricultural benefits are based on crop-production budgets that account for the quantity and value of crop and pasture production expected after full development of project farms, and for the cost that will be incurred on the project lands in achieving the level of production ex- pected. Estimates were made for each evaluation area and for the project area as a whole. The cropping patterns as;;umed In the benefit analysis are the same as thosl!' used in the analysi& of water requirements and prospective farm incomes. Farms with adequate water ~upplies will require considerably more labor than farms with partial supplies. The additional operator and family labor required is considered as an economic cost in deriving benefits attributable to the project. Labor and Management Charges Labor for crop production on project lands will be required during the summer. ,Thus, the summer hired wage rate assumed in the analysis ($1.00 per hour) was applied to operator and family labor in evaluating direct agricultural benefits from irrigation water. A management allowance or charge was made for the farm operators also. This amounts to 15 percent of the hired wage rate. Based on these rates and an allocation of 75 percent of the hours to the operator and 25 percent to the family, the hourly rate would be $1.11. Return to Land and Water Summaries of the average value of crop production, annual production costs, and return to operator and iamily labor and management, land and water, without and with project development, are shown by evaluation areas in tables 15 and 16. Net income, cost of operator and family labor and m~nage- ment, and the weighted average increase in net income with project development by evaluation areas are shown in table 17. Deduction of all expenses and allowance~ except those for land and water leaves a weighted average net return to these resources ranging from $34.71 per acre for evaluation area G to $9.67 per acre for evaluation area B.