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<br />from Table 4, a marginal water charge of $28 per acre foot combfned with a <br />system construction subsidy of 40~ yields a reduction of over 138,000 tons of <br />~ salt at a net social cost of $9.68 per ton. The farmer shares $4.80 (about <br />~ <br />~ half) of the social cost. The farmer's share could be further lowered to 40% <br />-.J <br />if the subsidy were raised to 47~, while the model solution remains unchanged. <br />Alternatively, the farmer's cost share could be increased .to 60~ by raising the <br />lnframarglnal water price from $4.00 to $4.93 per acre foot. Pragmatlcally, <br />thls flexlbllity ln cost distributlon may be worth some efflciency loss and <br />addltlonal admlnlstrative expense. Greater reductlons ln salt dlscharges than <br />for taxes alone are also possible wfthout substantfal dlsruptions of <br />agrlculture. The Grand Valley could lower its salt load by over 60% wfth a <br />number of tax/subsidy comblnations llsted in tables 3 and 4. <br /> <br />Water Rental. A water conservation subsidy can, fn theory, yield the same <br /> <br />pollution reductlon as a tax on effluent. Applylng thls idea to inputs, a <br /> <br /> <br />subsldy pald to reduce irrigation water appllcation rates would likely <br /> <br /> <br />encourage reduced salt discharges (table 4). This conservation subsfdy is <br /> <br />analogous to a water rental market; it confronts the user with an opportunfty <br />cost for water use at the margln. However, the water would be left ln the <br />stream, ellmlnating salt pickup and water dfstributlon costs. This approach is <br />very slmilar to the water bank, or water rights purchase program, proposed by <br />Howe and Orr as a sallnity control pollcy. <br />As expected, both the predicted farmer response and the net social costs <br />of sallnlty control are the same as those predicted through irrlgation water <br />taxes. Note ln Table 4 that an fncreasing block water tax of $4.00 and $27.75 <br />produces the same 93,970 salt reduction at a $9.17 net social cost per ton as a <br />$4.00 and .$14.00 water tax combined with a $13.75 per acre foot water <br /> <br />16 <br />