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<br />conservation subsidy. The opportunity cost of water facing the farmer is the <br /> <br /> <br />marginal price to use the water for irrigation plus the conservation subsidy. <br /> <br />0/::10 <br />0/::10 <br />f-l. <br />CO <br /> <br />Moreover, any combination of water conservation subsidies and water price that <br /> <br />has the same sum w1l1 yield results. By combining tax and subsidy, the <br /> <br />opportunity cost of water could be increased to achieve greater salt load <br /> <br />reductions at any given government cost share or cost per ton. <br /> <br />Land Retirement. Our analysis supports the conclusion of Young and <br />Leathers that a whole-farm land retirement strategy would be cost-effective. <br />As noted earlier for the "baseline" run, net rents to irrigation average about <br />S50 per acre, equal to about $11 per ton of salt discharged. This result <br />demonstrates that upstream irrigators are the "least cost avoiders" in the <br />Colorado River basin, implying that the economically efficient solution <br />(minimum basin wide cost) is full-farm land retirement. Those lands having the <br />highest potential for salt loading tend to be the least productive. Hence, <br />employment and income losses would be less on farms with highly saline soils, <br /> <br />and net social costs per ton of salt removed would be lower as well. <br /> <br /> <br />Land ret i rement a 1 so wou 1 d augment downstream flows for increased <br /> <br />hydropower, irrigation and salinity dilution. (It should be recognized that <br /> <br /> <br />under the Colorado River Compact of 1922, such water savings would be subject <br /> <br /> <br />to reappropriation within the Upper Basin). This potential benefit would not <br /> <br />accrue to the other control strategies, because the "conserved" waters would <br /> <br />not have been evaporated if incentive methods were adopted, and would be free <br /> <br />to flow downstream. Gibbon's estimates (Table 7-5) imply that downriver annual <br />hydropower benefits would be about $25 per acre retired. Offstream lower basin <br />benefits in the marginal use (irrigation of forage crops) will vary with <br /> <br />17 <br />