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<br />'j <br /> <br />.' <br />cJ <br /> <br />1",,', <br />II.i-V <br /> <br />~l ., <br /> <br />1. The Bureau of Reclamation claims future improvements in technoloRY as ~ <br /> <br />proiect benefit. ~ eliminatinR these inappropriately claimed benefits, <br /> <br />direct and indirect irriRation benefits are reduced ~ 44%. <br /> <br />In order to ascertain irrigation repayment capacity and irrigation <br /> <br />benefits of the Narrows project, the Bureau developed an economic model of <br /> <br />a partially-irrigated farm with characteristics representative of the farms <br /> <br />in the project service area. (This is the procedure used in the 1966 <br /> <br />study, reference 1. Bureau economists have developed a more recent model <br /> <br />using a dryland farm as representative (see comment #2), but details are <br /> <br />'. <br /> <br />not yet available.) <br /> <br />Repayment capacity is computed as follows. First, the amount of <br /> <br />water needed to fully irrigate the representative farm is computed. <br /> <br />Next, a detailed farm budget is drawn up which identifies crop yields, <br /> <br />gross income, . farm expenses and net income. Returns to investment, labor <br /> <br />and management are deducted from the net farm income to yield repayment <br /> <br />capacity; dividing this figure by the number of acre-feet of water needed <br /> <br />to fully irrigate the representative farm results in the repayment capacity <br /> <br />per acre-foot of water. In the 1966 study this amounted to $11.42 per <br /> <br />acre-foot at the farm headgate. <br /> <br />This procedure, based upon current estimates of yield, would seem to <br /> <br />measure the value of an acre-foot of project water. However, the Bureau <br /> <br />distinguishes between the value of an acre-foot of water for repayment <br /> <br />purposes and the economic benefit of an acre-foot of water. In order <br /> <br />to calculate the economic benefit of project water, the Bureau develops <br /> <br />a farm budget for its representative farm at the midpoint of a lOO-year <br /> <br />-2- <br />