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. ~ ,- 1,,' .. H~J ! ~ Clearly, the loss in dryland production of the irrigated acre inside the take area is an adverse effect of the project, and should be deducted from previously computed irrigation benefits. In the draft EIS it is estimated that approximately 7000 irrigated acres inside the take will be so affected. Indirect and public economic benefits generated by the Narrows project are determined by multiplying direct economic benefits by numerical coefficients. In view of the discussion in #1 and #2, direct benefits appear to be overstated, and therefore indirect and economic benefits are overstated in approximately, the same proportion. 4. The low discount rate ~ 3.25 per cent ~ 100 years exaggerates the benefits ~ the project. ~ using ~ more realistic discount rate and time period of analysis, project benefits ~ significantly reduced., The 1973 benefit-cost analysis (reference 2) for the Narrows project discounts benefits and costs at 3.25%; this low rate exaggerates the benefits to be derived from the project. Currently the Water Resources Council requires a rate of 6-1/8% for all federal water projects. Using this higher discount rate over a lOO-year period, the project cost of $139 million (reference 4, July 1975 estimates) is equivalent to an annual cost of $8 million. Since the Bureau estimates benefits to be $8 million, (reference 5, July 1975 estimates)! the benefit-cost ratio appears to be 1 to 1. However, in view of the earlier discussion concerning overstated project benefits, the actual benefit-cost ratio is significantly less than 1 to 1. Concerning the time ,period of analysis, the Institute of Ecology discusses this matter in its review of the Bureau of Reclamation project at Garrison" North Dakota (reference 6): -7-