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I I I I I I I I I I I I I I I I I I I '" "01 '~ ' ., . ..... 0' -'I, t ... \)\.1, .- Thus, the first issue that must be addressed in measuring NED benefits is a determination of the types of crop production that will result in increases in national agricultural output. Although this issue poses some difficult conceptual problems, the Guidelines provide a definitive rule for making that determination. Specifically, the Guidelines specify certain basic crops that are grown throughout the United States in such quantities that no single water resources project could affect their price, and thus cause transfers of crop production from one area to another. These basic crops are rice, cotton, corn, soybeans, wheat, milo, barley, oats, hay and pasture. Thus, if PIA is evaluated using any or all of these crops in various combinations, the resulting benefit estimates should be counted as NED benefits when following WRC Guidelines. The Guidelines assume that crops other than basic crops have production limitations dictated by market demand, risk aversion, and supply factors other than suitable land. The explicit assumption is that increased production of other crops would probably be offset by a decrease in production elsewhere, and thus cannot be counted as an NED benefit. The Guidelines make an exception to this rule if it can be demonstrated that the production of other crops is limited by the availability of suitable land. In such cases, the Guidelines allow for the inclusion of other crops in the economic evaluation to the extent that these crops are already present in the cropping patterns of the better producers in the region. One procedure specified in the Guidelines for measuring NED benefits is the farm budget analysis method. The farm budget method measures changes in net farm income that result from bringing new land into production. Specifically, the method measures the net benefits of 7 - 1;;