Public subsidies for water‐conserving irrigation investments: Hydrologic, agronomic, and economic assessment

Public subsidies for promoting the adoption of water‐conserving on‐farm irrigation technologies are frequently cited as means for making additional water available for higher‐valued uses in the water‐scarce western United States. On the basis of an agroeconomic model reflecting conditions in northeastern Colorado, hypothetical conservation subsidy policies are analyzed with regard to their effects on hydrologic and agronomic factors such as irrigation water delivery, consumptive use, and return flows, as well as on economic factors including crop mix, input use, irrigation technology choice, and agricultural net returns to water. The cost‐effectiveness of different subsidy arrangements for generating delivery reductions is also assessed, and implications for their implementation are derived. In contrast to assumptions underlying federal policies, the results confirm and extend earlier academic findings that subsidy policies are unlikely to provide real water conservation under many frequently encountered river basin conditions.