Going, Going, Almost Gone: How the Depletion of the Alluvial Aquifer Will Affect Cropping Decisions in the Arkansas Delta

The U.S. Geological Survey (USGS) has determined that agricultural irrigation in Arkansas’ Delta is unsustainable with significant negative economic repercussions on producers net returns affected by the Alluvial aquifer. This study examines how irrigation restrictions in that region would affect county net returns to crop production. It also considers the effect of planting less water-intensive bioenergy crops in the event biofuel markets become a reality. A constrained optimization model determines acreage allocations and net returns under three irrigation scenarios: i) no irrigation restrictions, ii) irrigation restrictions that lead to a sustainable Alluvial aquifer, and iii) irrigation restrictions that would lengthen the life of the Alluvial aquifer. Hypothetical switchgrass and forage sorghum crops were then added to model the effect of a biofuel market. If crop production were conducting using irrigation levels that are sustainable, as defined by the USGS, producer net returns would decrease by 28% in the Alluvial region. Estimates show that the introduction of dedicated bioenergy crops could alleviate this downturn. If the price of switchgrass reached $46.40 per dry ton at the farmgate, it is possible to restore net returns to crop production across the state to pre-irrigation restriction levels, while Alluvial region producers now would suffer only a 9.5% reduction. Significant income redistribution to crop production thus exists with depleting ground water irrigation resources even with the introduction of an alternative markets.