TWCA 2017 Annual Conference

2.  Increasing Usage
 Pollution
 Deforestation
 Fall in Groundwater level
 Climate Change
2

3.  Requires more than traditional practices of water
conservation
 Cost-effective ways to reduce non-beneficial water
consumption in irrigated agriculture without
compromising economic returns
 Lowering existing levels of consumptive water use,
while at the same time increasing water’s
productivity
 A well-functioning water market can provide
financial incentives for improving water’s
productivity
3

4. Source: https://www.tceq.texas.gov/gis/metadata/edw_tsms_met.html
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5.  Voluntary Irrigation Suspension Program Option
 Participation open to irrigation water right holders
including municipal and industrial
 Water level below 635 feet in J-17 index well triggers
the program
 Goal- Enrollment of 40,000 ac-ft of water
 Trigger Date- October 1st
 Flexibility- Farmers can walk out post enrollment if
water level increase
5

6.  Participants must suspend withdrawals in the following
calendar year
 Standby fee is paid to all participants irrespective of a
suspension call
 Implementation fee paid when program requires suspension
of withdrawals
 Initially pursue enrollment from counties with high
impact factor- Atascosa, Bexar, Comal and Hays
6

7.  Two term contracts- 5yr and 10yr
 Payment Schedule
5-year Program
Standby fee $50/acre-foot, 1.5% increase per year
Implementation fee $150/acre-foot, 1.5% increase per year
10-year Program
Standby fee $57.5/acre-foot for years 1-5 and step-up to
$70.20/acre-foot for years 6-10
Implementation fee $172.5/acre-foot for years 1-5 and step-up
to $210.60/acre-foot for years 6-10
7

8.  Enrollment for the first program began in 2012
 Implementation once in 2015
 Fully enrolled program- some applications were denied
since enrollment was full
 Guaranteed payment for farmers- stand-by payment
 Farmers cut back on vegetables. Cotton and Sorghum
worked well under dry-land cropping
8

9.  In 2015, Critical Period Management (CPM) reduction
applied to permit holders
 VISPO provides the financial incentive to cut further
 Aided increase in spring flows and municipal water
supply
 Lower incidence on farmers of the reduced irrigation
water supply
9

10.  VISPO is funded from aquifer management fees
(AMFs) that are specified for the Habitat Conservation
Plan- the municipal and industrial permit holders pay
$44/acre foot of water as AMFs
 Total cost of the program can be ascertained only after
the expiry of contract terms due to myriad uncertainties
 Edwards Aquifer Authority estimates cost of about USD
4 million for an average implementation rate of 33%
over a period of 10 years under a fully enrolled
program
10

11.  Depends on Rio Grande for domestic and agricultural
uses
 Both agricultural and municipal water demand is
expected to grow in the coming years
 Oil and gas production has put significant pressure on
water demand
 Majority of municipal water demand is currently met by
Rio Grande
 Amistad-Falcon Reservoir system- the shared resource
with Mexico
11

12.  To fix and delimit the rights is US and Mexico with
respect to the water of:
 Colorado and Tijuana Rivers and
 Rio Grande from Fort Quitman to the Gulf of Mexico
 One-third of the flow to Rio Grande from the Conchos, San Diego,
San Rodrigo, Escondido and Salado Rivers and the Las Vacas
Arroyo…this one-third shall not be less, as an average amount in
cycles of five consecutive years, than 350,000 acre-feet
 In case of “extraordinary drought” or serious accident to the
hydraulic systems on Mexican tributaries…the treaty allows for
the deficiencies to be repaid in the following five-year cycle
 If reservoir levels exceed 85 percent full then deficit if forgiven
and a new five-year cycle starts

14.  Between 1953 and 1992 Mexico failed to deliver
water to US only once
 Since then, almost in every five-year cycle there has
been a failure to deliver minimum water amount
 Agricultural production in the LRGV depends heavily
on irrigation water

15. Table 5. 2013 Projected Economic Losses Associated with Lack of Irrigation Water in the LRGV
Impact Employment Total Value Output
Type Added
Direct Effect 3,041.6 $117,175,997 $229,235,999
Indirect Effect 1,292.2 $66,615,832 $109,530,397
Induced Effect 506.3 $33,820,341 $56,130,084
Total Effect 4,840.1 $217,612,170 $394,896,481

16.  Allocation from Amistad and Falcon reserves
coordinated by Rio Grande water master
 The DMI (Domestic, Municipal and Industrial) gets the
priority followed by mining and irrigation
 The DMI storage account is renewed at the beginning
of each month
 DMI and operational reserves are recharged before
mining and irrigation water allocation
16

17.  Surface water vs. Ground water
 Urban has superior right to agriculture
 Risk and uncertainty exist with dependence on Mexico
 There are 27 ID’s and each operates independently
 Water is stored in the reservoirs so takes a few days to
reach a farmer when called
 Administrative Differences- Role of ID’s and water
master!
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18.  Municipal use is limited by municipal water rights- ag
conservation may not help!
 Sometimes, DMI usage exceeds their individual water
right
 IDs continue to “oversupply” DMI water to DMI users if
they have availability
 In absence of DMI water with the ID, cities can acquire
water from a third party
 These one time “contract water” deliveries are
governed by the watermaster
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19.  Increase in water demand, climate change, uncertainty on
deliveries from Mexico
 Irrigation water used to charge the networks of canal
 The reliability of municipal water availability may be
disrupted in cases of severe drought and absence of “push
water”
 Urban must also pay for water losses from seepage,
evaporation and other operational losses
 Municipalities may need to purchase water to provide for
“push water”
19

20.  Establishing a market where DMI can purchase push
water from farmers
 Similar to the VISPO, an option be given to farmers
where they can slow down irrigation water usage to
recharge the canals under water shortage
 DMI water availability with the ID’s can be used as a
trigger for withdrawal suspensions by farmers
 When district has the required amount of water in the
DMI account no suspensions will be required
20

21.  Like VISPO, payments will be made for both enrollment
in the program and suspension when triggered
 Volume of push water varies – canal status and length
of the system are key determinants of push water
requirement
 Prices may be negotiated between the parties-
cities/districts and farmers
 Efficient pricing mechanism would imply paying the
farmers the break-even price or the water use value
21

22.  The present value cost of the contract is the sum of
payments to exercise the option and holding it
discounted to the present time
 We plan to develop a risk based simulation model to
assess the probability of exercising the option under
different scenarios
 Simulation results will provide insight into the potential
payments necessary to offset farmer and ID losses
under different production and drought scenarios.
22

23.  Cost of water procurement via a DYOP must be less
than that of any other alternative
 Can have shorter term unlike the Edwards Aquifer
program- does not concern endangered species
 A small-scale program involving a few districts that are
more likely to benefit from DYOP may be put in place
 A pilot program can help us understand large-scale
challenges and feasibility issues
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24. Questions/Comments?
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25. Table 2. Row Crop Losses due to Lack of Irrigation Water in the LRGV
Yield
1
Yield Loss
1
Acreage
2
2013 Price
3
Total
5-year average Farm Gate
Cotton
Irrigated 1,017 (lbs) -488 (lbs) 32,273 $0.80/lb $12,554,709
Dryland 528 (lbs) 76,572
Corn
Irrigated 99 (bu) -22 (bu) 31,317 $6.61/bu $4,533,345
Dryland 77 (bu) 8,034
Sorghum
Irrigated 77 (bu) -29 (bu) 80,267 $6.00/bu $14,134,952
Dryland 48 (bu) 284,450
Total Row Crop Loss $31,223,006
1/
USDA-NASS Quick Stats for LRGV region, 2008-2012.
2/
USDA-FSA annual crop acreage report for LRGV region, 2008-2012.
3/
CME Group Cotton, Corn and Sorghum July 2013 Prices.

26. Table 3. Specialty Crop Acreage and Value of Production Loss
Acreage1
Value of Production2
5-year average
Citrus 27,038 $45,822,200
Vegetables 29,303 $128,211,200
Sugarcane 40,812 $47,361,180
Total Specialty Crop Loss $221,394,580
1/
USDA-FSA annual crop acreage report for LRGV region, 2008-2012.
2/
Estimated Value of Agricultural Production and Related Items, Texas AgriLife Extension Service, May 2013.
Table 4. Value of Production of Vegetables and Sugarcane Acreage Turned Into Row Crop
Production
Crop Mix1
Acreage Mix Yield2
Price3
Value
5-year average Dryland
Cotton 21% 14,879 528 $0.80 $6,284,925
Corn 8% 5,379 77 $6.61 $2,737,867
Sorghum 71% 49,857 48 $6.00 $14,358,794
Total Gross Revenue $23,381,586
1/
USDA-FSA annual crop acreage report for LRGV region, 2008-2012.
2/
USDA-NASS Quick Stats for LRGV region, 2008-2012.
3/
CME Group Cotton, Corn and Sorghum July 2013 Prices.