Reclamation Policy And The Water Subsidy: An Analysis Of The Distributional Consequences Of Emerging Policy Choices

The goals of the 1902 Reclamation Act have always been the development of irrigated agriculture and enhancement of the "family farm." Although administrative procedures and institutional arrangements have changed over the years, these goals have remained in explicit or implicit form. However, there has been little discussion of the cost of irrigation and rural development policies or of how efficient and equitable they are in their present state. Recent proposals of the Department of the Interior would more strictly enforce the 75 year old 160 acre restriction for recipients of federally subsidized water in order to make farming in Reclamation projects still economically viable while at the sam~ time promoting smaller units of production than now exist. Large farm operators and excess landowners oppose these new regulations as inequitable and destructive of efficient agriculture. Their view is that changing enforcement of the law at this time would be unfair. Land reform groups insist that administrative procedures be reformed to force a strict conformity with acreage and residency provisions and that the subsidy be used to support the development of modest-sized, family farms. The debate over future Reclamation policy revolves around the issues of farm size efficiency and equitable distribution of the water subsidy. Interestingly most of the published research has concentrated on the questions of efficiency and viability (Hall and LeVeen; USDA; Goldman et al.). This paper examines the water subsidy in Reclamation irrigation projects, its magnitude and distribution under current administration of the law, and under proposed changes.