WATER USE AND THE REGIONAL ECONOMIC IMPACT OF THE COTTON INDUSTRY ON THE SOUTHERN OGALLALA AQUIFER

The Ogallala Aquifer is one of the largest freshwater aquifers in the world underlying eight contiguous states in the Great Plains Region of the United States. Recharge of the aquifer is reliant on precipitation, which is an insufficient condition for the southern portion of the region. The Southern Ogallala Region rose to prosperity with the advent of irrigation techniques allowing for irrigation of four primary crops: corn, cotton, sorghum, and wheat. Faced with an ever-decreasing water table, policymakers are under increased pressure to implement water conservation policies aimed at managing the decline of the aquifer in hopes of extending its usable life and maintaining the economy of the region. This study evaluates the economic contribution of the cotton industry to the Southern Ogallala Region and its subsequent water use with the objective of determining how this industry affects both the economy of the region and the valuation of water. Cotton has been an important component of this region for over 150 years and boasts specific characteristics that make it highly suitable for the climate of this region. In addition to evaluating the cotton industry, this study also incorporates an in-depth analysis of the valuation of water, sustainable agriculture, and production scenarios that may become prevalent in future conditions when irrigation is a limited option. In 2014, 3.8 million acres of cotton were planted in the Southern Ogallala Region; 2.2 million acres of dryland and 1.6 million acres of irrigated. The irrigated acres planted produced 1.1 billion pounds of cotton lint and over 800,000 tons of cottonseed. It was estimated that approximately 903,708 acre-feet of irrigation was applied to for this level of production. The total direct sales of dryland and irrigated cotton production and processing totaled $1.7 billion dollars.
The agricultural industries of the Southern Ogallala Region are closely interconnected and the subsequent ripple effects of cotton production on other related industries were estimated to determine the economic contribution of the cotton industry to the region. The cotton industry, including production and processing, contributed over $3.3 billion dollars to the Southern Ogallala Region’s economy in 2014 and supported over 26,000 jobs. An important focus of this study was to evaluate the cotton industry in terms of the value of water used. The regional economic value of irrigated cotton production was $2,145 per acre-foot and the regional economic value of irrigated cotton production and processing was $2,525 per acre-foot of water applied.
The economy of the Southern Ogallala Region is reliant on agricultural commodities. A change in the production of one agricultural industry will affect other industries, and subsequently, the livelihood of the region. To promote the economic continuance of the region, effective water policies must be implemented that consider the interconnection of these industries as well as the most efficient allocation of water. This study’s evaluation of the cotton industry will assist in providing a foundation for policymakers when considering and implementing future water polices.