Because of the decline of the Ogallala Aquifer, water districts, regional water managers, and state water officers are becoming increasingly interested in conservation policies. This study evaluates both short-term and long-term water rights buyout policies. This research develops dynamic production functions for the major crops in the Texas Panhandle. The production functions are incorporated into optimal temporal allocation models that project annual producer behavior, crop choices, water use, and aquifer declines over 60 years. Results suggest that long-term buyouts may be more economically efficient than short-term buyouts.

This research analyzes two groundwater conservation policies in the Kansas High Plains located within the Ogallala aquifer: 1) cost-share assistance to increase irrigation efficiency; and 2) incentive payments to convert irrigated crop production to dryland crop production. To compare the cost-effectiveness of these two policies, a dynamic model simulated a representative irrigator's optimal technology choice, crop selection, and irrigation water use over time. The results suggest that the overall water-saving effectiveness can be improved when different policy tools are considered under different conditions. High prevailing crop prices greatly reduce irrigators' incentive to give up irrigation and therefore cause low enrollment and ineffectiveness of the incentive payment program. In areas with low aquifer-saturated thickness, the incentive payment program is more effective, whereas in areas with relatively higher water availability, the cost-share program could be a better choice.

The unique nature of the Ogallala Aquifer presents interesting and confounding problems for water policymakers who are coping with changing groundwater rules in Texas. The purpose of this article is to link previous efforts in water policy research for the Ogallala Aquifer in Texas with current collaborations that are ongoing with regional water planners. A chronological progression of economic water modeling efforts for the region is reviewed. The results of two recent collaborative studies are presented that provide estimates of impacts of alternative policies on groundwater saturated thickness, water use, net farm income, and regional economic activities.

Agricultural water use is becoming an issue in much of the South due to population growth. Results of projects evaluating the impacts of conservation strategies aimed at reallocating or extending the life of water supplies are being met with great skepticism by stakeholder groups. In order to gain acceptance of results, it is essential that stakeholder groups be involved from the beginning in the identification of potential water conservation strategies and be kept informed throughout the project. The objective of this paper is to review previous attempts at involving stakeholders and the methodology currently being employed in the Ogallala Aquifer Project.

Agriculture in the Texas High Plains depends entirely on the Ogallala Aquifer. Texas enacted water conservation legislation to address declining reserves in the aquifer. We developed an integrated regional water policy model that links a hydrology model with an economic optimization model to estimate policy impacts with respect to economic cost and water conservation. Testing the effectiveness of two policies, a groundwater extraction tax and extraction quotas, we observe that neither significantly inhibits groundwater use. Although both policies conserve similar amounts of groundwater, the regional cost of the tax policy to agriculture is more than the quota policy.