Note to Editors: A complete copy of this study is available by request.
The economic contribution to five counties of 3,500 irrigation wells along the South Platte River is about $130 million, according to a study released by Colorado State University on Monday. The irrigation wells have been the center of controversy after a court ruling was made late last year that would prevent those wells from operating next year because they are pulling water out of the river and depleting supplies for senior water rights holders. The study tallies losses in agricultural production and ripple effects of lost revenue to community businesses.
The December 2002 court ruling to shut down the wells, which are managed by GASP, or the Groundwater Appropriators of the South Platte, requires people with groundwater wells along the river who do not hold water rights to water in the South Platte River to defer use of the water to South Platte River senior water right holders unless they can file plans to augment the loss of water in the river or purchase or lease expensive water rights.
"GASP wells are one part of the equation," said James Pritchett, Colorado State University agricultural and resource economics assistant professor. "If wells are allowed to pump without a replacement plan for the water they use, junior and senior surface water rights holders who draw water from the river will be harmed, as will the counties in which they operate. Water rights holders include both irrigating farmers and municipalities, and their losses may outweigh the losses of a GASP well shutdown."
The ruling is based on the fact that the groundwater in the area is replenished by the river and poor runoff means there isn’t enough water to meet all of the demands. Pumping water through wells in the area lowers the level of water in the river – which may not be noticed in average precipitation years but, during this dry cycle, causes water shortages for groups who argue that their water rights to the river have been compromised in an already dry year. Farmers who irrigate from ditches diverted from the river and municipalities including Greeley and Fort Morgan have been affected by the wells.
"The purpose of this study is to look at the economic contribution of one group of water leasers, whose members may not be able to pump groundwater in 2003 due to this recent ruling," said Pritchett. "We looked at the direct impact on farmlands, such as the loss of crops, and the indirect effects such as the losses to agricultural businesses and the larger community."
The area affected by the ruling is along the South Platte River as it flows through Adams, Logan, Morgan, Sedgwick and Weld counties.
The study looked at vegetable, sugar beet, alfalfa and grain production along the river that is dependent upon irrigation wells. Total crop revenue contributed by crops that are supported by the wells is estimated to be $79.4 million with grains such as corn and alfalfa hay contributing $58 million to that tally. Another $40.6 million is attributed to losses to agricultural-related businesses such as crop consultants, real estate sales, livestock producers and equipment dealers. Another ripple of losses to community businesses such as grocery stores, gas stations and restaurants is estimated to be $10.8 million.
"The persistent drought creates economic hardship for water users in the South Platte River basin. These economic losses are not borne equally among groundwater irrigators, surface water irrigators and municipalities," said Pritchett. "We’re not suggesting the highest or best use of water resources in the South Platte basin. While this analysis considers the economic contribution of groundwater wells whose depletions fall under GASP, the potential losses to other stakeholders have not been considered. Additional insights can be gained by considering impacts to these stakeholders."
Many of the irrigation wells affected by the ruling were put into place in the 1950s and 1960s. The current drought has caused a water shortage extreme enough that junior water rights holders will have to do without water in 2003 because of the needs of senior water rights holders.
The South Platte River originates in the center of Colorado and flows northeast for 270 miles to Nebraska. According to the Environmental Protection Agency, about 65 percent of Colorado’s population is concentrated in a 30-mile-wide strip along the river. That area begins about 20 mile south of Denver and stretches 80 miles to the northeast.
The study was written by Pritchett and Stephan Weiler, an associate professor in the Department of Economics.