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Show volume of trade resulting from project develop- ment. Since these people benefit from the proj- ects in the same sense as irrigation farmers, it is reasonable that they should join the farmers in paying a portion of the cost. A third criticism of the source of repayment funds is the use of the interest component on the power investment, or excess power revenues, or other available revenues to repay a part of irri- gation investment. The principal defense of this practice is that the river resource should be used to develop the land of the basin or region, par- ticularly since the areas in which irrigation cur- rently is important are generally underdeveloped. Dependence on power revenues in this manner, however, may result in failure to develop some good lands because of the lack of power resources in the area, or power rates may have to be higher than would otherwise be necessary. Two other criticisms pertaining to current re- payment practices applicable to primary bene- ficiaries might be noted. Supplementary irri- gators who draw upon underground waters which have been replenished through storage provided at public expense, or who draw upon waste waters made available by public storage, should pay for such water on the same basis as others in organ- ized irrigation districts. This is not now being done, with the result that discrimination exists. An increasing number of legislative proposals to extend the periods of repayment for reclama- tion projects have been made. Since the Fed- eral irrigation investment is interest-free, this action has the result of increasing the Federal contribution. One of the reasons for this pressure to extend the repayment period appears to be inadequate flexibility in repayment schedules. Although there is some provision for such flexibility, because of difficulties in administration little use is made of it. As a result of this inflexibility, irrigators are sometimes unable to meet their obligations and the only remedy at hand is to extend the pay- out period. Apart from such effects, it would seem desirable to encourage and make possible repayment in accordance with variations in income. In the case of Federal drainage projects, which are analogous to projects which reclaim land by irrigation, there is no established reimbursement policy. Recently, Congress provided that the words "flood control," as used in the flood control acts, shall be construed to include "channel and major drainage improvements." Thus, such drainage costs are nonreimbursable except to the extent that local participation is required in specific cases. The Army Engineers have adopted a policy of recommending to Congress non-Federal participation to the extent of ap- proximately 60 percent of the total economic cost of the land enhancement portion of projects upon which they submit reports. Hydroelectric Power.-Although the market- ing of surplus power produced in connection with multiple-purpose river projects has been consoli- dated largely in the Secretary of the Interior (with the principal exception of TVA), the marketing is governed by different laws, depending upon which agency constructs the project. Hence, there is no uniformity among the reimbursement provisions. In general, the sale of electric power from reclamation projects is now governed by the Reclamation Project Act of 1939. Power rates are established at least sufficient to cover (a) an appropriate share of annual operation, main- tenance, and replacement costs, plus (b) amorti- zation of the power investment in not to exceed 50 years, with (c) interest at a rate of 3 percent per annum on the unamortized balance of the power investment, and (d) repayment of any portions of the irrigation costs which are beyond the ability of the water users to repay and which are not covered by the interest on the unamortized balance of the power investment. Arrangements for the sale of power produced at projects of the Army Engineers are the respon- sibility of the Department of the Interior as pre- scribed in section 5 of the Flood Control Act of 1944. Under this act, power not required in. the operation of the projects must be delivered, to the Secretary of the Interior for disposal at rates approved initially by the Federal Power Commission. In establishing rate schedules, consideration, must be given to recovery (upon the basis of the 71 |