Issues Paper, Central Utah Project

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?f. 34 demand or "over supply" has usually been the case since the early part of this century if not before. This certainly is the case now for corn, potatoes, beef, sugar beets, wheat, and other products. The usual situation, as now, has been that the government has had to intervene in agricultural markets to reduce the supply and increase the demand so as to protect farm product prices and incomes. It has done this by providing incentives for farmers to retire land, by paying per unit subsidies, by purchasing crops, by subsidizing pri­vate expenditures on food, and by restricting imports. These have been massive programs costing the public billions of dollars. The current sugar price support program is a good example. But if the demand for agricultural products is not un­limited, and government projects are committed to limiting production, any subsidized increased agricultural output via subsidized irrigation water will displace agricultural pro­duction elsewhere. The increased value of crops in the Bonneville Basin will be largely offset by a decrease in the value of crops grown elsewhere. This is not idle speculation. Studies of the national impact of federal irrigation projects such as Narrows docu­ment exactly this sort of agricultural displacement.* The *See Howe and Easter, Interbasin Transfers of Water; and Heady et al., Agricultural and Water Policies and the Environ ment, CARD Report 40T (Center for Agricultural and Rural De­velopment, Iowa State University, Ames, Iowa, June 1972).