Fuhriman：美国联邦政府对灌溉发展的援助

Agricultural & Applied Economics Association Federal Aid to Irrigation Development Author(s): Walter U. Fuhriman Source: Journal of Farm Economics, Vol. 31, No. 4, Part 2: Proceedings Number (Nov., 1949), pp. 965-975 Published by: Oxford University Press on behalf of the Agricultural & Applied Economics Association Stable URL: http://www.jstor.org/stable/1233764 . Accessed: 09/04/2011 22:55 Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp. JSTOR's Terms and Conditions of Use provides, in part, that unless you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you may use content in the JSTOR archive only for your personal, non-commercial use. Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained at . http://www.jstor.org/action/showPublisher?publisherCode=aaea. . Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printed page of such transmission. JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org. Agricultural & Applied Economics Association and Oxford University Press are collaborating with JSTOR to digitize, preserve and extend access to Journal of Farm Economics. http://www.jstor.org FEDERAL AID TO IRRIGATION DEVELOPMENT WALTER U. FUHRIMAN* Bureau of Agricultural Economics T HE development of irrigation is a part of the history of agri- culture. Modern irrigation in the United States began slightly more than 100 years ago-nearly two decades before enactment of the first homestead law. It was an adjustment to the arid condi- tions of the West in the face of urgent need for food for an increas- ing population and winter feeds for expanding livestock indus- tries. As with other lines of agricultural development, early irrigation was undertaken without benefit of direct Federal aid. Many small irrigation systems were built by individuals or by small partner- ships. Conditions in many places, however, required action by larger groups so settlers organized into cooperative or mutual water-ditch companies for constructing and operating irrigation systems. Understandings regarding "water rights" for irrigation purposes became established by usage and over a period of years gradually became formalized into law by statutory enactments and court decisions. Early irrigation associations often based on in- formal agreements have also been formalized under various state laws into mutual or cooperative irrigation companies, associations, or irrigation districts. Projects that required simple low-cost construction were sought. The better, more easily developed lands near dependable and readily accessible water supplies were selected for development. As the more favorable sites were occupied, project development be- came increasingly more difficult and costly. Storage dams, pumping plants, and long canals over difficult terrain increased the cost of later irrigation developments. To assist in financing and operating such irrigation projects, all of the 17 western states have passed irrigation district laws. These differ in detail but irrigation districts set up under state law generally are public or quasi-public corpora- tions having authority to levy assessments against all lands within their boundaries that benefit from district facilities. These districts have proved very useful, particularly in taking over and operating systems built by the Federal Government. However, they have not * The writer acknowledges with thanks many helpful suggestions received from members of the staff of the Bureau of Reclamation in Washington, D. C., and Boise, Idaho. 965 WALTER U. FUHRIMAN commanded financial resources sufficient to construct the more costly projects. A few states, cities, and commercial companies have assisted in irrigation development, but these give little promise of major future contributions except that receipts from water furnished to cities and industries from multiple purpose projects may contribute substantially to payment of construction costs of some projects. As the nineteenth century drew to a close it became apparent that Federal funds were needed to finance irrigation development if reasonably full utilization of western water resources was to be achieved. As early as 1888, funds were appropriated for the purpose of investigating the extent to which arid regions could be redeemed by irrigation. Two years later an Act provided that patents issued for lands west of the one-hundredth meridian contain right-of-way reservations for ditches or canals constructed by authority of the United States. In 1902 the Federal Government, by passage of the Reclamation Act, entered the field of direct promotion of irrigation. There were then around eight million acres of land under irriga- tion. By 1945 Federal and private developments had increased this to approximately 192 million acres. In 1945 Federal works were capable of furnishing water to more than 5,000,000 acres. Slightly over 2,437,000 acres could be furnished a full supply of water from Federal facilities; 521,000 could be furnished a supple- mental supply of storage water; and 2,055,000 could be furnished a full or supplemental supply under special contracts. At present, roughly one third of the irrigated acreage is served by individual and partnership enterprises and a third by mutual or cooperative companies. Some 76 percent of the irrigated land in the 17 western states is served by works constructed by private interests, and 13 percent from works constructed by the Federal Government. The remaining 11 percent is served by both Federal and private works.1 From 1945 to 1948 acreage served by the Federal projects in- creased approximately nine percent. Future development of large irrigation projects is likely to be mainly in the hands of the Federal Government, although significant acreages may yet be brought under irrigation by individual enterprises through pumping from farm wells or neighboring streams and ponds and by construction of small farm reservoirs. 1 Irrigation Agriculture in the West. U.S.D.A. Misc. Publication No. 670. 966 FEDERAL AID TO IRRIGATION When the Reclamation Act was passed in 1902, it apparently was expected that with modest financial assistance from the Federal Government, reclamation would pay its own way. Accord- ing to a Fact Finders Committee, appointed by Secretary of the Interior Hubert Work in 1923 to make a comprehensive review and appraisal of the first two decades of Federal reclamation experi- ence, it was initially contemplated that money used by the Rec- lamation Service for reclaiming arid and semi-arid lands by ir- rigation should not be raised by taxation. Construction funds were to be derived from the sale of public lands in the states to be benefited, to which were added later such moneys as are derived from royalties from oil and potash lands.2 Receipts from extractive resource-depleting industries were thus to provide funds for the construction of relatively permanent continuous-income-producing irrigation works. It was intended that this fund should not be lost but should be held in trust as a revolving fund, and reinvested in the reclamation of arid land as fast as paid back. The Reclamation Fund, however, proved to be inadequate. Net construction cost of projects subject to repayment, as of June 30, 1923 already was, in round numbers, $143,000,000. This large con- struction program had exhausted the Reclamation Fund and made necessary a loan of $20,000,000 to keep the work moving. Such loans also proved inadequate. Direct appropriations have provided most of the construction funds of the Bureau of Reclamation. Total accretions to the Reclamation Fund, as of June 30, 1948 were approximately $250,000,000, whereas total allotments and ap- propriations for reclamation purposes had reached a total of around $1,530,000,000.8 Appropriations for construction purposes to the Bureau of Reclamation for fiscal 1949 were around $240,000,000. A Bureau of Reclamation program calls for expenditures of $3,891,900,000 during the 7-year period beginning with fiscal 1948.4 With respect to repayment of irrigation costs Congress has steadfastly maintained its original position that costs assigned to irrigation works, including investigation and engineering, should be repaid to the United States. It has, however, liberalized its re- 2 Senate Document No. 92, 68th Congress, 1st Session. 3 Annual report of the Secretary of the Interior, 1948. 4 The Reclamation Program, 1948-54, U. S. Dept. of Interior, Bureau of Reclamation. 967 WALTER U. FUHRIMAN payment requirements, and increased its legislative safeguards to sound development in several important respects. Terms of pay- ment have become more and more lenient, the sources from which payment can be drawn have been broadened, more thorough in- vestigations have been stipulated, the advantages of multiple purpose projects have been recognized and the allocation of joint costs to their several purposes has been authorized. With regard to payments, the Act of 1902 authorized the Secre- tary of the Interior to determine the charges per acre of land with a view to returning to the reclamation fund, in not to exceed 10 annual installments and without interest, the estimated cost of constructing the project.6 Before many years, however, a considerable number of projects had failed to meet the schedule of construction charges set up under the 1902 Act. In 1914 all accrued charges were placed in the con- struction fund and a new start was made under a 20-year repay- ment plan.6 Extension of the repayment period helped, but did not solve the delinquency problem. A few years after the close of World War I many contracts were again seriously in arrears. Congress then provided that all construction charges should be payable in annual installments based on the productive power of the land. The period of payment under this plan was indefinite but originally it was expected to run not more than 40 years. Determination of gross value of crops led to disputes and administrative difficulties, and provision for such contracts was repealed in 1926, but twenty of the irrigation districts which entered into this type of contract with the United States were still paying on this basis in 1947. The Act of 1926 authorized the Secretary of the Interior, upon request of individual waterusers or districts,7 to amend any existing water- right contract so as to increase the period for repayment of con- struction charges not to exceed 40 years from the date of the first payment under the original contract and also to make new con- tracts with up to 40-year repayment periods.8 The 40-year repay- 6 The Reclamation Act, Section 4. 6 Reclamation Extension Act, Section 2. 7Contracts for payment of irrigation construction charges during the early period were made with individual land owners and homesteaders. Such contracts are still in force on a few projects, but by the Act of May 15, 1922, contracts with regularly organized irrigation districts were authorized. Since then contracts with organized irrigation districts rather than with individual landowners have become the general practice. 8 Sections 45 and 46 Omnibus Adjustment Act, 1926. 968 FEDERAL AID TO IRRIGATION ment period is still in force but repayment has been modified in other ways which in effect lengthen the repayment period. The Reclamation Act of 1939 provides for a development period of not to exceed 10 years before the beginning of the 40-year repay- ment period, thus extending the period of interest-free money to 50 years.9 Moratoria granted under special acts during depressions have increased the average contract life by approximately 10 years, according to a recent report by the Bureau of Reclamation.l1 The Reclamation Act of 1939 also permits construction costs to be separated into two parts; (1) those incurred to provide facilities for furnishing the water supply-the main dams, reservoirs, pump- ing plants and carriage canals; and (2) those incurred for the water distribution system-secondary canals and laterals. Costs of the distribution system are to be paid for under the regular 40-year plan after a development period of not more than 10 years. With regard to water supply features, the Act authorizes water rental contracts with charges sufficient to cover annual operation and maintenance costs of the water supply works, plus a payment on construction costs to be determined by the Secretary of the In- terior. These contracts may be short or long, but they may not exceed 40 years. At the expiration date new contracts presumably would be negotiated. Water users or irrigation districts establish no definite water rights under water rental contracts, whereas under repayment contracts permanent water rights are established. Long repayment periods have been criticized on the grounds that they prevent farmers from accumulating equities in their farms. If construction payments drained off the total surplus above current operating and living expenses, this would be true. The Government, however, has demonstrated neither the ability nor the desire to do this. In determining the waterusers' ability to pay under re- 9 Section 7(b) Reclamation Project Act, 1939. 10 How Reclamation Pays, U. S. Dept. of Interior, Bur. of Reclamation, 1947. This publication reports that at the end of 1946 the repayment periods for 66 projects or major divisions of projects involving 177 contracts were distributed as follows: Number of projects Repayment period or major divisions (Years) 15 26-39 26 40-49 12 50-64 6 65-79 4 80-99 3 100-150 969 WALTER U. FUHRIMAN negotiated contracts, a reasonable return on investment, including normal land values, is included in current operating expenses. This provides a source of savings or capital accumulations for the owner- operator. It is not uncommon for land values to be maintained on projects which are in arrears on the payment of construction charges. Delinquency on water charges, therefore, is by no means conclusive proof of financial distress on the part of the water- users. Delinquencies on construction charges are not large. The total due to June 30, 1948, was $84,659,231.71, of which only $2,369,- 020.66 (three percent) was unpaid. Delinquencies are kept rela- tively low, in part, through renegotiation of contracts with projects which are in arrears. Amendatory contracts are being made for projects which now have substantial uncollected items. One aspect of present negotiations is the reduction of annual installments through extension of the repayment period without reduction in the total obligation to be paid." The usual reason given for default in payment is that the annual charges are in excess of the district's ability to pay. However, in some cases, there probably is an ap- preciable element of unwillingness as well as inability to pay. Un- desirable features of contracts also may have contributed to delinquency. Virtually all of the earlier contracts provided for fixed annual payments without regard to fluctuation in economic condi- tions or to changes in the waterusers' ability to pay. Some projects were assessed on substantially more acres than were irrigated, others were authorized under 40-year repayment law with the informal understanding that the ability to repay in 40 years should be thoroughly reviewed before construction payments started. Contracts are now renegotiated on the basis of detailed investiga- tions by the Bureau of Reclamation regarding the district's ability to pay both operation and maintenance costs and construction charges under expected future average conditions. These contracts usually contain some formulae for adjusting the annual installment 11 An exception is a recent contract on the Tucumcari project which writes off construction charges in excess of the estimated amount that can be collected over a 40-year period. Congress also has written off all the construction charges for five small reclamation projects (approximately $3,325,000). Four of these were started in the early years in advance of adequate investigations and under pressure. Some- what more than $14,000,000 has been written off other projects primarily because of reclassification of land and the suspension of the poorer lands from paying status. Although some adjustments stemmed from the depression of the thirties which also caused substantial adjustments in other kinds of agricultural debts. 970 FEDERAL AID TO IRRIGATION on construction charges in accordance with changes which may oc- cur in farmers' dollar income and in the purchasing power of this income. Increased attention also has been given to the effect of differences in soils, topography, climate, markets, and other factors on the waterusers' ability to pay construction charges. Some recent contracts, such as those with the Columbia Basin Districts, allow for full recognition of these factors. These contracts specify differ- ential construction payments. During the 10-year development period, water rental charges in Columbia Basin are to be graduated in accordance with the estimated productivity of various grades of land to produce net income under average management. The desirability of adequate investigation prior to construction of projects was emphasized by the Fact Finders who stated that "success can come to future Federal Reclamation ventures only if projects are authorized upon a thoroughly scientific consideration of the probable power of the project to enable the farmer to repay construction costs and to win a living from irrigated lands. Com- munity and political demand to secure projects," they said, "should be considered only after full knowledge of the feasibility of a pro- posed project has been secured." Congress, in 1924, declared that no new project or new division of a project shall be approved for construction until detailed in- formation is secured concerning the water supply, the engineering features, the cost of construction, land prices, and the probable cost of development, and until a finding is made in writing that it is feasible, that it is adaptable for actual settlement and farm homes, and that it will probably return the cost thereof to the United States.12 A showing of feasibility and of probable return of costs to the United States had become increasingly more difficult: (1) because new developments have had to turn to more difficult and costly projects as the lower cost and more advantageously located sites became utilized; (2) because great and disproportionate increases in construction and development costs have occurred; (3) because thorough investigation itself costs something but especially because such investigations by close examination often disclose additional obstacles to be overcome which involve increased costs. Detailed land classification, for example, usually eliminates some land which would be classed as irrigable in a reconnaissance survey. 12 Subsection B. Section 4, Second Deficiency Act, 1924 (Fact Finders' Act). 971 WALTER U. FUHRIMAN In supporting their recommendatio