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Economic Impacts of Irrigated Agriculture

Tuesday, March 3, 2015

It’s clear the drought that has encompassed much of the United States in the past year has had a very real impact on consumers, who are already keeping a tight hold on their pocketbooks. People are actually starting to think about where their food comes from now.

That’s why “The Economic Importance of Irrigated Agriculture,” a 2012 report prepared by the Family Farm Alliance, is timely and important.

Even when much of the economy is faltering right now, irrigated agriculture remains one of the largest economic engines in the Western United States, according to the Alliance report. In the 17 Western states, the “irrigated agriculture industry”— made up of direct irrigated crop production, agricultural services and the food processing and packaging sectors—impacts total household income by an estimated $128 billion annually.

While this is certainly impressive, perhaps the most striking aspect of the new report is a discussion describing how important inexpensive food has been to the average American’s disposable income over the last 70 years. During the Great Depression, roughly 25% of a U.S. family’s disposable income was spent on food. In 2011, that percentage had dropped to 6.7%, the lowest of any country in the world.

By comparison, Russians spend 31% of their disposable income on food. That’s more than four times what U.S. consumers spend on food, and creates the opportunity to invest in nonfood goods.

Clearly, the declining costs of U.S. household food purchases affects discretionary income and, over time, has contributed substantially to the national economy by allowing more household income to be devoted to the purchase of consumer goods and services. Thus, the food security issue can be directly linked to general U.S. economic health because of its implications to the consumer spending economy.

The number one issue for federal and state agricultural policy decision-makers should be to maintain the United States’ 24-hour-a-day, every day access to low-cost, safe, high-quality food and fiber.  Irrigated agriculture in the Western United States has a huge role in the availability of that food.

To maintain that supply, we need policies that encourage agricultural producers to work together in a strategic, coordinated fashion. Federal water policy often reflects a “one size fits all” approach. Farmers, ranchers and other conservationists know that the best water solutions are unique, and come from the local, watershed and state level. They know we need policies that encourage agricultural producers, non-governmental organizations, and state and federal agencies to work together in a strategic, coordinated fashion.

We need to find ways to recruit young people into agriculture.

We need to modernize and rebuild parts of the institutional structures now in place, so that water resources can be managed specifically, not generically. State laws and institutions must be given deference in issues relating to water resource allocation, use, control and transfer. The best decisions on water issues happen at the state and local level. Aging water infrastructure must be addressed promptly and with priority commitments; failure to do so will create a failed legacy for the next generation. New water supplies must be developed to provide for recreational and environmental needs, allow for population growth and protect the economic vitality of the West.

We must get a handle on changing weather patterns and assess how these changes will impact the agricultural landscape and water security. And, we must develop a clear understanding of the impacts on our ability to feed the world—and limitations that may result—when we take domestic agricultural lands out of production as water tied to those lands is moved elsewhere.

Western farmers and ranchers can play a part in a solution to that crisis and can continue to provide affordable food on the grocery store shelves—if we can keep them on the farm.

Dan Keppen Dan Keppen (
Executive Director, Family Farm Alliance

View more posts by Dan Keppen

1 comment on “Economic Impacts of Irrigated Agriculture”

  1. Name
    Posted Wednesday, May 22, 2013 at 2:39:11 PM


The views and opinions expressed in AgChllenge2050 blog posts are solely the opinions of the authors, and not those of Farm Foundation, NFP.