On-farm reservoirs: costs/benefits

On-farm reservoirs can reduce reliance on groundwater up to 90 percent. “That's high,” said Jennie Popp. “Tailwater recovery systems can also be coupled with reservoirs to capture even more water to be recycled through the farm.”

Reservoirs and tailwater systems have additional benefits. “They can reduce the amount of sediment by capturing it,” said the University of Arkansas associate professor of agricultural economics.

“We have some turbidity problems in the state — it's the number one problem for many farmers in the east. In addition to the sediment reduction, another thing to study is if these systems reduce nutrient and chemical runoff.”

When there are benefits, unfortunately, there are also costs, Popp told those attending the Arkansas Soil and Water Education Conference at Arkansas State University in Jonesboro, Ark.

On-farm reservoirs aren't cheap. There's a huge investment decision. Not only does it cost to build the reservoir, its placement could take viable cropland out of production. A producer must consider the potential revenue lost by cropland displacement.

“There are some opportunities for cost-sharing in building these structures. Producers found that the last farm bill had some EQIP provisions addressing irrigation efficiency. If you qualify, the (EQIP program) could reduce your cost.”

Popp said other factors that must be considered include:

  • What is your current groundwater situation? Are you one of the lucky ones that have water flowing from a well? Or are you in a limited situation?
  • What's your crop mix? Are you growing crops that are water-intensive?
  • How big is your farm? Is it big enough to need an on-site reservoir?
  • What's the length of the production period you're considering? How long do you expect to be in the farming business?

Popp said environmental regulations and concerns should be in the mix too.


Because there are various answers to the queries above, there is no one-size-fits-all solution. The decision must be made case by case manner. MARORA can help.

MARORA (Modified Arkansas Off-stream Reservoir Analysis) is a decision aid tool, a first step in determining whether or not a reservoir is practical on a given farm.

It estimates “what if” scenarios, said Popp:

  • What is the baseline water situation? Based on that what kind of returns can be expected from putting in a reservoir?
  • What if the water situation changes over time? How will that affect the practicality of a reservoir?
  • What if, suddenly, a TMDL is enacted calling for strict sediment control?

“These are the types of questions that can be addressed with MARORA. The program will tell you what happens when baseline factors change.”

MARORA uses weather, farm, field and economic data related to rice and soybean production — currently, the only two crops being used in the model — to simulate income and expenses associated with on-farm reservoirs.

“There are two ways to run the program. One is the optimization mode. This approach answers questions like ‘Considering this is the size of the field I want to irrigate, what's the optimal size of the reservoir I can put in to give the best return?’”

Or, the program can be run in the non-optimization mode. Using this, the size of the reservoir is plugged in and the amount of land it will successfully irrigate is calculated.

“Assume we have a farm with two water situations. First is an adequate supply — 50 feet of saturated depth and a very small loss of water annually. There's also a limited situation — 30 feet of saturated depth that is depleted at a much faster rate.

“We'll also look at best management practices (BMPs) and how they affect the practicality of a reservoir. Through use of BMPs, the analysis focuses on economic return, water savings and how much sediment movement is reduced.

“So we're looking at a 320-acre farm with a rice/soybean rotation. Keeping it simple, we'll assume no cost-share from EQIP, although the program can accommodate that factor.”

Looking at adequate water in this example shows it doesn't pay to build a reservoir. “Without a reservoir, you'll average $41,000 in returns, use almost 40 inches of water for rice and 26 for soybeans and lose some 381 tons of soil annually. To make this adequate situation worthwhile, a 75 percent cost-share is needed.”

However, the limited situation shows something different. “With a 76-acre reservoir (about 680 acre feet), you'll see the most beneficial results. Because of the added cost of production and loss of cropland, your returns will be lower at $32,000. However, while using the same amount of water, you only lose 64 tons of soil and are able to recapture over 250 tons.”

Popp cautions that MARORA is only “a first step decision aid tool. Will it tell you exactly whether a reservoir is perfect for you? No, it won't — that's not its purpose.”

When asked whether reservoirs are practical, Popp said, “You never ask an economist a yes or no question. We don't answer questions directly. Our answer is always, ‘it depends.’ In this case, that's especially true.”

EDITOR'S NOTE: If you are interested in the MARORA model, copies have been distributed to many Arkansas Extension offices. Additional information can be obtained from Jim Smartt at 479-575-2378.)

e-mail: [email protected]iness.com

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