Using Hydro-Economic Modeling to Analyze the Allocation of Agricultural Water in the Southeastern U.S.

This paper summarizes the modeling framework used to determine the economic value of water for row crops using a partial equilibrium agricultural sector model designed for Tennessee and the Tennessee River Basin (TNAP). The objective of the paper is to outline a framework for determining water use by Tennessee’s agricultural sector, the relative value of water used by agriculture, and potential technology options for adapting to water scarcity with TNAP. The focus is on the major row crops produced in the region, specifically corn, soybeans, wheat, and cotton. Estimates of water availability are generated with predictive water balance models. Metrics for water use and demand are developed from three sources of data: a) primary and secondary farm-level data, b) regional economic-sectoral data, and c) cost-of-production data for crops commonly produced in the region. Shadow prices of water will be estimated by adjusting water quantities available for agricultural activities with the marginal productivity value of farm and non-farm activities.

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 Record created 2017-04-01, last modified 2019-08-30

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