The Texas Panhandle is one of the most unique and diversified agricultural areas in the world. Production agriculture contributes $3.41 billion in value-added production and more than $6.32 billion in economic activity annually. Eighty-five percent of the state's fed beef, 45.8 percent of the wheat, 61.9 percent of the corn, and 23.0 percent of the sorghum are produced in the region. The growing livestock industry has accelerated the demand for feed grains in the area and has increased irrigation water demand. The Ogallala Aquifer is the primary source of irrigation water in the region. The depletion of the Ogallala by the excessive pumping of water is threatening the rural economy of the area. There is a critical need for developing sound water management policies that may result in balancing utilization and extending the life of the Ogallala to sustain the rural economies. Greater efficiency from the application of irrigation water through effective water management strategies and reallocation to higher value products can greatly reduce the rate of decline of the rural community and stabilize the availability of services in the area. The development of value added industries and transportation and distribution centers, and the expansion of medical and retirement facilities could significantly increase job availability and add stability to the rural communities.