Study Shows Program Increases Economic Value

Panhandle Groundwater Conservation District’s Precipitation Enhancement Program was recently included in a benefit-cost analysis study of Texas weather modification activities completed by Dr. Jason L. Johnson, associate professor at Texas A&M University and extension economist for Texas A&M AgriLife Extension Service. The study considers what impact an additional inch of rain will have on dryland crop acreage, irrigated crop acreage and grazing lands, and what economic gain this will provide to the areas of study and throughout the state. Besides PGCD’s Precipitation Enhancement Program two other programs were a part of the study including West Texas Weather Modification Association in San Angelo, Texas, and South Texas Weather Modification Association in Pleasanton, Texas.

According to Johnson, “The purpose of this analysis was to provide the framework for an economic assessment to agriculture of a hypothetical one inch of additional rainfall in counties participating in selected weather modification programs.” PGCD provided operating cost data which enabled a benefit-cost ratio to be calculated so the potential return on investment from increased agriculture production could be considered. Counties included in the study are those counties located within the PGCD district boundaries and includes portions of Armstrong, Potter and Hutchinson counties and all of Carson, Donley, Gray, Roberts and Wheeler counties.

After considering the increased dryland crop revenues, the cost savings to irrigated acreage and increased grazing land revenues from an additional inch of rainfall for the District the direct local economic impact is $4,877,938. In addition to the local economic impact, Johnson also calculated an estimate state economic impact using Impact Analysis for Planning output multipliers. These secondary impacts can help with increased economic stability and growth in the state and are not confined to the agricultural community. The estimated state impact for an additional inch of rainfall in the PGCD’s district is $9,407,140. After comparing these economic gains to the cost of the program the benefit-cost ratio for the PGCD’s Precipitation Enhancement Program is a $22.20 return on every $1.00 invested.

PGCD participated in this study to provide an educational resource to the District to help assess potential benefits versus cost of the program now and in the future. Johnson states that he used a very conservative stance during the study to avoid any overstate of potential benefits, and noted that if an additional inch of rainfall can be realized, the benefits will meet or exceed expectations. “Clearly this study shows that our program is a cost effective program and a prudent use of our tax dollars,” stated C.E. Williams, PGCD General Manager.

PGCD’s precipitation enhancement program started back up April 1 for its 16th year.