Factors influencing the willingness to pay for on-farm water infrastructure

The use of on-farm surface water infrastructure for irrigation is a recommendation by water resource managers to address groundwater overdraft. A contingent valuation question estimates Arkansas producers9 willingness to pay (WTP) to convert farmland into an on-farm reservoir and tail-water recovery system. The estimated mean WTP to convert land into water storage is −US$1,748 ac−1 (−US$4,319 ha−1), but this WTP varies substantially across farms by irrigation practice and perception of water scarcity. Producers who use conservation practices or live in water scarce regions have a mean WTP between US$5,279 to US$21,124 ac−1 (US$13,045 to US$52,198 ha−1) while producers who do not use conservation practices or live in water abundant regions have a mean WTP between −US$7,424 and −US$12,025 ac−1 (−US$18,345 to −US$29,714 ha−1). The significant variation in the WTP suggests that conservation programs would be more cost-effective by tailoring extension activities and government cost-shares to regional- and producer-specific characteristics.