Gerald Bowes, Ph.D. Manager, Cal/EPA Scientific Peer Review Program
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Gerald Bowes, Ph.D. Manager, Cal/EPA Scientific Peer Review Program
TO: Gerald Bowes, Ph.D. Manager, Cal/EPA Scientific Peer Review Program Office of Research, Planning and Performance FROM: Patricia Fernandez Senior Water Resources Engineer DIVISION OF WATER RIGHTS DATE: March 22, 2012 SUBJECT: REQUEST FOR EXTERNAL PEER REVIEW OF AGRICULTURAL ECONOMIC MODELING FOR THE PHASE 1 UPDATE TO THE 2006 WATER QUALITY CONTROL PLAN FOR THE SAN FRANCISCO BAY/SACRAMENTO-SAN JOAQUIN DELTA ESTUARY (2006 BAY-DELTA PLAN) In accordance with Health and Safety Code section 57004, the State Water Resources Control Board (State Water Board), Division of Water Rights (Division) submits this request for identification of at least three peer reviewers to conduct a peer review of the State Water Board’s draft report titled “Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives” (Agricultural Economics Report). This report is part of the environmental documentation being prepared by the State Water Board in support of potential Phase 1 modifications to the 2006 Bay-Delta Plan, which include modifications to the San Joaquin River flow objectives for the protection of fish and wildlife beneficial uses, and water quality objectives for the protection of southern Delta agricultural beneficial uses and the program of implementation for those objectives. The Draft Agricultural Economics Report was developed to provide estimates of the potential effects to agricultural production and related sectors of the Lower San Joaquin River (LSJR) watershed economy from estimated changes in allowable surface water diversions that may be needed to achieve potential LSJR flow alternatives. For this peer review, we suggest that you solicit reviewers with expertise in the following areas: 1. Agricultural economics 2. Experience with the use of economic models, such as the Statewide Agricultural Production (SWAP) and Impact Analysis for Planning (IMPLAN) models, and the interpretation of model results The following attachments are enclosed in this request: Attachment 1: Plain English Summary of the Draft Report “Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives” Gerald Bowes, Ph.D. -2- MAR 22 2012 Attachment 2: Listing of Economic Conclusions or Assumptions Subject to Review Attachment 3: List of Participants Involved in Development of the Draft Agricultural Economics Report Attachment 4: Rationale for the Development of the Draft Agricultural Economics Report Attachment 5: Draft Agricultural Economics Report Expected Date of State Water Board Action: The State Water Board released the Draft Agricultural Economics Report for public review on February 24, 2012, and will be holding a public workshop on this report and the related environmental documentation in June 2012. The final documents are anticipated to be released in August 2012. In order to meet this schedule, we request receipt of the peer reviewers’ comments within 20 days of receipt of the peer review package. If you have any questions regarding this request, please contact me at (916) 319-9141, or via email at [email protected]. Attachments cc: Les Grober Assistant Deputy Director Division of Water Rights Diane Riddle Environmental Program Manager Hearings and Special Projects Section Karen Niiya Senior Water Resource Control Engineer Special Projects Unit Mark Gowdy Senior Water Resource Control Engineer Special Projects Unit Gerald Bowes, PhD. -3- MAR 22 2012 Attachment 1: Plain English Summary of the Draft Report “Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives” INTRODUCTION The State Water Resources Control Board (State Water Board) is in the process of reviewing and potentially modifying the San Joaquin River flow objectives for the protection of fish and wildlife beneficial uses and water quality objectives for the protection of southern Delta agricultural beneficial uses and the program of implementation for those objectives included in the 2006 Water Quality Control Plan for the San Francisco Bay/Sacramento-San Joaquin Delta Estuary (2006 Bay-Delta Plan). In support of that review, the State Water Board is developing environmental and technical documents that analyze potential amendments to the 2006 BayDelta Plan and their associated potential environmental and economic impacts. Part of the State Water Board’s evaluation of potential economic impacts is contained in a draft report titled “Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives” (Agricultural Economics Report), which is the subject of this peer review. The Draft Agricultural Economics Report provides estimates of the potential effects to agricultural production and related sectors of the Lower San Joaquin River (LSJR) watershed economy from estimated changes in allowable surface water diversions that may be needed to achieve potential LSJR flow alternatives. This analysis does not address potential effects to other beneficial uses or environmental resources potentially caused by the LSJR flow alternatives. Those effects will be addressed separately in the environmental document that will be written for the proposed amendments to the 2006 Bay-Delta Plan. The analysis in the Draft Agricultural Economics Report followed three major steps. First, the LSJR flow alternatives’ effects on allowable surface water diversions were estimated relative to baseline conditions using the Water Supply Effects (WSE) model previously described in Chapter 5 of the State Water Board’s October 2011 Draft Scientific Basis for San Joaquin River Flow and Southern Delta Salinity Objectives (Scientific Report). For the purposes of the analysis, baseline flow conditions were assumed to be the conditions that existed in the LSJR watershed in 2009. Second, the Statewide Agricultural Production (SWAP) model, an agricultural production model, was used to estimate the direct effect of the changes in allowable surface water diversions on agricultural production and related revenues. Third, the Impact Analysis for Planning (IMPLAN), a regional economic model, was used to estimate the total economic and jobs effects, including the indirect and induced effects, of the changes in allowable surface water diversion on agricultural production on all connected sectors of the regional economy. Please note that the analysis and results reported in the section of the Draft Agricultural Economics Report titled “Surface Water Diversion Estimates” are used as inputs to the economic analysis, and are not the subject of this peer review. As stated previously, the surface water diversion estimates were generated using methods described in a previously peer-reviewed document, the Scientific Report, which can be found at: http://www.waterboards.ca.gov/waterrights/water_issues/programs/bay_delta/bay_delta_plan/w ater_quality_control_planning/docs/scientific_report.pdf. The peer review comments on the Scientific Report can be found at: http://www.swrcb.ca.gov/water_issues/programs/peer_review/sanjoaquin_river_flow.shtml Gerald Bowes, PhD. -4- MAR 22 2012 The State Water Board will make a determination, concerning the required percentage of unimpaired flow, based, in part, on the consideration of environmental impacts of LSJR flow alternative percentages (20, 40, and 60 percent), economic information, and information concerning other competing beneficial uses of water. The State Water Board is required to consider a reasonable range of economic factors and economic considerations in its deliberative process. The Draft Agricultural Economics Report that is the subject of this peer review provides an analysis of the potential agricultural economic effects of the range of unimpaired flows (20 to 60 percent) that are being considered. The conclusions in the Draft Agricultural Economics Report will be used to inform the State Water Board’s decision-making process in the selection of the preferred LSJR flow alternative. Gerald Bowes, PhD. -5- MAR 22 2012 Attachment 2: Listing of Economic Conclusions or Assumptions Subject to Review The statutory mandate for external scientific peer review (Health and Safety Code, § 57004) states that the reviewer's responsibility is to determine whether the scientific portion of any proposed rule is based upon sound scientific knowledge, methods, and practices. Similarly, for this review of the agriculture-related economic effects, we request that you make a determination whether the subject economic analysis is based upon sound economic knowledge, methods, and practices. This determination should be made for each of the following issues regarding the analyses in the draft report titled “Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives” (Agricultural Economics Report). An explanatory statement is provided for each issue to focus the review. For those work products which are not proposed rules, such as the case with the review that is the subject of this document, reviewers must measure the quality of the product with respect to the same exacting standard as if it was subject to Health and Safety Code section 57004. The State Water Board requests that the peer reviewers review the Draft Agricultural Economics Report, which includes estimates of the potential effects on agricultural production and related Lower San Joaquin River (LSJR) watershed economy from estimated changes in allowable surface water diversions needed to meet potential LSJR flow alternatives. This peer review is requested to assure that the best economic analysis and available models are appropriately used and interpreted. Please note that the analysis and results reported in the section of the report titled “Surface Water Diversion Estimates” are used as inputs to the economic analysis, and are not the subject of this peer review. These inputs were generated using methods described in a previously peer-reviewed document, titled “Draft Scientific Basis for San Joaquin River Flow and Southern Delta Salinity Objectives (Scientific Report) which can be found at: http://www.waterboards.ca.gov/waterrights/water_issues/programs/bay_delta/bay_delta_plan/w ater_quality_control_planning/docs/scientific_report.pdf. In the event peer reviewers have a question on a topic or issue in the Draft Agricultural Economics Report, which requires further clarification from the State Water Board, they are asked to submit their request for clarification to Patricia Fernandez via email at [email protected]. All requests for clarification will be responded to via email and will be made a part of the report. Economic Conclusions or Assumptions Regarding the Analysis Approach in the Draft Agricultural Economics Report 1. Use of the Statewide Agricultural Production (SWAP) model was based on sound economic knowledge, methods, and practices. State Water Board staff reviewed models for estimating agricultural production and revenues associated with the surface water diversions potentially needed under the LSJR flow alternatives and baseline conditions. Staff found that the SWAP model was an appropriate model for estimating the effect of the LSJR flow alternatives and baseline conditions. For the purposes of this analysis, the SWAP model was calibrated to the Department of Water Resources (DWR) estimates of land use and applied water data for Gerald Bowes, PhD. -6- MAR 22 2012 water year 2005, because this water year represented the most recent normal water year in terms of both water availability and crop prices. This data is presented in Table X-7 of the report. Annual surface water diversion changes estimated in the section of the report titled “Surface Water Diversion Estimates” were input to the SWAP model to estimate the associated agricultural production and revenues. For each water year, SWAP uses a Positive Mathematical Programming (PMP) methodology to calculate the crop acreage mix that would maximize revenue from the annual available surface water diversions. The output from the SWAP model was used as input to the IMPLAN model. State Water Board staff believes the use of the SWAP model with the described assumptions and approach was based on sound economic knowledge, methods, and practices. 2. Use of version 3 of the Impact Analysis for Planning (IMPLAN) model was based on sound economic knowledge, methods, and practices. Version 3.0 of the IMPLAN model was used to predict the indirect, and induced economic effects associated with the changes to agricultural direct revenue estimated by the SWAP model. Output from the SWAP model, appropriate region-specific multipliers, and other assumptions, were input to IMPLAN to estimate the indirect and induced economic activity on the agricultural industry in the LSJR, and related effects on other connected sectors of the economy. State Water Board staff believes the use of the IMPLAN model with the described assumptions and approach was based on sound economic knowledge, methods, and practices. 3. The LSJR flow alternatives have the potential to affect the amount of allowable surface water diversions from within the LSJR watershed. The economic analysis assumes that construction or installation of alternative water supplies would not be implemented in response to changes in estimated allowable surface water deliveries. Staff believes this is a conservative assumption. For the purposes of this analysis it was assumed that irrigation water from alternative water supplies, such as groundwater pumping or Central Valley Project water deliveries, would not be increased to make up for any decrease in surface water diversions. This is a conservative assumption that would result in higher economic impacts than an analysis that assumes implementation of alternative water supplies. 4. Reasonableness of other assumptions. Other assumptions beyond those identified above were utilized in the analysis. For example, a time series of 82 annual estimates of differences in crop acreages and revenue was used to estimate effects on crop acreages and agricultural revenue. It was also assumed that surface water diversion reductions can be applied equally across the Central Valley Production Model regions analyzed. Another key assumption in the IMPLAN analysis was that trading patterns between industries were fixed. State Water Board staff believes these assumptions and others, as described in the report, are conservatively valid and are consistent with those used in similar types of economic analyses. 5. The level of effort used in analyzing the potential economic effects to agriculture covers a reasonable range of economic factors and considerations. As a certified regulatory program, the State Water Board is required to take economic considerations into account, but is not required to perform a cost/benefit analysis. Therefore, State Water Board staff believes the level of detail in the report’s analysis Gerald Bowes, PhD. -7- MAR 22 2012 appropriately considers a reasonable range of economic factors and economic considerations as they relate to the impacts of the proposed project on agriculture, is consistent with the requirements of a certified regulatory program, and provides adequate input to the State Water Board’s decision-making process. 6. The results of the analysis are valid. The Draft Agricultural Economics Report contains conclusions regarding the agricultural economic effects of the proposed flow alternatives. Table X-9 of the report displays the predicted changes in economic output for crop production that would be associated with the proposed flow alternatives. Estimates of total sector output changes from baseline conditions ranged from an increase of 0.3 percent to a decrease of 4.1 percent. Table X-10 of the report displays the estimated change in regional employment that would be associated with the proposed flow alternatives, which ranged between an increase of 0.3 percent to a reduction of 4.1 percent from baseline conditions. State Water Board staff believes these results are valid estimates of the effects of the proposed flow alternatives on the regional economy of the LSJR watershed. 7. Other Issues Additionally, reviewers are not limited to addressing only the specific issues presented above, and are asked to contemplate the following “Big Picture” questions: In reading the Draft Agricultural Economics Report, are there any additional agriculturerelated economic issues that should be a part of the report’s analysis that are not described above? Effects of the LSJR flow alternatives on other non-agriculture related sectors of the economy will be addressed elsewhere in the SED. Taken as a whole, is the report’s analysis based upon sound economic knowledge, methods, and practices? Reviewers should note that some conclusions or proposed actions, for instance selection of flow alternatives for the amended Bay-Delta Plan, may rely significantly on professional judgment in instances where economic data and our understanding of the underlying processes are not as extensive as may be ideal. Nonetheless, the evaluation of the economic data and use of professional judgment are appropriate in the context of current economic knowledge regarding such actions. In these situations, the proposed course of action is favored over no action. The preceding guidance will ensure that reviewers have an opportunity to comment on all aspects of the agriculture-related economic effects of the proposed State Water Board action. At the same time, reviewers also should recognize that the State Water Board has a legal obligation to consider and respond to all feedback on the proposed rules. Because of this obligation, reviewers are encouraged to focus feedback on economic issues that are relevant to the central regulatory elements being proposed. Gerald Bowes, PhD. -8- MAR 22 2012 Attachment 3: List of Participants Involved in Development of the Draft Agricultural Economics Report State Water Board staff, with the assistance of consultants, prepared this report using regulatory guidance, available economic literature, and the examples of other regulatory programs. ICF International and UC Davis are assisting the State Water Board with the development of a Substitute Environmental Document and supporting documents, which include this report. ICF International and UC Davis are under separate consultant contracts with the State Water Board. State Water Board staff: Les Grober Mark Gowdy Lucas Sharkey Collaborating non-staff members: Russ Brown (ICF International) Nicole Williams (ICF International) Tom Wegge (ICF International subconsultant) Mark Roberson (ICF International subconsultant) Richard Howitt (UC Davis) Josue Medellin-Azuara (UC Davis) Jay Lund (UC Davis) Gerald Bowes, PhD. -9- MAR 22 2012 Attachment 4: Rationale for the Development of the Draft Agricultural Economics Report San Francisco Bay/Sacramento-San Joaquin Delta Estuary Water Quality Control Planning The State Water Resources Control Board (State Water Board) is in the process of reviewing and potentially modifying the San Joaquin River flow objectives for the protection of fish and wildlife beneficial uses and water quality objectives for the protection of southern Delta agricultural beneficial uses and the program of implementation for those objectives included in the 2006 Water Quality Control Plan for the San Francisco Bay/Sacramento-San Joaquin Delta Estuary (2006 Bay-Delta Plan). The State Water Board is considering amendments to the 2006 Bay-Delta Plan pursuant to the provisions of the Porter-Cologne Water Quality Control Act (Porter-Cologne) and the federal Clean Water Act. Fundamentally, a water quality control plan consists of three parts: 1) establishment, for the waters within a specified area, of the beneficial uses to be protected; 2) establishment of water quality objectives; and 3) a program of implementation (Wat. Code, § 13050(j)). Together, the beneficial uses and the water quality objectives established to reasonably protect the beneficial uses are called water quality standards, under the terminology of the federal Clean Water Act. Components of the Bay-Delta Plan when implemented also: 1) carry out provisions of the reasonable use doctrine (Cal. Const. Art. X, § 2; Wat. Code, §§ 100, 275, and 1050); 2) protect public trust resources (See National Audubon Society v. Superior Court (1983) 33 Cal.3d 419, 189 Cal.Rptr. 346); and 3) carry out statutory principles pertaining to water rights (Wat. Code, §§ 183, 1243, 1243.5, 1251, 1253, and 1256-1258). As such, the 2006 Bay-Delta Plan addresses the interrelated fields of water quality and water supply and plans for their coordination. The current San Joaquin River flow objectives for the protection of fish and wildlife beneficial uses are included in Table 3 on page 15 of the 2006 Bay-Delta Plan, and the program of implementation for these objectives starts on page 23. Water quality objectives for the protection of agricultural beneficial uses are currently included in Table 2 on page 13 of the 2006 Bay-Delta Plan, and the program of implementation for these objectives starts on page 27. Draft Changes to the 2006 Bay-Delta Plan The State Water Board developed a report titled “Technical Report on the Scientific Basis for Alternative San Joaquin River Flow Objectives for the Protection of Fish and Wildlife Beneficial Uses and Water Quality Objectives for the Protection of Southern Delta Agricultural Beneficial Uses and the Program of Implementation for Those Objectives” (Technical Report) in October 2010. The report was modified in response to comments received at two public workshops in 2011, and then submitted for scientific peer review in October 2011. A revised draft of the Technical Report, renamed the Draft Scientific Basis for San Joaquin River Flow and Southern Delta Salinity Objectives (Scientific Report), was released in February 2012, and contained modifications to address the comments received through the scientific peer review. This report contains State Water Board staff’s review of existing scientific information concerning flow needs for the protection of fish and wildlife beneficial uses in the San Joaquin River basin, and salinity and other needs for the protection of southern Delta agricultural beneficial uses. The Scientific Report also contains information about tools that will be used to develop and evaluate alternatives for those objectives. The tools described in the Scientific Report were used to develop the flow inputs needed for the economic analysis in the Draft Agricultural Economics Report. Gerald Bowes, PhD. - 10 - MAR 22 2012 One of the conclusions in the Scientific Report is that higher and more variable inflows during the spring period (February through June) from the three salmon bearing tributaries to the mainstem San Joaquin River (Stanislaus, Tuolumne, Merced Rivers) are needed to reasonably protect fish and wildlife beneficial uses. The Scientific Report also noted, however, that flow objectives established for the reasonable protection of fish and wildlife beneficial uses would need to consider the competing demands for water. Competing beneficial uses of water in the San Joaquin River watershed include municipal and industrial, agricultural, and other environmental uses. The State Water Board’s draft program of implementation for the flow objectives specifies that the narrative San Joaquin River flow objective is to be implemented through water right actions, water quality actions, and actions by other agencies in an adaptive management framework informed by required monitoring, special studies, and reporting. The purpose of the implementation framework is to achieve the narrative San Joaquin River flow objective by: 1) providing less altered flow conditions that more closely mimic the shape of the unimpaired1 hydrograph, including: increased flow of a more natural spatial and temporal pattern; 2) providing for adaptive management, in order to respond to changing information on flow needs and to minimize water supply costs; and 3) allowing for and encouraging coordination and integration of existing and future regulatory processes. Specifically, the draft program of implementation provides for maintaining a certain percent of unimpaired flow (20 to 60 percent), during February through June, from each of the three salmon bearing tributaries to the mainstem San Joaquin River at Vernalis. A minimum flow that must be maintained at Vernalis during this period, along with a maximum flow at which point additional flows would not be required, will also be specified. Statutory Requirements for Economic Analysis The State Water Board’s water quality control planning process is a certified regulatory program under the California Environmental Quality Act (CEQA), and is not required to prepare an environmental impact report. Instead, certified regulatory programs are required to prepare a substitute environmental document (SED) that describes the proposed project, project alternatives, and mitigation measures to avoid or reduce any significant or potentially significant effects that the project might have on the environment. As such, the State Water Board is not required to include a discussion of economic or social effects, or an economic cost/benefit analysis of a proposed project. However, California Public Resources Code section 21159(a)(c) requires environmental analyses conducted in accordance with a certified regulatory program to take into account a reasonable range of environmental, economic, and technical factors, population and geographic areas, and specific sites. In addition, California Water Code section 13141 specifies that a water quality control plan shall include an estimate of the total cost of the program, together with identification of potential sources of funding, and that when establishing water quality objectives, the State Water Board must take economic considerations into account (among other things). 1 In this case, unimpaired flow is a modeled flow generally based on historical gage data with factors applied to primarily remove the effects of dams and diversions within the watersheds. The modeled unimpaired flow does not attempt to remove changes that have occurred such as channelization and levees, loss of floodplain and wetlands, deforestation, and urbanization. Gerald Bowes, PhD. - 11 - MAR 22 2012 There is a high level of stakeholder interest in the water quality planning process for amending the 2006 Bay-Delta Plan due to the wide variety of beneficial uses associated with the waters of the Delta. Examples of the beneficial uses of the Delta include agricultural supply, municipal and domestic supply throughout a large portion of California, hydroelectric generation, fish migration, and preservation of endangered species. Given the level of stakeholder interest, the State Water Board has chosen to prepare an analysis of the potential economic effects to agriculture that may result from the proposed flow alternatives. State Water Resources Control Board California Environmental Protection Agency DRAFT APPENDIX X*: AGRICULTURAL ECONOMIC EFFECTS OF LOWER SAN JOAQUIN RIVER FLOW ALTERNATIVES February 2012 *Lettering of Appendix to be determined during the preparation of the Draft Substitute Environmental Document Appendix X DRAFT Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives X.1 Table of Contents Appendix X DRAFT Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives .............................................................................................................. X‐1 X.1 Table of Contents ............................................................................................................. X‐1 X.2 Introduction ..................................................................................................................... X‐2 X.3 Surface Water Diversion Estimates ................................................................................. X‐3 X.3.1 WSE Model Inputs and Approach .................................................................................... X‐3 X.3.2 Summary of Results ......................................................................................................... X‐6 X.4 Effects on Agricultural Production ................................................................................. X‐12 X.4.1 SWAP Model Overview .................................................................................................. X‐12 X.4.2 Model Inputs and Approach .......................................................................................... X‐14 X.4.3 Summary of Results ....................................................................................................... X‐19 X.5 X.6 Effects on Regional Economy ......................................................................................... X‐28 X.5.1 IMPLAN Model and Approach ....................................................................................... X‐28 X.5.2 Summary of Results ....................................................................................................... X‐29 References ..................................................................................................................... X‐34 DRAFT Evaluation of San Joaquin River Flow and Southern Delta Water Quality Objectives and Implementation X‐1 February 2012 ICF 00427.11 State Water Resources Control Board California Environmental Protection Agency X.2 DRAFT Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives Introduction AgriculturalproductionintheLowerSanJoaquinRiver(LSJR)watershedisdependentonirrigation watersupplyfromvarioussources,includingsurfacewaterdiversions,groundwaterpumping,and deliveriesfromthestateandfederalwaterprojects.TheLSJRflowobjectiveshavethepotentialto affecttheamountofallowablesurfacewaterdiversionsfromwithintheLSJRwatershed,andhence agriculturalproductiondependentonthosediversions. Theanalysisinthisappendixestimatesthepotentialeffectstoagriculturalproductionandrelated sectorsoftheLSJRwatershedeconomyfromestimatedchangesinallowablesurfacewater diversionsneededtomeettheLSJRflowalternatives.Thisanalysisdoesnotaddresspotential effectstootherbeneficialusesorenvironmentalresourcespotentiallycausedbytheLSJRflow alternatives.ThoseeffectsareaddressedseparatelyinvariouschaptersoftheSubstitute EnvironmentalDocument(SED). Theanalysisinthisappendixfollowsthreemajorsteps,eachdescribedinSectionsX.3throughX.5 below.First,theeffectsonallowablesurfacewaterdiversionsforeachoftheLSJRalternativesare estimatedrelativetobaselineconditionsusingtheWaterSupplyEffects(WSE)model.Forthe purposesoftheanalysis,baselineflowconditionsarethoserepresentingwhatexistedintheLSJR watershedin2009.Second,theStatewideAgriculturalProduction(SWAP)model,anagricultural productionmodel,isusedtoestimatethedirecteffectofthesechangesonagriculturalproduction andrelatedrevenues.Third,ImpactAnalysisforPlanning(IMPLAN),aregionaleconomicmodel,is usedtoestimatethetotaleconomicandjobseffects,includingtheindirectandinducedeffects,of thesechangesinagriculturalproductiononallconnectedsectorsoftheregionaleconomy. TherearethreeLSJRflowalternatives,eachconsistingofspecifiedpercentageofunimpairedflow requirementfortheStanislaus,Tuolumne,andMercedRivers.Foraparticularalternative,each tributarymustmeetthespecifiedpercentageofitsownunimpairedflowatitsconfluencewiththe LSJRduringthemonthsofFebruarythroughJune.Thepercentageunimpairedflowrequirements are20%,40%and60%respectivelyforeachLSJRflowalternative,andapplywhenflowsare otherwisebelowaspecifiedtriggerlevel.Flowsmustnotdropbelowspecifiedlevelsoneach tributary,andtogethermustmaintainaminimumflowontheSJRatVernalis.Specifictriggerand minimumflowlevelsandotherdetailsoftheLSJRflowalternativesarepresentedinSection3.2of theSED,andarethebasisforhowthealternativesaremodeledinthisappendix. TheallowablesurfacewaterdiversionsandassociatedagriculturalproductiongeneratedbySWAP andrelatedeconomicvalueestimatedbyIMPLANforeachoftheLSJRflowalternativesare comparedagainstthoseestimatedforbaselineflowconditionsintheLSJRwatershed.Thenet differenceistheagriculturalproductionandrelatedeconomiceffectattributedtoimplementingthat alternative.TheanalysesincorporatesseveralconservativeassumptionsasdetailedinSectionsX.3 throughX.5,including:noincreaseduseofgroundwatertoaugmentwatersupplyreductionsforthe SWAPanalysisandfixedtradingpatternsbetweenindustriesforIMPLAN.Ingeneral,asflow requirementsoneachoftheriversincrease,thesurfacewaterdiversionswouldneedtodecrease, andhaveacorrespondingeffectonagriculturalproductionandtheregionaleconomy. DRAFT Evaluation of San Joaquin River Flow and Southern Delta Water Quality Objectives and Implementation X‐2 February 2012 ICF 00427.11 State Water Resources Control Board California Environmental Protection Agency X.3 DRAFT Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives Surface Water Diversion Estimates ThissectiondescribesinputstotheStateWaterBoardLSJRWSEmodelanditsestimatesof allowableagriculturalsurfacewaterdiversionsforthethreeLSJRflowalternatives.Italsodescribes thedifferencesbetweenthoseestimatesandthebaselinecondition.AnoverviewoftheWSEmodel anditscalculationsarepresentedinAppendixX(drafttechnicalreport).Toimprovetheresolution ofthisanalysis,inadditiontothe20%,40%,and60%unimpairedflowLSJRalternatives,model runswerealsoperformedatintermediatelevelsof30%and50%ofunimpairedflow.Estimatesof thesurfacewaterdiversionsallowableunderbaselineconditionswereobtaineddirectlyfromthe “Current(2009)Conditions”CALSIMIImodelrunfromtheCaliforniaDepartmentofWater Resources(DWR)StateWaterProjectReliabilityReport2009.Theseestimatesarethenusedas inputstotheagriculturalproductionmodeldescribedfurtherinSectionX.4. X.3.1 WSE Model Inputs and Approach TheWSEmodelisamonthlywaterbalancespreadsheetmodelthatestimatesallowablesurface waterdiversionsandreservoiroperationsneededtoachievethetargetflowrequirementsofthe LSJRflowalternativesonthethreeeast‐sidetributariestotheLSJR.Amoredetaileddescriptionof thecalculationsinthemodelispresentedinAppendixX(drafttechnicalreport).Themodelallows foruser‐definedconstraintsoneachtributary,including:1)minimumandmaximummonthlyflows, 2)diversiondeliveryrulecurves,3)monthlydiversiondistributionpatterns,and4)reservoirflood controlstoragelimitations.Withintheseconstraintsthemodelusesawaterbalancetocalculatethe resultingriverflows,allowablesurfacewaterdiversions,andreservoirstoragelevels.Model calculationsareperformedonamonthlytimestepforeachtributaryusingthe82yearsofCALSIMII hydrologyasinputtoNewMelones,NewDonPedro,andLakeMcClurerespectively. Model Inputs ThefollowingsetsofinputswereusedintheWSEmodeltoestimatetheeffectsoftheLSJRFlow Alternatives: TableX‐1containstheminimummonthlyflowrequirementsandmaximumtriggerlevelsfor eachtributary.ThetargetpercentunimpairedflowrequirementsforaparticularLSJRflow alternativeonlyapplywhenflowsarebelowthespecifiedtriggerleveloneachtributary.This eliminatesthepercentageunimpairedflowrequirementwhenflowsareabovealevelthatcould potentialcontributetofloodingorothernegativedownstreameffects;althoughreservoirflood controlreleases,asrequiredbytheU.S.ArmyCorpsofEngineers(USACE),couldotherwise causeriverflowstoexceedtheselimits.Flowsmustnotdropbelowspecifiedlevelsoneach tributary,andtogethermustmaintainaminimumflowontheSJRatVernalisfortheprotection offisheriesinthetributariesandLSJR. TablesX‐2athroughX‐2cshowtheuser‐defineddiversiondeliveryrulecurvesusedinthis analysisforeachofthethreemainreservoirs(NewMelones,NewDonPedro,andLake McClure).TheserulecurvesrelatetheendofJanuarystorageeachyeartotheallowabletotal surfacewaterdiversions(asapercentageofthemaximumallowableannualdiversion)forthe remainderofthatyear,startinginFebruaryandendingthefollowingJanuary.Intheir respectivetables,Januarystorageforeachreservoirisdividedintofourlevelswith correspondingannualcutbackpercentagesfordiversions.Thefirstandfourthlevelsrepresent maximumstorageanddead‐pool(minimum)storageforeachreservoir.Thecurveswere DRAFT Evaluation of San Joaquin River Flow and Southern Delta Water Quality Objectives and Implementation X‐3 February 2012 ICF 00427.11 State Water Resources Control Board California Environmental Protection Agency DRAFT Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives developediterativelytomaximizediversionsandminimizethenumberofyearsresultingin carryoverstoragelowerthan300thousandacrefeet(TAF),500TAF,and200TAFforNew Melones,NewDonPedro,andLakeMcClurereservoirsrespectively.Maximumallowableannual surfacewaterdiversionswereestablishedat750TAF,1,100TAF,and625TAFonthe Stanislaus,Tuolumne,andMercedriversrespectivelybasedonthemaximumdiversionrates allowedintheCALSIMmodel. TableX‐3showshowtheannualallowablesurfacewaterdiversions(asdeterminedbythe diversiondeliveryrulecurvedescribeabove)aredistributedacrosseachmonthoftheyear startinginFebruaryandendingthefollowingJanuary.AsexplainedinAppendixX(draft technicalreport),themonthlydiversiondistributionpatternsusedforeachtributaryare derivedfromthesamepatternexhibitedintheCALSIMbaselinemodelrun. TableX‐4containsthefloodcontrolstoragelimitationsusedintheWSEmodelforNewMelones, NewDonPedro,andLakeMcClurereservoirs.Thesearebasedonamonthlyinterpretationof USACEfloodcontrolcurvesforeachreservoir.Whenstoragewouldotherwisebegreaterthan theselimitations,theWSEmodelreleasestheadditionalflowtobringthestoragelevelsdownto thelimitation. Table X‐1. Minimum Monthly Flow Requirements and Maximum Trigger Levels Input to WSE Model for Each LSJR Flow Objective Alternative MinimumMonthlyFlow(cfs) MaximumTriggerFlow(cfs) Calendar Month Stanislaus Tuolumne Merced Stanislaus Tuolumne Merced 2 150 200 150 2,500 3,500 2,000 3 150 200 150 2,500 3,500 2,000 4 150 200 150 2,500 3,500 2,000 5 150 200 150 2,500 3,500 2,000 6 150 200 150 2,500 3,500 2,000 Notes:NoflowssetforJulythroughJanuaryasnochangesfrombaselineflowaremadeinthosemonths. cfs=cubicfeetpersecond Table X‐2a. Stanislaus River Diversion Delivery (Cutback) Curves at New Melones Reservoir for each LSJR Flow Objective Alternative New Melones Stanislaus 20%Alternative 30%Alternative 40%Alternative 50%Alternative 60%Alternative Storage Delivery Storage Delivery Storage Delivery Storage Delivery Storage (TAF) (%) (TAF) (%) (TAF) (%) (TAF) (%) (TAF) (%) Level1 1,970 100% 1,970 100% 1,970 100% 1,970 90% 1,970 80% Level2 1,500 95% 100 50% 100 40% 100 35% 100 30% Level3 100 50% 99 Level4 99 0% NA 0% NA 99 NA 0% NA 99 NA 0% NA 99 NA 0% NA DRAFT Evaluation of San Joaquin River Flow and Southern Delta Water Quality Objectives and Implementation X‐4 Delivery February 2012 ICF 00427.11 State Water Resources Control Board California Environmental Protection Agency DRAFT Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives Table X‐2b. Tuolumne River Diversion Delivery (Cutback) Curves at New Don Pedro Reservoir for Each LSJR Flow Objective Alternative NewDon Pedro– Tuolumne 20%Alternative 30%Alternative 40%Alternative 50%Alternative 60%Alternative Storage Delivery Storage Delivery Storage Delivery Storage Delivery Storage (TAF) (%) (TAF) (%) (TAF) (%) (TAF) (%) (TAF) Delivery (%) Level1 1,690 95% 1,690 85% 1,690 80% 1,690 70% 1,690 65% Level2 1,000 55% 850 45% 1,000 45% 1,000 38% 1,000 30% Level3 115 20% 115 15% 115 10% 115 5% Level4 114 0% 114 0% 114 0% 114 0% 115 NA 0% NA Table X‐2c. Merced River Diversion Delivery (Cutback) Curves at Lake McClure for Each LSJR Flow Objective Alternative. 20%Alternative 30%Alternative 40%Alternative 50%Alternative 60%Alternative Lake McClure Merced Storage Delivery Storage Delivery Storage Delivery Storage Delivery Storage Delivery (TAF) (%) (TAF) (%) (TAF) (%) (TAF) (%) (TAF) (%) Level1 675 95% 675 90% 675 85% 675 80% 675 75% Level2 100 40% 300 60% 100 30% 100 25% 100 20% Level3 99 NA 0% NA 100 30% 99 0% 99 NA 0% NA 99 NA 0% NA 99 NA 0% NA Level4 Table X‐3. Monthly Distribution Pattern (Starting in February Through the Following January) for Annual Allowable Diversions on Each Tributary Stanislaus Tuolumne Merced CalendarMonth (%ofannual) (%ofannual) (%ofannual) 2 1.5% 2.1% 0.2% 3 4.7% 5.1% 3.3% 4 10.9% 11.1% 10.3% 5 15.4% 15.0% 16.1% 6 16.1% 15.4% 19.7% 7 17.4% 18.3% 21.3% 8 9 16.0% 9.3% 15.7% 8.6% 17.4% 8.2% 10 4.1% 4.8% 3.0% 11 2.0% 0.7% 0.2% 12 1.3% 1.0% 0.2% 1 1.3% 2.1% 0.1% Total 100% 100% 100% DRAFT Evaluation of San Joaquin River Flow and Southern Delta Water Quality Objectives and Implementation X‐5 February 2012 ICF 00427.11 State Water Resources Control Board California Environmental Protection Agency DRAFT Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives Table X‐4. Monthly Flood Control Storage Limitations Applied to New Melones, New Don Pedro, and Lake McClure Reservoirs in the WSE Model CalendarMonth NewMelones (TAF) NewDonPedro (TAF) LakeMcClure (TAF) 1 1,970 1,690 674.6 2 1,970 1,690 674.6 3 4 2,030 2,220 1,690 1,718 735 845 5 2,420 2,002 970 6 2,420 2,030 1,024 7 2,300 2,030 1,024 8 2,130 2,030 1,024 9 2,000 1,773 850 10 11 1,970 1,970 1,690 1,690 674.6 674.6 12 1,970 1,690 674.6 BasedonmonthlyinterpretationofUSACEdefinedfloodcurves. Maximumstoragevolume(tospillway)inNewMelones=2,420TAF;NewDonPedro=2,030 TAF;andLakeMcClure=1,024TAF X.3.2 Summary of Results TheWSEmodelgeneratesatimeseriesofestimatedallowablemonthlydiversionsfrom1922 through2003.Forthepurposesofthisanalysisthesemonthlyvaluesareaddedtogetherforagiven yearandpresentedasannualallowablediversionsinTAF.Theresultsarealsopresentedforeach alternativeasanannualdifferenceinTAFandasapercentdifference,bothrelativetobaseline conditions.TheresultsoftheWSEmodelneededforsubsequentagriculturalproductionand economiceffectsanalysisarepresentedbelow.TheWSEresultsarepresentedbothastotalsforthe entirewatershedandfortheindividualtributaries. Entire LSJR Project Area WatersuppliesandrelatedconditionsintheLSJRwatershedarehighlyvariableovertime,and associateddataormodelingresultsaresometimesbettercharacterizedbyexceedanceplotsthanby simpleaverageormedianstatistics.FigureX‐1presentsanexceedanceplotofWSEestimatesfor totalLSJRwatershedannualsurfacewaterdiversionsforeachoftheLSJRflowobjectivesandthe baselineconditionacrossthe82yearsofsimulation. ForaparticularLSJRalternative,thediversionsestimatedforagivenyear,maybeaboveorbelow thatsameyear’sestimateforthebaselinecondition.Thisdifferenceinannualdiversionsaboveor belowthebaselineconditioniscalculatedacrossall82yearsofsimulationforeachLSJRflow alternativeandpresentedonanexceedanceplotinFigureX‐2.Toputinrelativeterms,thesesame annualdifferencesarepresentedinFigureX‐3asapercentdifferenceaboveorbelowthebaseline condition. DRAFT Evaluation of San Joaquin River Flow and Southern Delta Water Quality Objectives and Implementation X‐6 February 2012 ICF 00427.11 State Water Resources Control Board California Environmental Protection Agency DRAFT Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives Project Area Diversions Compared to Baseline 3.0 Annual Diversions (maf) 2.5 2.0 1.5 1.0 Maximum Diversion 20% unimpaired alternative 40% unimpaired alternative 60% unimpaired alternative Baseline 0.5 0.0 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percent of Time Equaled or Exceeded Figure X‐1. Exceedance Plot of WSE Estimates for Total LSJR Watershed Annual Surface Water Diversions for Each of the LSJR Flow Objectives and the Baseline Condition Across the 82 Years of Simulation Annual Diversion Change from Baseline (taf) Project Area Diversions Compared to Baseline 600 400 200 0 -200 -400 -600 -800 20% unimpaired alternative -1000 40% unimpaired alternative -1200 60% unimpaired alternative -1400 0% 10% 20% 30% 40% 50% 60% 70% 80% Percent of Time Equaled or Exceeded 90% 100% Figure X‐2. Exceedance plot of WSE Estimates of the Difference in Total LSJR Watershed Annual Surface Water Diversions for Each of the LSJR Flow Objectives and the Baseline Condition DRAFT Evaluation of San Joaquin River Flow and Southern Delta Water Quality Objectives and Implementation X‐7 February 2012 ICF 00427.11 State Water Resources Control Board California Environmental Protection Agency DRAFT Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives Annual Diversion Change from Baseline (%) Project Area Diversions Compared to Baseline 60% 40% 20% 0% -20% -40% 20% unimpaired alternative 40% unimpaired alternative -60% 60% unimpaired alternative -80% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percent of Time Equaled or Exceeded Figure X‐3. Exceedance Plot of WSE Estimates for Total LSJR Watershed Annual Surface Water Diversions for Each of the LSJR Flow Objectives, as a Percent Difference Above or Below the Baseline Condition, Across the 82 Years of Simulation Tributary Breakdown TableX‐5summarizestheaveragedifferenceinallowablediversionsaboveorbelowthebaseline condition,andtheaveragepercentdifferencefromthebaseline,foreachofthethreetributariesand theentireLSJRwatershedacross82yearsofsimulation.Thisinformationprovidesageneralpicture oftherelativedistributionbetweenthetributariesofthediversionreductionsthatwouldbe needed.Ingeneral,asthepercentofunimpairedflowincreases,theaveragedifferenceindiversions foraparticularalternativerelativetobaselineconditionsincreases(i.e.,greaterdiversion reductionswouldbeneededtoaccommodatetheincreaseinunimpairedflow).Potentialdiversion reductionsontheStanislausRiveraregenerallylessthanthosepotentiallyneededontheTuolumne andMercedRivers.ThisisduetothegenerallyhigherlevelofexistingflowsontheStanislausRiver, asdescribedinChapter2ofAppendixX(drafttechnicalreport). DRAFT Evaluation of San Joaquin River Flow and Southern Delta Water Quality Objectives and Implementation X‐8 February 2012 ICF 00427.11 State Water Resources Control Board California Environmental Protection Agency DRAFT Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives Table X‐5. Average Difference in Diversions Above or Below the Baseline Condition, Along with the Average Percent Difference from the Baseline, for Each of the Three Tributaries and the Entire LSJR Watershed Across 82 Years of Simulation PercentofUnimpairedFlowAlternative 20%Alternative 40%Alternative 60%Alternative 20%Alternative 40%Alternative 60%Alternative Stanislaus (TAF) Tuolumne (TAF) Merced (TAF) LSJR Watershed (TAF) +96 +4 ‐115 ‐5 ‐172 ‐328 ‐10 ‐87 ‐163 +83 ‐255 ‐606 (%) (%) (%) (%) +18% +1% ‐20% 0% ‐19% ‐37% +1% ‐14% ‐29% +5% ‐13% ‐31% FigureX‐4throughFigureX‐6presentsexceedanceplotsofthedifferenceinannualallowable diversionsaboveorbelowthebaselineconditionforeachLSJRflowalternativeacrossall82yearsof simulationontheStanislaus,Tuolumne,andMercedRiversrespectively.Thisprovidesthe distributionandvariabilityofthedifferencesoneachtributary.Positivevaluesindicatediversions foragivenyearcouldbegreaterthanbaselineconditions,andnegativevaluesindicatediversionsin agivenyearwouldneedtobelessthanbaselineconditions.Overallmorediversionreductions wouldbeneededtomeethigherpercentunimpairedflowrequirements.Potentialdiversion reductionsontheStanislausfortheunimpairedflowalternativesaregenerallylessthantheother tworiversduetothegenerallyhigherlevelofexistingflowsontheStanislausRiver. Tofurtherdescribethevariablenatureofrevenuesoverthe82yearsofsimulation,FiguresX‐7 throughX‐9presenttheWSEestimatesofallowableannualdiversionsfromtheStanislaus, Tuolumne,andMercedRiversrespectivelyforthebaselineandtheLSJRflowalternativesastime‐ seriesoverthe82yearsimulation.Thesefiguresdemonstratethevariabilityofdiversionsthat wouldbeexpectedthroughaseriesofdryandwetwateryearsforbaselineconditionsandunder theLSJRflowalternatives.TheyalsoshowthedifferencesthatwouldbeexpectedforthethreeLSJR tributaries. DRAFT Evaluation of San Joaquin River Flow and Southern Delta Water Quality Objectives and Implementation X‐9 February 2012 ICF 00427.11 State Water Resources Control Board California Environmental Protection Agency DRAFT Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives Stanislaus River Diversions Compared to Baseline Annual Change in Diversion (taf) 400 300 200 100 0 -100 -200 20% unimpaired alternative 40% unimpaired alternative -300 60% unimpaired alternative -400 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percent of Time Equaled or Exceeded Figure X‐4. Exceedance Plot of Difference in Annual Allowable Diversions Above or Below the Baseline Condition for Each LSJR Flow Alternative on the Stanislaus River Across 82 Years of Simulation Tuolumne River Diversions Compared to Baseline Annual Change in Diversions (taf) 300 200 100 0 -100 -200 -300 -400 20% unimpaired alternative -500 40% unimpaired alternative -600 60% unimpaired alternative -700 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percent of Time Equaled or Exceeded Figure X‐5. Exceedance Plot of Difference in Annual Allowable Diversions Above or Below the Baseline Condition for Each LSJR Flow Alternative on the Tuolumne River Across 82 Years of Simulation DRAFT Evaluation of San Joaquin River Flow and Southern Delta Water Quality Objectives and Implementation X‐10 February 2012 ICF 00427.11 State Water Resources Control Board California Environmental Protection Agency DRAFT Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives Merced River Diversions Compared to Baseline Annual Change in Diversions (taf) 300 200 100 0 -100 -200 -300 20% unimpaired alternative 40% unimpaired alternative -400 60% unimpaired alternative -500 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percent of Time Equaled or Exceeded Figure X‐6. Exceedance Plot of Difference in Annual Allowable Diversions Above or Below the Baseline Condition for Each LSJR Flow Alternative on the Merced River Across 82 Years of Simulation Annual Diversion Delivery from Stanislaus River Annual Diversion Delivery (TAF/yr) Baseline 20% 40% 60% 800 700 600 500 400 300 200 100 0 1920 1930 1940 1950 1960 Year 1970 1980 1990 2000 Figure X‐7. Estimated Stanislaus River Allowable Annual Diversions from WSE Model for 1922 through 2003 DRAFT Evaluation of San Joaquin River Flow and Southern Delta Water Quality Objectives and Implementation X‐11 February 2012 ICF 00427.11 State Water Resources Control Board California Environmental Protection Agency DRAFT Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives Annual Diversion Delivery from Tuolumne River Baseline 20% 40% 60% Annual Diversion Delivery (TAF/yr) 1200 1000 800 600 400 200 0 1920 1930 1940 1950 1960 1970 1980 1990 2000 Year Figure X‐8. Estimated Tuolumne River Allowable Annual Diversions from WSE Model for 1922 through 2003 Annual Diversion Delivery from Merced River Baseline 20% 40% 60% Annual Diversion Delivery (TAF/yr) 700 600 500 400 300 200 100 0 1920 1930 1940 1950 1960 1970 1980 1990 2000 Year Figure X‐9. Estimated Merced River Allowable Annual Diversions from WSE Model for 1922 through 2003 X.4 Effects on Agricultural Production Changestotheamountofsurfacewaterdiversionshavethepotentialtoeffectwateravailablefor cropirrigationandthushavethepotentialtoaffectagriculturalproductivity.Theestimatesofthe surfacewaterdiversionsdevelopedintheprevioussectionareusedintheSWAPmodeltoestimate agriculturalproductionandrevenuesforeachoftheLSJRflowalternatives.Theagricultural productionandrevenuesarethencomparedtothebaselinecondition.BecausetheWSEmodel simulateschangesinsurfacewaterdiversionsover82yearsofhydrology,theresultsarehighly variableacrossarangeofpossibleannualeffects. X.4.1 SWAP Model Overview TheSWAPmodelwasselectedtoestimatetheagriculturalproduction(cropacreages)andrevenues (totalproductionvalue)associatedwiththesurfacewaterdiversionspotentiallyneededunderthe LSJRflowalternativesandbaselineconditions.SWAPisanagriculturalproductionmodelthat DRAFT Evaluation of San Joaquin River Flow and Southern Delta Water Quality Objectives and Implementation X‐12 February 2012 ICF 00427.11 State Water Resources Control Board California Environmental Protection Agency DRAFT Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives simulatesthedecisionsoffarmersataregionallevelbasedonprinciplesofeconomicoptimization. Themodelassumesthatfarmersmaximizeprofit(revenueminuscosts)subjecttoresource, technical,andmarketconstraints.Themodelselectsthosecrops,watersupplies,andirrigation technologythatmaximizeprofitsubjecttotheseequationsandconstraints.Themodelaccountsfor landandwateravailabilityconstraintsgivenasetoffactorsforproductionprices,andcalibrates exactlytoobservedyearlyvaluesofland,labor,waterandsuppliesuseforeachregion. Justification and Previous Applications ThebasisforSWAPisPositiveMathematicalProgramming(PMP),whichisaself‐calibrating agriculturalproductionmodelaimedtomaximizefarmprofitsandemployingacalibrationmethod thatensuresthatcropproductionmatchestheobservedbasedatainagivenyear(Howitt1995). PMPintroducesanon‐linearcostfunctionderivedfromthefirstorderconditionsofLeontief productionconstrainedmodel.AdditionaldetailsonthePMPmethodologyarepresentedinseveral reportsandpeerreviewedpublicationsincluding:Howittetal.(2010),Medellín‐Azuaraetal. (2010),andMedellín‐Azuaraetal.(2012). PMPhasbecomeawidelyacceptedmethodforanalyzingwaterdemandandundertakingpolicy analysisandaredeemedasthedominantmethodwithrespecttoinductive(statistical)based modelstorepresentagriculturalproduction(Young2005;Scheierlingetal.2006).Thistypeof modelworkswellwiththemultitudeofresource,policy,andenvironmentalconstraintsoften observedinpractice(Griffin2006).Furthermore,PMPdoesnotrequirelargedatasets,isdirectly basedonprofit‐maximizingbehavioroffarmers,andisbettersuitedtoestimatepolicyresponseof farmingactivitiesthanstrictlystatisticalmethods(Howittetal.2010).Incontrasttostatistical methods,SWAPmoreexplicitlyaccountsforchangesinwateravailabilityduetoreduceddiversions aspartoftheconstraintsetinthemodel.Bycomparingabasecasewithcurrentdiversionsanda policyscenariowithreduceddiversions,theanalystisabletoeconomicallyquantifychangesin revenue,croppingpatternsandappliedwaterperunitarea. SWAPalsohassomecomparativeadvantagesovercurrentandpreviouslyusedagriculturalwater usemodels.TwosuchmodelsareDWRCaliforniaAgriculture(CALAG)andDWRNetCropRevenue Models(NCRMs).Thefollowingisabriefdescriptionofthosemodelsandthecomparative advantagesofSWAP. CALAGisanextendedandimprovedversionofCVPM.LikeSWAPthenumericalbasisofCALAG isPMP(CaliforniaDepartmentofWaterResources2008).CALAG,however,doesnotexplicitly includecostsofproductionsfactorsintheirformulation,andinsteaduseconstantvariable productioncostsbycropandregion.SWAPincontrast,cancapturefarmeradjustmentsininput usesuchaswaterperacrechangesduringdroughtconditions.ThusCVPMandCALAGarewell suitedtorepresentwatersupplyoperationsbutarelessusefulformodelingdetailedchangesin productionsuchaswaterperunitarea,laborperunitareaorsuppliesperunitarea.SWAP estimatescroppingpatternsandinputuseforallpoliciesevaluated,capturingadaptationof cropfarmingproductiontochangingwateravailabilityconditions.Whenfacedwithincreasing waterscarcity,farmershavebeenshowntoadjustinthreeways,changesinwaterperacre, changesincropmix,andchangesintotalirrigatedacres.CVPMandCALAGarerobustmodels thatcanaccountfortwoofthesechanges,butSWAPhasbeenextendedtoincorporateallthree adjustments.SWAPincorporatesinformationfrombothmodels,intermsofwatersupply sourcesandusesregionscompatiblewithbothmodels.SWAPhasadditionalmodulestoaccount fortechnologicalimprovement,climatechange,changesincroppricesandwaterquality. DRAFT Evaluation of San Joaquin River Flow and Southern Delta Water Quality Objectives and Implementation X‐13 February 2012 ICF 00427.11 State Water Resources Control Board California Environmental Protection Agency DRAFT Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives TheNCRMsarespreadsheetprogramsthatestimateaveragenetcroprevenuesfor26crop groupsin27Californiacountiesandregions.Thesemodelscombinedataonacres,andaverage yieldsandpricesfromnumerouscountyandstatesources.Thespreadsheetsprice‐leveladjust costandgrossrevenuedatatoacommonyear,adjustforchangesinvariouscosts,andthen calculateweighted‐averageestimatesofatypicalgrower'sannualnetcroprevenue,whether profitorloss(CaliforniaDepartmentofWaterResources2008).Howeverusingfixedbudgets,it isnotpossibletomodelreactionstochangesinwateravailabilitybasedonfarmersprofit‐ maximizingbehaviorascanbedoneinSWAP.Instead,theNCRMspreadsheetsprovidea snapshotofagriculturebutdonotcapturechangesincroppingpatternsorproductioninputuse asaresultofchangingwateravailability. TheSWAPmodelhasbeenusedinawiderangeofpolicyanalysisprojects.Thefirstformal applicationofthismodelwastoestimatetheeconomicscarcitycostsofwaterforagricultureinthe statewidehydro‐economicoptimizationmodelforwatermanagementinCaliforniaknownasthe CaliforniaValueIntegratedNetwork(CALVIN)model.SWAPprovideseconomicvalueofwater shortagetoCALVINbymonthandregionthatisweightedagainstvalueofshortageinotherusesin decidingwaterallocation.(Draperetal.2003).Also,DWRusedSWAPsubsequenttotheCALAG modeltoaidindevelopmentofplanningscenariosandstudiessupportingpreparationofthe2009 WaterPlanUpdate(http://www.waterplan.water.ca.gov/cwpu2009/index.cfm#volume4). SWAPhasalsobeenusedbytheStockholmEnvironmentInstituteasasubsidiarymodelforaWater EvaluationandPlanning(WEAP)modelapplicationintheCaliforniaCentralValley,withother participantssuchastheU.S.BureauofReclamationandconsultingfirmsincludingCH2MHILL. WEAPisaclimate‐driven,waterresourcemodelthatsystematicallysimulatesnaturalwaterflows andmanagementofinfrastructuretobalancesupplyanddemand.SWAPtakesadvantageofthe WEAPpriority‐basedallocationandprovidescroppingpatternsforawiderangeofwater availabilityconditions.Indoingthis,SWAPturnsawaterallocationsimulationmodelintoahydro‐ economicmodelthatallocateswaterbasedoneconomicvalueofthefinaluse(Yatesetal.2005). Morerecently,SWAPapplicationshavebeengreatlyexpandedtoincludesalinityinsoilandshallow groundwaterintheSacramento‐SanJoaquinDeltainCalifornia(Lundetal.2007)andsouthofthe Delta(Howittetal.2009a;Tanakaetal.2008),climatechange(Howittetal.2009c;Medellin‐Azuara, etal.2007),anddroughtimpactanalysis(Howittetal.2009b). X.4.2 Model Inputs and Approach SWAPwasconfiguredtomodelagriculturalproductioninthemainagriculturalareasoftheLSJR watershedandcalibratedtoDWRlanduseandappliedwaterdatafor2005.Usingoutputfromthe WSEmodel,theSWAPmodelestimatestheagriculturalproduction(cropacreages)andrevenues (totalproductionvalue)resultingfromeachoftheLSJRflowalternativesandthebaseline.The annualresultsforeachLSJRflowalternativearethencomparedtothoseforthebaselinecondition tocalculatetheneteffectofthealternatives. SWAP Regions SWAPdisaggregatestheCentralValleyusingtheCentralValleyProductionModel(CVPM)regionsas describedintheCentralValleyProjectImprovementActProgrammaticEnvironmentalImpact Statement(UnitedStatesBureauofReclamation1997).ForanalysisofLSJRflowalternatives,CVPM DRAFT Evaluation of San Joaquin River Flow and Southern Delta Water Quality Objectives and Implementation X‐14 February 2012 ICF 00427.11 State Water Resources Control Board California Environmental Protection Agency DRAFT Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives regions11,12,and13wereusedinSWAPasshowninFigureX‐10.Thesecorrespondwelltothe mainagriculturalareasoftheLSJRwatershed. Forcomparison,FigureX‐11showstheboundariesofCVPMregions11,12,and13,alongwith majorirrigationdistrictandLSJRtributaryboundaries.Whiletheirrigationdistrictboundaries generallycorrespondwiththeCVPMregions,thesedistrictsobtainsurfacewaterdiversions,and provideservicetoagriculturalareasinmorethanonewatershed.Therefore,thesurfacewater diversionreductionsforeachtributarywatershed,asestimatedbytheWSEmodel,cannotbeused directlyasinputtotheindividualCVPMregionsofSWAP.ThethreeCVPMregionsasawhole, however,adequatelyencompassestheLSJRwatershed,andthus,thesurfacewaterdiversion reductionsforallthreetributariesfromtheWSEmodelareappliedequallyacrosstheCVMPregions inSWAP.ThiseffectivelyprovidesanaverageresultfromSWAPacrosstheentireLSJRwatershed, butnotfortheindividualwatershedsorCVPMregions. Figure X‐10. CVPM Regions Used in SWAP and Those Used in the Project Area (CVPM regions 11, 12, 13) DRAFT Evaluation of San Joaquin River Flow and Southern Delta Water Quality Objectives and Implementation X‐15 February 2012 ICF 00427.11 State Water Resources Control Board California Environmental Protection Agency Figure X‐11. Major Water District Boundaries Within the Project Area (CVPM regions 11, 12, 13) DRAFT Evaluation of San Joaquin River Flow and Southern Delta Water Quality Objectives X‐16 2012 ICF 00427.11 State Water Resources Control Board California Environmental Protection Agency SWAP Calibration SWAPiscalibratedtoDWRestimatesoflanduseandappliedwaterdataforwateryear2005.This representsthemostrecentnormalwateryearintermsofbothwateravailabilityandcropprices. Theseestimateswerealsousedforpreparationofthe2009CaliforniaStateWaterPlan.Todevelop theseestimates,DWRsurveyslandandwateruseswithineachcountyperiodicallydependingon changesthathaveoccurredwithinthatcounty.Surveysbeganin1947withthefirstdigitizedsurvey completedin1988,andareavailablefromtheDWRwebsite.TableX‐6belowliststhecounties withintheprojectareaandwhenthelatestlandusesurveywastaken.DWRusestheAgriculture Commissionerannualreportstothenupdatecropyieldsappropriateforwateryear2005. Table X‐6. Counties Within Project Area and Date Last Surveyed by DWR County YearLastLand Surveyed DateLastEstimatedbyDWRfromCommissioner Reports Calaveras Madera Mariposa SanJoaquin Stanislaus Tuolumne Merced 2000 2001 1998 1996 2004 1997 2002 2005 2005 2005 2005 2005 2005 2005 TheDWRlandusesurveyscontainabreakdownbyirrigatedandnon‐irrigatedlandsandcrop groups.ThecropgroupsinSWAPfollowtheDWRclassificationsandinclude:almondsand pistachios,alfalfa,corn,cotton,cucurbits,drybeans,freshtomato,processingtomato,grains,onion andgarlic,pasture,potato,rice,safflower,citrusandsubtropical,andvineyards,aswellasother orchards,fieldcrops,andtruckcrops.TableX‐7summarizesacrosstheprojectarea(CVPMregions 11,12,and13)thetotal2005acreagesforthesecropgroups,alongwiththeassociatedwateruse andproductionvaluesperacre. DRAFT Evaluation of San Joaquin River Flow and Southern Delta Water Quality Objectives X‐17 State Water Resources Control Board California Environmental Protection Agency DRAFT Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives Table X‐7. Irrigated Crop Area, Water Use Intensity, and Crop Type by Crop Groups Used in SWAP CropGroup Alfalfa 2005DWRIrrigated CropArea(Acres) WaterUse(Acre‐ feet/Acre) Value ($/Acre) CropType 97,704 4.05 $ 918 Perennial Almond/Pistachio 296,773 3.32 $ 3,871 Perennial Corn 148,872 2.48 $ 673 Annual 31,577 3.08 $ 906 Annual Cucurbits 2,709 1.66 $ 3,802 Annual DryBean 1,937 2.15 $ 994 Annual 92,576 2.41 $ 332 Annual 6,778 1.5 $ 5,811 Annual 21,446 0.74 $ 285 Annual 819 2.01 $ 4,348 Annual 66,200 3.39 $ 2,718 Perennial 112,218 4.43 $ 631 Annual 6,370 5.37 $ 754 Annual 446 1.58 $ 472 Annual Subtropical 5,859 2.52 $ 6,639 Perennial Sugarbeet 2,495 1.25 $ 1,275 Annual Tomato‐Processing 12,428 2.38 $ 2,018 Annual TruckCrops 30,435 0.96 $ 5,192 Annual 112,602 2.25 $ 4,066 Perennial Cotton Field FreshTomato Grain OnionandGarlic Orchards Pasture Rice Safflower Vine SWAP Simulation of Alternatives and Baseline Condition TheseannualsurfacewaterdiversionchangesestimatedbytheWSEmodel(describedinSection X.3)wereinputtoSWAPtoestimatetheassociatedagriculturalproduction(cropacreages)and revenues(totalproductionvalue).ForeachwateryearSWAPusesthePMPmethodologyto calculatethecropacreagemixthatwouldmaximizerevenuefromtheannualavailablesurface waterdiversions. Forthepurposeofthisanalysisitwasassumedthatirrigationsuppliedfromgroundwaterandother sources(e.g.,CVPprojectdeliveries,etc.)wouldnotbeincreasedtomakeupforanydecreasein surfacewaterdiversions.Whilesomeadditionalalternativesupplymightactuallybeavailablefrom othersources,forthepurposeofeconomicanalysis,thisisaconservativeassumption. TheSWAPoutputforaparticularLSJRflowalternativeorthebaselineconditionisatime‐seriesof 82annualestimatesoftheassociatedcropacreages,appliedwater,andrevenueacrosstheperiodof simulation.ForthepurposeofevaluatingeachLSJRflowalternative,theseestimatesforagivenyear arecomparedagainstthoseforthebaselinecondition.Theresultisatimeseriesacrossall82years ofsimulationofannualdifferencesincropacreagesandrevenueassociatedwithLSJRalternative whencomparedtothebaselinecondition. DRAFT Evaluation of San Joaquin River Flow and Southern Delta Water Quality Objectives and Implementation X‐18 February 2012 ICF 00427.11 State Water Resources Control Board California Environmental Protection Agency X.4.3 DRAFT Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives Summary of Results ThissectionpresentsSWAPmodeloutputcharacterizingthetotalagriculturalproduction(crop acreages)anddirectly‐relatedrevenues(totalproductionvalue)associatedwiththethreeLSJRflow alternativesandthebaselinecondition.Alsopresentedarethedifferencesinthesevaluesbetween thethreeLSJRalternativesandthebaselinecondition.Asdescribedearlier,SWAPprovidesan averageresultacrosstheLSJRwatershed. Effects on Crop Acreage TableX‐8presentstheaverageoverthe82‐yearstudyperiodoftheannualirrigatedacreageofeach croptypeforthebaselineconditionandtheaveragedifference,inbothacresandpercent,between LSJRflowalternativesandthebaselinecondition.Aswaterbecomeslessavailable,thecropsmost affectedarerice,pasture,andfieldcrops,followedbycorn.Theseareaffectedmorebecausethey arerelativelyhighwater‐useannualcropswithlowervaluecropsperacre.Thelowvaluecrop groupsthatcoverlargeareasaresubstantiallyreducedastheLSJRflowalternativeincreasesfrom 20%to60%ofunimpairedflow.FiguresX‐12throughX‐15presenttheannualcropacreagefor eachcropgroupasatimeseriesfrom1960to2003forthebaselineconditionandthe20%,40% and60%LSJRflowalternativesrespectively.,Insomeyearsofextremedrought,pastureandfield cropsarenearlyeliminatedfromproductionparticularlyunderthe40%and60%alternatives. FigureX‐16presentstheannualcropacreageforselectedcrops(cotton,grain,processtomatoes, sub‐tropicalfruit,riceanddrybeans)asatimeseriesfrom1960to2003foreachoftheLSJRflow alternatives.Thisdemonstratesthathighervaluecrops,suchastomatoesarelessaffectedby increaseddiversionreductionsthanlowervalue,highwater‐usecrops,suchasrice,andthatthe effectsaregenerallygreaterduringthehigherpercentagealternatives.FigureX‐17presentsthe annualcropacreageforsomelow‐acreagecrops(freshtomatoes,cucurbits,sugarbeets, onions/garlic,andsafflower)asatimeseriesfrom1960to2003foreachoftheLSJRflow alternatives.Generally,thesecropsarenotasaffectedbydiversionreductions.Perennialcropssuch asvines,almondsandpistachios,andsub‐tropicalcropgroupsexperiencedecreasesinproduction onlyinprolongedextremedroughtsuchasexperiencedintheearly1990s.Thisisshownbya constantacreagefromyeartoyearevenastheflowobjectivealternativeisincreased. DRAFT Evaluation of San Joaquin River Flow and Southern Delta Water Quality Objectives and Implementation X‐19 February 2012 ICF 00427.11 State Water Resources Control Board California Environmental Protection Agency DRAFT Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives Table X‐8. Average Annual Acreage of Irrigated Crops for Baseline Condition and Average Difference (in Acres and Percent) Between LSJR Flow Alternatives and Baseline Condition by Crop Group CropGroup Alfalfa Baseline 20%Alternative (TAF) +/‐TAF 40%Alternative %Change +/‐TAF 60%Alternative %Change +/‐TAF %Change 94,180 +569 +1% ‐3,439 ‐4% ‐10,283 ‐11% 295,630 +157 <+1% ‐670 <‐1% ‐2,651 ‐1% 137,020 +945 +1% ‐14,517 ‐11% ‐38,576 ‐28% 30,660 +180 +1% ‐468 ‐2% ‐1,213 ‐4% Cucurbits 2,700 +2 <+1% ‐7 <‐1% ‐23 ‐1% DryBean Field 1,890 57,510 +6 +5,290 <+1% +9% ‐42 ‐23,004 ‐2% ‐40% ‐239 ‐42,752 ‐13% ‐74% 6,770 +2 <+1% ‐4 <‐1% ‐10 <‐1% 21,220 +75 <+1% ‐318 ‐1% ‐1,092 ‐5% 820 +1 <+1% ‐1 <‐1% ‐4 ‐1% Orchards 65,420 +111 <+1% ‐542 ‐1% ‐4,422 ‐7% Pasture Rice 76,570 4,520 +2,603 +54 +3% +1% ‐27,400 ‐1,595 ‐36% ‐35% ‐56,386 ‐3,442 ‐74% ‐76% 430 +3 +1% ‐14 ‐3% ‐46 ‐11% Subtropical 5,850 +2 <+1% ‐3 <‐1% ‐8 <‐1% Sugarbeet 2,480 +3 <+1% ‐7 <‐1% ‐15 ‐1% Almonds/Pistachio s Corn Cotton FreshTomato Grain OnionandGarlic Safflower Tomato (Processing) TruckCrops Vine 12,330 +20 <+1% ‐57 <‐1% ‐238 ‐2% 30,410 112,390 +4 +42 <+1% <+1% ‐16 ‐107 <‐1% <‐1% ‐55 ‐289 <‐1% <‐1% TOTAL 958,800 +1% ‐72,211 ‐8% ‐161,744 ‐17% +10,069 DRAFT Evaluation of San Joaquin River Flow and Southern Delta Water Quality Objectives and Implementation X‐20 February 2012 ICF 00427.11 State Water Resources Control Board California Environmental Protection Agency DRAFT Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives Area of Irrigated Crops : Baseline 160000 140000 Corn Vines Area of Irrigated Crops per year (acres) 120000 Alfalfa Pasture Other Field Crops 100000 Deciduous Other Truck Crops Cotton 80000 Cucurbits Dry Beans Fresh Tomatoes 60000 Grain Onions/Garlic 40000 Rice Safflower Subtropical 20000 Sugar Beet Process Tomatoe 2002 2003 2000 2001 1998 1999 1997 1995 1996 1993 1994 1991 1992 1989 1990 1987 1988 1985 1986 1984 1982 1983 1980 1981 1978 1979 1976 1977 1974 1975 1973 1971 1972 1969 1970 1967 1968 1965 1966 1963 1964 1962 1960 1961 0 Year Figure X‐12. Annual Crop Acreage by Crop Group Under Baseline Conditions from 1960 to 2003 Area of Irrigated Crops : 20% Unimpaired Flow Objective 160000 140000 Corn Vines Area of Irrigated Crops per year (acres) 120000 Alfalfa Pasture Other Field Crops 100000 Deciduous Other Truck Crops Cotton 80000 Cucurbits Dry Beans Fresh Tomatoes 60000 Grain Onions/Garlic 40000 Rice Safflower Subtropical 20000 Sugar Beet Process Tomatoe 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 0 Year Figure X‐13. Annual Crop Acreage by Crop Group Under 20% Unimpaired Flow Alternative from 1960 to 2003 DRAFT Evaluation of San Joaquin River Flow and Southern Delta Water Quality Objectives and Implementation X‐21 February 2012 ICF 00427.11 State Water Resources Control Board California Environmental Protection Agency DRAFT Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives Area of Irrigated Crops : 40% Unimpaired Flow Objective 160000 140000 Corn Vines Area of Irrigated Crops per year (acres) 120000 Alfalfa Pasture Other Field Crops 100000 Deciduous Other Truck Crops Cotton 80000 Cucurbits Dry Beans Fresh Tomatoes 60000 Grain Onions/Garlic 40000 Rice Safflower Subtropical 20000 Sugar Beet Process Tomatoe 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 0 Year Figure X‐14. Annual Crop Acreage by Crop Group Under 40% Unimpaired Flow Alternative from 1960 to 2003 Area of Irrigated Crops : 60% Unimpaired Flow Objective 160000 140000 Corn Vines Area of Irrigated Crops per year (acres) 120000 Alfalfa Pasture Other Field Crops 100000 Deciduous Other Truck Crops Cotton 80000 Cucurbits Dry Beans Fresh Tomatoes 60000 Grain Onions/Garlic 40000 Rice Safflower Subtropical 20000 Sugar Beet Process Tomatoe 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 0 Year Figure X‐15. Annual Crop Acreage by Crop Group Under 60% Unimpaired Flow Alternative from 1960 to 2003 DRAFT Evaluation of San Joaquin River Flow and Southern Delta Water Quality Objectives and Implementation X‐22 February 2012 ICF 00427.11 State Water Resources Control Board California Environmental Protection Agency DRAFT Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives Acreage of Selected Crops : 20, 40, and 60 Percent of Unimpaired Flow 35000 20% Cotton 30000 Area of Irrigated Crops per year (acres) 40% 60% 25000 20% Grain 20000 40% 60% 15000 Process Tomatoes 10000 Sub‐Tropical 5000 Rice 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Dry Beans 0 Year Figure X‐16. Annual Crop Acreage by Crop Group Under 20%, 40%, and 60% Unimpaired Flow Alternatives from 1960 to 2003 for Selected Crops Acreage of Small Acreage Crops : 20, 40, and 60 Percent of Unimpaired Flow 8000 Fresh Tomatoes 7000 Area of Irrigated Crops per year (acres) 6000 5000 4000 Cucurbits 3000 2000 Sugar Beets Onions/Garlic 1000 Safflower Year 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984 1983 1982 1981 1980 1979 1978 1977 1976 1975 1974 1973 1972 1971 1970 1969 1968 1967 1966 1965 1964 1963 1962 1961 1960 0 Figure X‐17. Annual Crop Acreage by Crop Group Under 20%, 40%, and 60% Unimpaired Flow Alternatives from 1960 to 2003 for Selected Higher‐Value Crops with Low Total Acreage DRAFT Evaluation of San Joaquin River Flow and Southern Delta Water Quality Objectives and Implementation X‐23 February 2012 ICF 00427.11 State Water Resources Control Board California Environmental Protection Agency DRAFT Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives Effects on Agricultural Revenue SWAPestimatesthetotaldirectgrosscroprevenuesgeneratedacrossCVPMregions11,12,and13 forthethreeLSJRflowalternativesandthebaselinecondition.Thesearethedirectrevenues generatedbyfarmingoperations(i.e.,grosstotalproductionvalue).Itdoesnotincludethe associatedindirectorinducedeffectontheregionaleconomy,whichwillbeaddressedinthenext section.SWAPiscalibratedandoutputisreportedin2005dollars,butissubsequentlyadjusted usingEngineeringNewsRecordconstructioncostindicesandreportedbelowin2008dollarsto correspondwiththesubsequentregionaleconomicanalysis. WatersuppliesandrelatedconditionsintheLSJRwatershedarehighlyvariableovertime,and associateddataormodelingresultsaresometimebettercharacterizedbyexceedanceplotsthanby simpleaverageormedianstatistics.Tocharacterizethemagnitudeandvariabilityofrevenues, FigureX‐18presentsanexceedanceplotofSWAPestimatesfortotalLSJRwatershedannual agriculturalrevenuesacrossthe82yearsofsimulationforeachoftheLSJRflowobjectivesandthe baselinecondition. Revenuesestimatedforaparticularyear,foraparticularLSJRalternative,maybeaboveorbelow thatsameyear’sestimateforthebaselinecondition.Tounderstandthisdifference,it’simportantto notcomparetheexceedanceplotsinFigureX‐18,butratheruseaplotoftheannualdifferences.The differenceinannualrevenueaboveorbelowthebaselineconditioniscalculatedacrossall82years ofsimulationforeachLSJRflowalternativeandpresentedonanexceedanceplotinFigureX‐19. Under60%unimpairedflowrequirementsthemodelsestimatesadecreaseinagricultural productivityinallyears,whileat20%itestimatesmanyyearswithanincrease.Toputinrelative terms,thesesameannualdifferencesarepresentedinFigureX‐20asapercentdifferenceaboveor belowthebaselinecondition. Project Area Direct Revenue Compared to Baseline Baseline 20% Alternative 40% Alternative 60% Alternative Agriculture Direct Revenue ($ Billion) $2.9 $2.8 $2.7 $2.6 $2.5 $2.4 $2.3 0% 10% 20% 30% 40% 50% 60% Percent of Time Equaled or Exceeded 70% 80% 90% 100% Figure X‐18. Exceedance Plot of SWAP Estimates for Total LSJR Watershed Annual Agricultural Revenues for Each of the LSJR Flow Objectives and the Baseline Condition Across the 82 Years of Simulation DRAFT Evaluation of San Joaquin River Flow and Southern Delta Water Quality Objectives and Implementation X‐24 February 2012 ICF 00427.11 State Water Resources Control Board California Environmental Protection Agency DRAFT Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives Project Area Direct Effects Compared to Baseline Change in Agriculture Direct Revenue ($ Million) 20% Alternative 40% Alternative 60% Alternative $100 $50 $0 -$50 -$100 -$150 -$200 -$250 -$300 -$350 -$400 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percent of Time Equaled or Exceeded Figure X‐19. Exceedance Plot of the Difference in SWAP Estimates of Total LSJR Watershed Annual Agricultural Revenues Between the Three LSJR flow Objectives and the Baseline Condition Across the 82 Years of Simulation Project Area Direct Effects Compared to Baseline Change in Agriculture Direct Revenue (%) 20% Alternative 40% Alternative 60% Alternative 4% 2% 0% -2% -4% -6% -8% -10% -12% -14% 0% 10% 20% 30% 40% 50% 60% Percent of Time Equaled or Exceeded 70% 80% 90% 100% Figure X‐20. Exceedance Plot of the Percent Difference in SWAP Estimates of Total LSJR Watershed Annual Agricultural Revenues between the Three LSJR Flow Objectives and the Baseline Condition Across the 82 Years of Simulation DRAFT Evaluation of San Joaquin River Flow and Southern Delta Water Quality Objectives and Implementation X‐25 February 2012 ICF 00427.11 State Water Resources Control Board California Environmental Protection Agency DRAFT Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives Tofurtherdescribethevariablenatureofrevenuesoverthe82yearsofsimulation,FigureX‐21 presentsthetotalannualdirectrevenueasatime‐seriesforyears1922through2003forthe baselineandthreeLSJRalternatives.Tounderstandtherelativemagnitudeoftheeffectonrevenues associatedwiththealternatives,FigureX‐22presentsthepercentdifferenceintotalannualdirect revenuebetweenthethreeLSJRalternativesandthebaselineconditionasatime‐seriesforyears 1922through2003. Asdiversionreductionsincrease(i.e.,assurfacewaterdiversionsbecomelessavailable)theeffect onagriculturalrevenuesrelatedtoanadditionalincreaseindiversionreductionsbeginstoclimb faster.Todemonstratethis,FigureX‐23displaysthemarginalrevenuelossperacre‐footof diversionreductionforLSJRflowalternativesrangingfrom25%to60%ofunimpairedflow. Agriculture Sector Direct Revenue Compared to Baseline Baseline Direct Revenue 20% Alternative Direct Revenue 40% Alternative Direct Revenue 60% Alternative Direct Revenue Annual Direct Revenue ($Billion) $2.9 $2.8 $2.7 $2.6 $2.5 $2.4 $2.3 1920 1930 1940 1950 1960 Year 1970 1980 1990 2000 Figure X‐21. Total Annual Direct Revenue ($Billion) for Years 1922 through 2003 for the Baseline and Three LSJR Alternatives DRAFT Evaluation of San Joaquin River Flow and Southern Delta Water Quality Objectives and Implementation X‐26 February 2012 ICF 00427.11 State Water Resources Control Board California Environmental Protection Agency DRAFT Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives Agriculture Sector Direct Revenue Compared to Baseline 20% Alternative Direct Revenue 40% Alternative DirectRevenue 60% Alternative Direct Revenue Change in Direct Revenue (% of Baseline) 5% 0% -5% -10% -15% 1920 1930 1940 1950 1960 Year 1970 1980 1990 2000 Figure X‐22. Percent Difference in Total Annual Direct Revenue Between the Three LSJR Alternatives and the Baseline Condition for Years 1922 through 2003 Marginal Revenue Loss ‐100 Revenue Losses ($2008/acre‐ft) ‐120 ‐140 25% UF 35% UF ‐160 45% UF 30% UF 50% UF 40% UF ‐180 55% UF ‐200 ‐220 ‐240 60% UF ‐260 ‐280 UF = Unimpaired Flow ‐300 500 600 700 800 900 1,000 1,100 1,200 Average Annual Diversion Reduction from Three East Side Tributaries (taf) Figure X‐23. Marginal Revenue Loss Per Acre‐Foot of Additional Diversion Reduction for LSJR flow Alternatives Ranging from 25% to 60% of Unimpaired Flow DRAFT Evaluation of San Joaquin River Flow and Southern Delta Water Quality Objectives and Implementation X‐27 February 2012 ICF 00427.11 State Water Resources Control Board California Environmental Protection Agency X.5 DRAFT Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives Effects on Regional Economy Theanalysisinthissectionprovidesestimatesofthetotalregionaleconomicactivityassociated withagriculturalproductionintheLSJRwatershedforeachoftheLSJRflowalternativesand comparestheseestimatestobaselineconditions.ThisanalysisusestheIMPLANeconomicmodelto estimatetheindirectandinducedeconomicactivityassociatedwiththedirectagricultural‐related revenuefromtheSWAPmodel(asdiscussedandpresentedintheprevioussection).Ingeneral, changesinagriculturalproductionandrelatedjobswouldalsoaffectbusinessesservingfarming operationsandfarmworkers.TheIMPLANmodelappliesjobandincomemultiplierstocalculatethe effectstootherconnectedsectorsoftheregionaleconomy.Thedirectagricultural‐relatedrevenue effectsfromtheSWAPmodelandtheindirectandinducedeconomiceffectsfromtheIMPLANmodel togetherprovideanestimateofthetotaleconomicsectoroutputandjobseffectsfortheregion. X.5.1 IMPLAN Model and Approach Reductionsinwaterdeliveriestoagriculturaluserswouldaffectseveralsectorsoftheeconomy,not justagriculture.Whenfarmproductionfallsasaresultofreducedwateravailability,farmerswould hirefewerseasonalworkersandmaylayoffsomeyear‐roundworkers.Withoutjobs,household spendingbytheseworkersislikelytofall,affectingretailersandotherbusinessesinthearea.In addition,farmerswouldreducepurchasesofequipment,materials,andservicesfromlocal businesses,reducingjobsandincomewiththesesuppliers.Thetotalregionaleconomiceffectisthe sumofthedirecteffectstoagricultureandtheseassociatedindirectandinducedeffects. ToestimatetheregionaleconomiceffectstheLSJRflowalternatives,the2009ImpactAnalysisfor Planningmodel(IMPLAN)Version3.0(2009)wasused.IMPLANhasbeenusedformanyyearsby state,federal,andmunicipalentitiesthroughoutthecountrytocalculateeconomiceffects.This includestheCaliforniaDepartmentofWaterResources,theStateWaterBoard,theU.S.ArmyCorps ofEngineers,U.S.BureauofReclamation,theBureauofEconomicAnalysis,andtheBureauofLand Management.IMPLANwasusedpreviouslybytheStateWaterBoardtodeterminethepotential regionaleffectsofreducedfarmproductionintheSanJoaquinValleyintheEIRforthe Implementationofthe1995Bay/DeltaWaterQualityControlPlan(StateWaterResourcesControl Board1999).ThisprevioususewassimilartothecurrentuseofIMPLANtodeterminetheregional economiceffectsoftheLSJRflowobjectivesalternatives. IMPLANisaninput‐outputmultipliermodelandconsidersinterrelationshipsamongsectorsand institutionsintheregionaleconomy.Productioninthedifferenteconomicsectorsissimulatedin IMPLANbyusingfixedfactors,whichaccountfordynamicssuchasproductionperunitofinput, valueadded,andemployment.Itthenappliesthesefactorsinasocialaccountingmatrix,which accountsforchangesintransactionsbetweenproducersandintermediateandfinalconsumersin othersectorsoftheeconomy.TheIMPLANapproachalsoconsidersnon‐markettransactionssuch unemploymentinsurancepaymentsandassociatedchangesintaxrevenuesforgovernment. TheIMPLANmodelusesregion‐specificmultiplierstoestimatetheindirectandinducedeconomic effects(positiveornegative)ofchangesinonesectoronallotherconnectedsectorsintheregional economy.Forthisanalysis,thetendefaultIMPLANcropgroupswereaggregatedintosector111 (cropproduction)oftheNorthAmericanIndustryClassificationSystem(NAICS)Thusdirect revenueeffect,anoutputfromtheSWAPmodel(describedinSectionX.4above),wereappliedto DRAFT Evaluation of San Joaquin River Flow and Southern Delta Water Quality Objectives and Implementation X‐28 February 2012 ICF 00427.11 State Water Resources Control Board California Environmental Protection Agency DRAFT Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives sector111asawhole.Theindirectandinducedeffectsarethencalculatedbyapplyingthese multipliersforeachsectoraffectedbychangestosector111.Becausemultipliersareappliedtothe directrevenuesfromtheSWAPmodel,itwaspossibletolimitthemodeledareaintheregional effectsmodelingtotheareamodeledbySWAPandasshownpreviouslyinFigureX‐10.Themajority oftheareamodeledinIMPLANiscontainedwithinthecountiesofMadera,Merced,andStanislaus andisagoodrepresentationoftheagriculturalareaintheLSJRwatershed. TheIMPLANmodelthenusesabuilt‐insetofregionalmultiplierstodevelopthedirect,indirectand inducedeffectsonemploymentandsectoroutput.Asmentionedearlier,changesinagricultural revenuescorrespondtodirectimpactsonsectoroutput.Thebuilt‐inratiosofjobsperunitofsector outputarethenusedtocalculatedirectimpactsofagriculturalrevenuelossesinregional employment.Thusthedirecteffecttoemploymentisthedirectrevenueeffectmultipliedbythe agriculturesectoremploymentmultiplier.Theadditionalindirectandinducedemploymenteffectis theindirectandinducedeconomiceffectmultipliedbytheagriculturesectoremployment multiplier. Input‐outputanalysisapproachemployedbyIMPLANusuallyoverestimatesindirectjobandincome losses.Oneofthefundamentalassumptionsininput‐outputanalysisisthattradingpatterns betweenindustriesarefixed.Thisassumptionimpliesthatsuppliersalwayscutproductionandlay offworkersinproportiontotheamountofproductsuppliedtofarmsorotherindustriesreducing production.Inreality,businessesarealwaysadaptingtochangingconditions.Whenafarmcuts backproduction,somesupplierswouldbeabletomakeuppartoftheirlossesinbusinessbyfinding newmarketsinotherareas.Growthinotherpartsofthelocaleconomyisexpectedtoprovide opportunitiesforthesefirms.Fortheseandotherreasons,jobandincomelossesestimatedusing input‐outputanalysisshouldoftenbetreatedasupperlimitsontheactuallossesexpected(SWRCB 1999). X.5.2 Summary of Results ThissectionpresentsestimatesofthetotaleconomicoutputfromIMPLANforcropproduction (Sector111)andrelatedeconomicsectorsassociatedwiththeLSJRflowalternatives.Thisincludes boththedirecteffectsonagricultural‐relatedrevenuesandjobsasestimatedbytheSWAPmodel (whichareinputtothecropproductionsectorofIMPLAN)andtheassociatedindirectandinduced effectsontheagriculture‐relatedregionaleconomyandjobmarketasestimatedbyIMPLAN. Entire LSJR Project Area Asanoverview,TableX‐9,presentsthebaselineaveragetotaloutputfromSector111–Crop Productionplusallothersectorswithassociatedindirectorinducedeffectsalongwiththe differencefrombaseline,bothindollarsandpercent,foreachLSJRflowalternative.Tobetter understandtheeffectsasafunctionofpercentageunimpairedflow,outputisalsopresentedfor30 and50%ofunimpairedflow.Thetablefurthersplitsthetotalsectoroutputintoaveragedirect effectsandaverageinducedandindirecteffects.Ingeneral,asthepercentofunimpairedflowforan alternativeincreases,theeconomicandrelatedemploymenteffectsalsoincrease. DRAFT Evaluation of San Joaquin River Flow and Southern Delta Water Quality Objectives and Implementation X‐29 February 2012 ICF 00427.11 State Water Resources Control Board California Environmental Protection Agency DRAFT Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives Table X‐9. Average (Over the 82 Years of Simulation) Baseline Economic Output for the Crop Production and Related Sectors and Changes Associated with Various Percentage of Unimpaired Flow Requirements ChangefromBaselinebyPercentUnimpairedFlow($Millions) EconomicEffects (2008Dollars) TotalSectorOutput %ofSector Direct IndirectandInduced Baseline 20% ($Millions) $4,701 +$13 100% +0.3% $2,760 +$7 $1,941 +$5 30% 40% ‐$29 ‐0.6% ‐$17 ‐$12 50% ‐$75 ‐1.6% ‐$44 ‐$31 60% ‐$131 ‐2.8% ‐$77 ‐$54 ‐$193 ‐4.1% ‐$113 ‐$80 Tocharacterizethemagnitudeandvariabilityofrevenues,FigureX‐24presentsanexceedanceplot ofthetotaleconomicoutputfromtheIMPLANcropproductionandrelatedsectorsacrossthe82 yearsofsimulationforeachoftheLSJRflowobjectivesandthebaselinecondition. Thedifferenceinthistotaleconomicoutputaboveorbelowthebaselineconditioniscalculated acrossall82yearsofsimulationforeachLSJRflowalternativeandpresentedonanexceedanceplot inFigureX‐25.Toputinrelativeterms,thesesameannualdifferencesarepresentedinFigureX‐26 asapercentdifferenceaboveorbelowthebaselinecondition. TheSWAPandIMPLANmodelingoutputisnotdisaggregatedtotheindividualtributary watersheds.AsdemonstratedearlierinTableX‐5,theLSJRflowalternativeswouldbeexpectedto reducesurfacewaterdiversionsoverallontheTuolumneandMercedRiversmorethanthoseonthe StanislausRiver.Solikewise,theassociatedeconomiceffectsarenotexpectedtobedistributed equallyacrossthethreeLSJRtributarywatersheds. Project Area Sector Output Compared to Baseline Baseline 20% Alternative 40% Alternative 60% Alternative Regional Sector Output ($ Billion) $4.9 $4.8 $4.7 $4.6 $4.5 $4.4 $4.3 $4.2 $4.1 $4.0 0% 10% 20% 30% 40% 50% 60% Percent of Time Equaled or Exceeded 70% 80% 90% 100% Figure X‐24. Exceedance Plot of IMPLAN Estimates for Total Economic Output from the Crop Production and Related Sectors for Each of the LSJR Flow Objectives and the Baseline Condition Across 82 Years of Simulation DRAFT Evaluation of San Joaquin River Flow and Southern Delta Water Quality Objectives and Implementation X‐30 February 2012 ICF 00427.11 State Water Resources Control Board California Environmental Protection Agency DRAFT Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives Project Area Sector Output Compared to Baseline Change in Regional Sector Output ($ Million) 20% Alternative 40% Alternative 60% Alternative $200 $100 $0 -$100 -$200 -$300 -$400 -$500 -$600 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percent of Time Equaled or Exceeded Figure X‐25. Exceedance Plot of the Difference in IMPLAN Estimates for Total Economic Output from the Crop Production and Related Sectors between the Three LSJR Flow Objectives and the Baseline Condition across 82 Years of Simulation Project Area Sector Output Compared to Baseline 20% Alternative 40% Alternative 60% Alternative Change in Regional Sector Output (%) 10% 5% 0% -5% -10% -15% -20% -25% 0% 10% 20% 30% 40% 50% 60% Percent of Time Equaled or Exceeded 70% 80% 90% 100% Figure X‐26. Exceedance Plot of the Percent Difference in IMPLAN Estimates for Total Economic Output from the Crop Production and Related Sectors Between the Three LSJR Flow Objectives and the Baseline Condition Across the 82 Years of Simulation Inadditiontorevenue,theIMPLANmodelalsoestimatesthenumberofjobsassociatedwiththe cropproductionandrelated(indirectandinduced)sectorsoftheeconomy.Thetotaleffectsonjobs associatedwiththeLSJRflowobjectivesaresimilar,inrelativeterms,totheeffectoneconomic DRAFT Evaluation of San Joaquin River Flow and Southern Delta Water Quality Objectives and Implementation X‐31 February 2012 ICF 00427.11 State Water Resources Control Board California Environmental Protection Agency DRAFT Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives output.TableX‐10presentsasummaryofthetotalnumberofjobsassociatedwiththeIMPLANcrop productionandrelatedsectorsandhowtheyareaffectedonaveragebyvariouspercentageof unimpairedflowrequirements.Italsopresentsthebreakdownofjobswithinthecropproduction sector(directeffects)andthosewithintherelatedsectors(indirectandinduced). Table X‐10. Average (over the 82 Years of Simulation) Number of Crop Production and Related Sector Jobs for Baseline Condition and Changes Associated with Various Percentage of Unimpaired Flow Alternatives. ChangefromBaselinebyPercentUnimpairedFlow EconomicEffects TotalRegionalEffectto Employment(#jobs) %ofSector Direct IndirectandInduced Baseline 20% 30% 40% 50% 60% 31,787 +86 ‐196 ‐504 ‐889 ‐1,302 100% 13,080 18,707 +0.3% +35 +50 ‐0.6% ‐81 ‐115 ‐1.6% ‐207 ‐297 ‐2.8% ‐366 ‐523 ‐4.1% ‐536 ‐766 FigureX‐27presentsanexceedanceplotofIMPLANestimatesofthetotalnumberofcrop productionandrelated(indirectandinduced)sectorjobseachyearintheLSJRwatershedforeach oftheLSJRflowobjectivesandthebaselineconditionacrossthe82yearsofsimulation.The differenceinthenumberofjobseachyearaboveorbelowthebaselineconditioniscalculatedacross all82yearsofsimulationforeachLSJRflowalternativeandpresentedonanexceedanceplotin FigureX‐28.FigureX‐29presentsanexceedanceplotofthepercentdifferenceinthetotalnumberof jobseachyearintheLSJRwatershedbetweenthethreeLSJRflowobjectivesandthebaseline conditionacrossthe82yearsofsimulation.TheeffectoftheLSJRflowalternativesonjobsissimilar inrelativemagnitudetotheireconomiceffect. Project Area Regional Employment Compared to Baseline Baseline 20% Alternative 40% Alternative 60% Alternative 33,000 Regional Employment (# Jobs) 32,000 31,000 30,000 29,000 28,000 27,000 0% 10% 20% 30% 40% 50% 60% Percent of Time Equaled or Exceeded 70% 80% 90% 100% Figure X‐27. Exceedance Plot of IMPLAN Estimates for Total Jobs for the Crop Production and Related Sectors in the LSJR Watershed for Each of the LSJR Flow Objectives and the Baseline Condition Across 82 Years of Simulation DRAFT Evaluation of San Joaquin River Flow and Southern Delta Water Quality Objectives and Implementation X‐32 February 2012 ICF 00427.11 State Water Resources Control Board California Environmental Protection Agency DRAFT Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives Project Area Regional Employment Compared to Baseline 20% Alternative 40% Alternative 60% Alternative Change in Regional Employment (# Jobs) 1,000 500 0 -500 -1,000 -1,500 -2,000 -2,500 -3,000 -3,500 -4,000 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percent of Time Equaled or Exceeded Figure X‐28. Exceedance Plot of the Difference in IMPLAN Estimates for Total Jobs for the Crop Production and Related Sectors Each Year Above or Below the Baseline Condition in the LSJR Watershed for the Three LSJR Flow Objectives Across 82 Years of Simulation Project Area Regional Employment Compared to Baseline 20% Alternative 40% Alternative 60% Alternative Change in Regional Employment (%) 4% 2% 0% -2% -4% -6% -8% -10% -12% -14% 0% 10% 20% 30% 40% 50% 60% Percent of Time Equaled or Exceeded 70% 80% 90% 100% Figure X‐29. Exceedance Plot of the Percent Difference in IMPLAN Estimates for Total Jobs for the Crop Production and Related Sectors Each Year Above or Below the Baseline Condition in the LSJR Watershed Between the Three LSJR Flow Objectives and the Baseline Condition Across 82 Years of Simulation DRAFT Evaluation of San Joaquin River Flow and Southern Delta Water Quality Objectives and Implementation X‐33 February 2012 ICF 00427.11 State Water Resources Control Board California Environmental Protection Agency X.6 DRAFT Agricultural Economic Effects of Lower San Joaquin River Flow Alternatives References CaliforniaDepartmentofWaterResources(DWR).2008.EconomicAnalysisGuidebook.(ed. DepartmentofWaterResources),pp.59.DepartmentofWaterResources,,Sacramento California.Availableat <http://www.water.ca.gov/pubs/planning/economic_analysis_guidebook/econguidebook.pdf>. January2010. 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