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Agriculture and Ranching 227may exacerbate water scarcity problems at the basin scale. Policies to increase irrigationefficiency with the hope of freeing up water for other uses may fail to conserve water.11.4 System-wide Water Management: Lessons fromProgramming Models of Water AllocationA number of studies have used mathematical programming models to assess how differentareas of the Southwest may respond to different drought, water shortage, orclimate-change scenarios—which may include changes in temperature, level and typeof precipitation, and the timing of mountain snowmelt and runoff into lower elevationagricultural regions (Cayan et al. 2008). To varying degrees, these studies link physicalwater supply and associated hydrologic information to economic models. Model solutionsfind the least-cost response to water shortages given system constraints. A commonfinding of these studies is that the agricultural sector makes large adjustments inwater use, land use, and cropping patterns that allow urban and industrial water uses toremain largely unchanged.Sustained drought in CaliforniaHarou and colleagues (2010) examined the effects of severe, sustained drought in California.Their drought simulations, based on records of ancient (paleo-) climates, assumedstreamflows that are 40% to 60% of the current mean flows, with no intervening year wetenough to fully replenish reservoirs. This drought scenario is similar to the effects under“dry forms” of climate warming: those with projected reductions in precipitation. Theanalysis examined potential impacts to agriculture and the rest of California’s economyin 2020. The model simulated allocation and storage of water to minimize costs of waterscarcity and system operation. The costs in the drought scenario were borne largely byagriculture, limiting costs to the state’s overall economy. The costs of water shortageswere greatest in agriculture, except in Southern California where urban costs dominated.Large differences in scarcity costs across sectors and regions created incentives totransfer water from lower-valued agricultural to higher-valued urban uses, where valueis determined by user willingness to pay for additional water. The study also calculatedcosts of maintaining required environmental flows and found these could be quite high,especially for the Sacramento-San Joaquin River Delta. Results also suggested there arelarge benefits to improving and expanding the conveyance infrastructure to facilitatemovement of water.Water availability and crop yields in CaliforniaHowitt, Medellín-Azuara, and MacEwan (2009, 2010) simulated the effects of changesin water availability and crop yields in California in 2050. While statewide agriculturalland use and water use were projected to decline by 20% and 21% respectively, totalagricultural revenues fell by less: 11%. There were large reductions in acreage of waterintensivecrops and small shifts in others. In Southern California agriculture, two factorsreduced negative impacts to farmers. Crop price increases accompanied production declines,while farmers also shifted to high-value crops. The greatest reductions in outputwere among field crops, with relatively less change among fruit and vegetable crops.