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PAD-81-07 1 (1981-03-03)

handle is hein.gao/gaobabbpv0001 and id is 1 raw text is:                                             _._C_

BY THE COMPTROLLER GENERAL                                 Iiq 5



Report To The Congress

OF THE UNITED STATES





Federal Charges For Irrigation Projects

Reviewed Do Not Cover Costs



GAO reviewed six Federal irrigation projects
and found that the water produced will cost
the Government between $54 and $130 an
acre-foot each year, but the crops grown by
the farmers will not yield enough revenue to              114588
cover this cost. The farmers will continue to
buy the Federal water, however, because they
are charged a price below Government cost.

Repayments for irrigation are presented to
the Congress as full repayment. Since no
interest is charged, however, these payments
actually cover less than 10 percent of the
Federal Government's actual cost.

This large subsidy arose because of the desire
80 years ago to settle the West and to pro-
mote   regional economic development.
This report suggests that the original ra-
tionale for the subsidy be measured against
today's conditions.

GAO recommends that the Federal Govern-
ment's cost of irrigation be recognized in the
supporting analyses and that the size of the
subsidy be clearly presented for each project
before Federal funds are provided. Matters
for consideration by the Congress are also
presented.







                                                                      PAD-81-07
   ICOU$                                                         MARCH03. 1981

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