agricultural production and yields per acre have increased, due to modernization of equipment, improved seed varieties, better farming methods and all around know-how. Agriculture has become far more scientific than it was even 10 years ago. The agricultural production has gone up; likewise costs of labor, farm equipment, supplies, fertilizer, insecticides, et cetera; volume has substantially increased.

We have employed Navajo Indians very successfully since 1942 in a lot of our farmwork, mainly in our harvesting. We provide them transportation from the reservation starting in our November harvest and returning them in the spring as we finish. This covers our peak need and is very satisfactory to them as most of them have homes on the reservation and some have small farms and herds which require their work on the reservation during summer months. Also, the Indians like to winter in this milder climate and can earn sufficient to carry themselves and families, and many have taken back substantial savings each season. We have had from 150 to 250 on our ranch from November to spring, with a few working the year round. They have taken hold well and are doing a creditable job in the work assigned

them.

Arizona's cattle production has increased primarily due to heavy influx of cattle from other States, as the desert areas of Arizona have proved to be very desirable as feeding grounds for finishing out cattle for market. These cattle go mainly to the west coast with some being marketed in the Midwest. Cash income from cattle finished for market, has more than trebled since 1951 and this cattle concentration for fattening for market has created a local market for much of our irrigated feeds. We produce a well-rounded supply of feed for proper rations for cattle feeding, which are barley, maize, alfalfa, ensilage, and cotton seed. We are now an importer of considerable cereals from other States for cattle feeding from adjoining States and as far away as Kansas, Oklahoma, and Texas.

Arizona continues to produce sugarbeet seed for approximately 60 percent of our national beet sugar production.

The drop in our water table has continued at an alarming rate, which points up the real urgency for an authorization and speed forward with the development of the central Arizona project. We said in the previous hearings that this was a feasible project and with the vast growth that has come to Arizona and the population that must be taken care of in our metropolitan areas, along with the industrial developments in this area, a more solid and more highly diversified economy has been built that leave no question about the feasibility of this project, and certainly there can be no question about the need, as we have already started a reversion of good land to the desert and I am confident there is no choice except for a continuation of more of this land going out. Remember most of these are highly developed lands that have produced well but simply need supplemental water.

While I have spoken mainly of my own production with which I am most familiar, still I have a general knowledge and close acquain

tance with much of the irrigated areas in Arizona, as chairman of the board of Arizona Public Service, which is the largest utility in Arizona serving electricity or gas or both to 10 of our 14 counties. In our total area, on a survey that we made in 1962, we serve power for pumping on a gross of 563,210 acres. To give this service we generate all of the power that is used by independent pumpers in unorganized districts. However, in organized irrigation districts and in the power districts which have hydropower contracts we supplement with steamgenerated energy and perform a service on the whole power supply.

I might explain that formerly we had considerable hydropower but not being a preference customer and under the recapturable regulation, we were asked to relinquish, and did release, this power to various districts in 1962, prior to the expiration of a contract which ran until 1964, and have only 50 kilowatts of hydropower remaining under contract; however, we have steam generation for approximately 1 million kilowatts of power, from which we supplement the shortages to a number of the districts that we serve in our franchised area. iVe also serve some areas with gas for pumping.

The territory that Arizona Public Service serves is well representative of the State agricultural commodity production. Due to favorable climate, Arizona produces approximately half of the U.S. production of long staple cotton, which is not in surplus, and only slightly over 2 percent of the short staple acreage.

Feed grains and hay, cattle ranching and feeding for market, dairying, poultry raising, and practically all varieties of fruits and vegetables are grown in the State. Timber is also an important item of harvest for lumber and pulp. Arizona has a well-balanced economy that adds greater stability to the central Arizona project development. Manufacturing now produces Arizona's largest gross income, with livestock and our highly diversified agricultural crop production second, closely followed by mining; and, of course, Arizona has a substantial tourist business that adds to our metropolitan population and its required service.

At $10 per acre-foot, the total water available to Arizona will be oversubscribed, the municipal need is already substantial, and by the time this project is a reality the municipal need will have increased materially. We are not bringing in new land under this project, we will be rehabilitating some farms already out of production and saving many more that will go each year. Having a well-developed farm without water is like having a good piece of equipment without fuel to operate it. I'm sure authentic figures will be in the record to support the need and economic feasibility of this and it is an area well worth your support.

Senator HAYDEN. I want to compliment you, sir, upon a statement which clearly demonstrates the loss to the Nation as a whole if we do not obtain the water required from the Colorado River to carry on this project. Thank you, sir.

The next witness is Dean Harold E. Myers, School of Agriculture of the University of Arizona.

24-493-63-pt. 1-10

STATEMENT OF DEAN HAROLD E. MYERS, COLLEGE OF AGRICULTURE, UNIVERSITY OF ARIZONA; ACCOMPANIED BY DR. J. S. HILLMAN, PROFESSOR OF AGRICULTURAL ECONOMICS AND HEAD OF THE DEPARTMENT OF AGRICULTURAL ECONOMICS, UNIVERSITY OF ARIZONA

Mr. MYERS. Senator Hayden, I am Harold E. Myers, dean of the College of Agriculture, the University of Arizona. With me is Dr. J. S. Hillman, professor of agricultural economics and head of the Department of Agricultural Economics, the University of Arizona. Agriculture is a major factor in Arizona's economy. About onefourth of all people employed in Arizona are engaged in agriculture directly or in industries and services dependent upon agriculture.

Arizona agriculture is predominantly based on the irrigation of desert valleys. At the beginning of the century less than 200,000 acres were irrigated, most of which were irrigated by diverting surface water from streams. Beginning about 1920, the groundwater used for irrigation purposes became an important factor and, except for Yuma County and the San Carlos irrigation project, additional irrigation water since that era has come from pumping. The greatest acreage ever irrigated in the State was in 1953 when 1,300,000 acres were irrigated. Acreage has declined since that time. The approximate reduction of 150,000 acres has been largely concentrated in Pinal and Maricopa Counties.

Historically, the economy of Arizona has been heavily dependent on income and raw materials produced in the agricultural sector. Arizona farms produced crops valued at over $325 million in 1962. Another $226 million of livestock and livestock products were produced. Gross value of agricultural production in Arizona compares favorably with income produced in other sectors of Arizona's economy as indicated by chart 1 over here to the side.

The second chart shows that agriculture since World War II has varied between 25 and 41 percent of total income from agriculture, manufacturing, mining, and tourists, averaging about 30 percent (data in table 1). In spite of recent rapid increases in manufacturing, agriculture has managed to hold its own since 1955. If water supplies had been available in recent years in the same magnitude of early postwar years, agricultural income might have been even greater.

In addition to the value of crops produced, worth noting is the wide variety of crops grown on Arizona farms, including citrus. grapes, lettuce, melons, a wide variety of other vegetables and specialty crops, including commercial rose production. The national supply of some horticultural products such as lettuce and melons is heavily dependent on Arizona production during certain seasons.

NEED FOR ADDITIONAL WATER

An increased pumping lift, coupled with other factors, is resulting in a continued reduction of land irrigated in Arizona. Pinal County, an area largely dependent on pumping, decreased from 315,000 irrigated acres in 1952 to 258,000 irrigated acres in 1962, and a more dramatic drop is in prospect unless a supplemental water supply is found. A severe economic loss results when land, prepared for crop production through irrigation, goes out of production. The high level of investment in land preparation, wells, equipment, and other resources required for development may be of little value.

The importance of agriculture and the resultant loss, should agriculture decline decidedly, can be adduced from facts published recent ly by a California growers' organization.1

Using their information and recognizing the similarity between the two agricultures, it appears that for every 100 employed in agriculture another 250 or more are employed in closely related industries such as processing, packaging, transporting, storing, and selling. Farming in itself accounts directly for about 30,000 jobs in Arizona. This becomes of much greater importance, something close to 100,000 jobs, when such multiplier effects are taken into consideration. This was about one-fourth of all people employed in Arizona in 1960.

LOSSES DUE TO UNCERTAINTY

A good example of losses which plague agriculture because of water uncertainty in the San Carlos irrigation project located in eastern Pinal County. Less than half of the developed area of this project, which comprises 100,000 acres, can be planted to crops in any given year due to the shortage of water.

Compounding the San Carlos problem is the fact that the flow from the Gila and San Pedro is so erratic that farmers cannot make efficient use of the water which is available. Farmers don't know at planting time how much water will be available. Hence, not only is water inefficiently used but so are other resources due to economic uncertainty. Supplemental water from the Colorado River could contribute considerably to farm income by providing a certain amount of stability. But, the need for this stability should not be interpreted as a request for water to develop new land for irrigation, since there is to be no new irrigated land under the proposed project.

Stability alone is an important fact to be desired in agriculture. A recent study by the Department of Agricultural Economics, the University of Arizona points out the effects of this unstable water situation on the farmer decisionmaking process in the San Carlos project area. This study shows that the low probability of having sufficient

1 Council of Agricultural Growers, "Agricultural Briefs on California."

water during the latter part of the growing season has restricted farmers from planting the crops which would yield the highest returns. A supplemental stable water supply would not only stabilize the agriculture of the San Carlos area but also would assist in stabilizing the community and State.

VALUE TO ARIZONA OF GROUND WATER USED IN AGRICULTURE

Arizona produces crops on about 800,000 acres of land by using irrigation water pumped from underground. In 1962 the value of crops produced on this acreage was $220 million. The $220 million received currently for the crops produced on these 800,000 acres will continue annually so long as groundwater is available to be pumped at economical costs, assuming no changes in price relations, technology, and irrigation practices. We estimate that on the average over the pump water areas in the State, the water table is falling about 612 feet per year and will reach the limit of economic pumping in about 24 years assuming no change in technology or price structure.

If these $220 million per year could be received indefinitely because the water table could be prevented from receding, these dollars would continue to flow indefinitely through the Arizona economy continuing to generate incomes to the State's economy. However, if the agriculture dependent on groundwater for its irrigation disappears after 24 years, then, beyond that time, these $220 million will no longer be available to perform their service of generating income in the State's economy.

How much will this damage the State economically? Let's put it this way

$220 million annually in perpetuity at 5 percent discount is worth $4,400 million today.

$220 million annually for only 24 years, again at 5 percent discount, is worth $3,036 million today.

The difference between $4,400 million and $3,036 million is $1,364 million. This means that, as of today, the economy of the State of Arizona stands to take a loss of $1,364 million if some means is not found to prevent the ultimate and inevitable disappearance of that part of its agriculture now dependent on pumped water. This estimated loss of $1,364 million is far in excess of the estimated construction cost of the central Arizona project.

This is the minimum loss to the State if the decline in the water table is not arrested. This loss takes only partial cognizance of the loss of other incomes generated in the State through the multiple respend