Kovacs (2026) Targeting Investment in On-farm Surface Water Storage for Groundwater Conservation

Identification

• Journal: Environmental Management
• Year: 2026
• Date: 2026-01-09
• Authors: Kent Kovacs
• DOI: 10.1007/s00267-025-02363-3

Research Groups

• Department of Accounting, Economics, and Finance, University of Arkansas at Little Rock, USA.
• University of Arkansas Division of Agriculture.
• Arkansas Department of Agriculture, Natural Resources Division.

Short Summary

This study develops a hydro-economic optimization model to evaluate the cost-effectiveness of subsidies for on-farm surface water storage as a tool for groundwater conservation. The findings indicate that current subsidies generate a positive social net benefit of $12.32 per acre-foot ($0.01 per m³) after 30 years, significantly increasing aquifer thickness in high-intensity rice-growing regions.

Objective

• To determine the site-level net benefits of groundwater conservation by balancing the costs of subsidies for on-farm surface storage against the long-term economic benefits of reduced aquifer depletion.

Study Configuration

• Spatial Scale: 449 sites (each approximately 64.75 km²) across 25 counties in the Lower Mississippi River Basin of Arkansas, USA, covering the Mississippi River Valley Alluvial Aquifer (MRVA).
• Temporal Scale: 200-year planning horizon (to approximate an infinite horizon), with results focused on 5, 30, and 60-year intervals.

Methodology and Data

• Models used: Spatially explicit hydro-economic optimization model implemented in GAMS 24.5.6 (CONOPT solver); "bathtub" aquifer dynamics model; soil water balance model for natural recharge estimates.
• Data sources: 2023 Cropland Data Layer (satellite-based land cover); USDA-NASS harvested area data (2022–2023); Arkansas Department of Agriculture (aquifer saturated thickness, depth to water, and storativity); USGS (MERAS model enhancements); FAPRI-MU (crop price projections).

Main Results

• Economic Efficiency: Under the current 65% government cost-share subsidy, the average social net benefit of conserved groundwater is $12.32 per acre-foot ($0.01 per m³) after 30 years.
• Hydrologic Impact: The subsidy increases average aquifer thickness by 10.6% (approx. 0.42 m) after 30 years and 18.7% (approx. 0.70 m) after 60 years compared to the baseline.
• Cost-Benefit Dynamics: The average cost of conservation via subsidy decreases over time, from $16.12 per acre-foot ($0.013 per m³) at year 5 to $5.76 per acre-foot ($0.0047 per m³) at year 60.
• Targeting Criteria: Net benefits are maximized at sites characterized by high rice yields, low dryland soybean yields, shallow depth to the aquifer (lower pumping costs), and high natural recharge.
• Subsidy Intensity: Lowering the subsidy percentage increases the net benefit per unit of water conserved but leads to a lower total volume of groundwater saved.

Contributions

• Establishes a spatially explicit framework for evaluating the "net benefit" of conservation, integrating both the social cost of taxpayer-funded subsidies and the long-term agricultural gains from stabilized water tables.
• Provides empirical evidence that on-farm surface storage is a viable long-term strategy for aquifer recovery, particularly in water-intensive rice production landscapes.
• Offers a methodology for policy-makers to prioritize conservation funding by identifying site-specific biophysical and economic indicators that predict high returns on investment.

Funding

• University of Arkansas Division of Agriculture.
• Arkansas Department of Agriculture.

Citation

@article{Kovacs2026Targeting,
  author = {Kovacs, Kent},
  title = {Targeting Investment in On-farm Surface Water Storage for Groundwater Conservation},
  journal = {Environmental Management},
  year = {2026},
  doi = {10.1007/s00267-025-02363-3},
  url = {https://doi.org/10.1007/s00267-025-02363-3}
}

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