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The Ogallala Aquifer, which underlies a vast area reaching from Nebraska to Texas, is an important source of water for homes, industries and irrigation (Figure 1). Irrigation wells first started tapping the Ogallala in the "Dust Bowl" days of the 1930s, eventually turning 16 million acres of dry cropland and range into highly productive irrigated lands. Irrigation has changed High Plains agriculture from an uncertain and meager existence to a more certain and more viable economic enterprise. Moreover, the growth of irrigated agriculture has been the major force in the growth and development of many rural towns and communities in the Region, and their future economic well being depends, in part, on the future of irrigated agriculture.
At the present time, the prosperity and level of economic activity created by irrigation development in the Ogallala Region is being threatened by declining groundwater supplies. The recently completed High Plains Ogallala Aquifier Study found that by the year 2000 over two million acres in the Region may revert to dryland agriculture from groundwater exhaustion, increasing to over five million acres by the year 2020, Supalla, Lansford, and Gollehon [5, p. 3131. These declines in irrigation imply a reduction in the volume of economic activity for all or portions of the region, with accompanying decreases in personal income, employment, tax revenues and the general quality of life. Declining groundwater supplies also mean increased competition for water across alternative uses, which has implications for municipal water supplies and non-agricultural economic activity.