A federal subsidy so far missed by budget cutters -- irrigation

It seems like a perfectly good Republican idea: Provide a federal subsidy only to the extent that it is truly needed, and make the recipients pay their share whenever possible.

This argument, which underlies much of the Reagan administration's budget-cutting these days, is being thrown back at the White House in an attempt to drastically reduce a large government expenditure in President Reagan's home region --federal subsidies for farm irrigation.

The General Accounting Office (GAO) recently reported that farmers in the West who receive water from federal irrigation projects pay only a small fraction (less than 10 percent on average) of its cost.

In one central California project area, for example, farmers pay only $7.79 per acre-foot of water (about 325,000 gallons). The full cost is $86.54, with taxpayers picking up the balance. Multiplied by the millions of acres served by such projects in the West and the vast amount of water involved, the total federal subsidy adds up to several billion dollars.

The original intent of water reclamation law was to encourage westward settlement and regional development. But there is growing agreement with the GAO conclusion that "those goals have been reached and the projects should now be reevaluted in the light of current economic and social conditions."

The GAO recommends that the Interior Department rethink the way it arrives at water charges. The rate charged for each irrigation area is determined, in large part, by how much the department figures the farmers can afford to pay.

Rep. George Miller (D) of California has introduced legislation requiring that construction and operating costs be recovered from water users.

"Irrigation is a program where the subsidies just grew and grew, and now we find billion of dollars in taxpayers' money being used ot subsidize some of the wealthiest agricultural interests in the United States," says Mr. Miller.

The issue is a key part of broader water policy questions that will have to be faced by Congress and the new administration.

One is growing controversy over whether federally irrigated farm land should be reserved for "family farms" of modest size (160 acres per family member), as Congress originally intended. Studies consistently have shown that much of this land already is held by large farming interests, including absentee corporations.

One recent Interior Department study notes that fewer than 3 percent of farm operators control nearly one-third of the land in federal reclamation areas.

Last year the House and Senate could not agree on legislation setting new acreage limits. Sources close to the issue expect it to be resolved in favor of increased limits, reflecting the "economies of scale" possible in large farms.

Another growing concern is water conservation and the long-range environmental effects of massive irrigation. Among the points of concern are ground water shortages in Arizona and other parts of the West, increasing salinity as a result of irrigation in California's San Joaquin Valley, and the wisdom of damming more rivers to cultivate land of marginal agricultural value.

The Interior Department has found that increasing the price of irrigation water to more accurately reflect its true cost would result in farmers using it much more efficiently. Congressman Miller likens this to deregulating the price of oil and gas in order to encourage conservation of those valuable resourceS.

Interior Secretary James Watt says "the marketplace" should govern energy development in the United States. Congressman Miller seems determined to find out if the Reagan administration will apply the same s tandard to using the nation's water resources.