Irrigation Investment on an American Indian Reservation

Abstract

American Indian reservations have low incomes and high rates of poverty relative to adjacent communities, and the income gap appears to be even larger for Indian farmers. We examine the extent to which a lack of access to capital might explain these differences using irrigation systems as a proxy for on‐farm investment around the Uintah‐Ouray Indian Reservation in eastern Utah. Uintah land is held in trust by the US government, and farmers on this land face significant barriers to acquiring capital to invest in irrigation equipment and infrastructure. We use the boundaries from a 1905 land allotment as a natural experiment, employing both sharp and fuzzy regression discontinuity designs to explore whether agricultural land use, irrigation levels, irrigation investment, and crop choice differ across the boundary. The original allocation provided similar land in the immediate neighborhood around its borders, and our results suggest that today tribal trust land is farmed and irrigated at rates similar to adjacent land. However, conditional on being irrigated, tribal trust land is around thirty‐two percentage points less likely to utilize capital‐intensive sprinkler irrigation, and up to ten percentage points less likely to grow high‐value crops. Trust ownership, which is characterized by cumbersome bureaucratic processes, limits on agricultural lease flexibility, and the inability to use land as collateral to acquire loans, is a likely explanation for the observed differences.

Economic analysis of the environmental sustainability of agriculture: recent studies using quasi-experimental methods

“…Second, utilizing the discontinuities and limits created by agricultural policies and regulations, local treatment effects on farms could be estimated using RD or IV methods with cross-section data. For example, policies can establish thresholds in space (Ge et al, 2020), farm size (Sneeringer and Key, 2011), input use (Pfeiffer and Lin, 2012), and insurance coverage (Weber et al, 2016), which facilitate identification because of the changes in treatment probability near the thresholds.…”

“…Though panel data are used in this analysis, Pfeiffer and Lin did not include fixed effects to control for timeinvariant farm or farmer characteristics. Ge et al (2020) examine how different property rights regimes may affect irrigation investment and agricultural land use, employing a spatial RD design around the Uintah-Ouray Indian Reservation in eastern Utah. The Uintah-Ouray Reservation is the second largest by area in the United States.…”

“…Their estimates show that though tribal-trust land is farmed and irrigated at rates similar to adjacent fee-simple land, it is less likely to use sprinkler systems for irrigation and to grow high-value crops. Ge et al (2020) first use a sharp RD design, comparing the land that has been under the same property rights regime since 1905 across the 1905 allotment boundary. The empirical strategy requires that the land under the fee-simple ownership in the immediate vicinity outside the 1905 boundary serve as counterfactual to the land under tribal trust in the immediate vicinity inside.…”

Trends in U.S. Irrigated Agriculture: Increasing Resilience Under Water Supply Scarcity

“…Reservation land is a patchwork of private property and land held in trust by the Federal government on behalf of Tribes and individual Indians. Recent research by Ge et al (2020) suggests that land held in trust on reservations is less likely to be irrigated with a capital-intensive irrigation system, as land tenure arrangements may hamper access to capital. While negotiated settlements may support reallocated water rights for irrigation expansion on reservation lands, Tribes may also agree to lease water to off-reservation agricultural users, non-Indian lessees on reservation lands, and nonagricultural users such as municipalities (H.R.4783).…”

Property Rights without Transfer Rights: A Study of Indian Land Allotment

“…Our study contributes to these by providing plausibly causal estimates of the cost of non-transferable land rights, using highly disaggregated spatial units of analysis. By including the near-universe of allotted reservations, we provide the average treatment effect to complement a number of case studies comparing trust-land and fee-simple land on specific reservations, including Agua Caliente in California (Akee, 2009;Akee and Jorgensen, 2014), Fort Berthold in North Dakota (Leonard and Parker, 2021), and Uintah and Ouray in Utah (Ge, Edwards, and Akhundjanov, 2019). Our paper is also similar to Arag ón and Kessler (2020), who find that Canada's "certificates of possession," which are similar to allotted-trust rights, fall short of generating the benefits of full property rights.…”