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THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE
The land ownership structure in the Texas Panhandle was largely
established based on the wide availability of Ogallala aquifer irrigation water.
Plentiful irrigation encouraged ownership of management units of less than
640 acres, as such acreage provided acceptable economic returns for a typical
producer. However, production and management units even smaller with 320
acre or 160 acre are common in the area. Furthermore, center pivot irrigation
systems encouraged land ownership structure in multiples of 160 acres. This
ownership structure has largely remained in the Texas Panhandle, despite
reduction in irrigation.
Reduced or non-existent irrigation for land areas less than 640 acres
is challenging for producers. The risk of catastrophic or nonexistent yields is
greatly increased without irrigation. In addition, lower average per acre
yields associated with dryland systems often produce insufficient income to
support producers on historical acreages of less than 640 acres. A logical
solution used to address the lowered or insufficient income/acre associated
with dryland systems is to simply expand acreage in an attempt to generate
the level of income necessary to support the producer. This approach is
common throughout agriculture, and offers several advantages related to
scale, especially lower per unit costs of fixed assets such as farm equipment.
However, only a minority of producers have transitioned to large scale
production. Most producers have not altered their land ownership or
management structure significantly due to age of producer or owner,
absentee ownership, capital requirements, managerial ability, risk aversion,
or personal preference. Additionally, a persistent social ethic encourages the
retention of numerous small production units rather than very large
operations. Production alternatives for Panhandle producers that retain the
historical ownership structure are therefore sought.
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