Economic analysis of managed aquifer recharge (MAR) typically focuses on identifying the quantity of water to add cost-effectively to natural rates of recharge. However, to the extent that MAR is successful, higher groundwater levels or at least slower depletion are likely to influence crop choice and groundwater pumping dynamics. Using a landscape-level model, we maximize farm net returns taking into account MAR and on-farm surface reservoir storage, crop choice, and the impacts of drought on groundwater use in Eastern Arkansas, USA, over 120 years. We find that drought frequency (risk) has a stronger influence on groundwater pumping and MAR use compared with drought severity. There is evidence of a substantial slippage, the percentage of the increase in groundwater use with versus without MAR divided by the MAR use, under a range of MAR cost and drought scenarios. Total slippage ranges from about 32 to 75% of total MAR water, indicating that only 68-25% of the MAR water raises groundwater levels. Even if the costs of MAR are relatively high and slippage is present, the total net returns to farms in this region are higher, and the variability in those returns are less with MAR.
Keywords: Agricultural managed aquifer recharge (MAR); Slippage (rebound) effects; Surface reservoir storage.