UA Little Rock Economist Examines Future of Arkansas Water and Agriculture
Agriculture is Arkansas’s largest industry, and its future hinges on one resource: water. An economist at the University of Arkansas at Little Rock is leading a major research effort to understand how farmers make decisions about irrigation in order to better recognize the pressures they face and identify solutions that could help Arkansas agriculture thrive for generations.
Dr. Kent Kovacs, associate professor of economics and finance, is part of a multi-institutional team dedicated to analyzing how farmers’ risk preferences shape water use in agriculture within the Lower Mississippi River Basin. The project, funded by the National Science Foundation, explores the complex relationship between economics, the environment, and human decision-making.
With a Ph.D. in agricultural and resource economics from the University of California, Davis, Kovacs is a natural resource and environmental economist, meaning he studies how the natural world is affected by economic activity. His current work focuses on water resource economics, an area centered on how water is withdrawn from the environment and used in economic systems.
“Natural resource economics asks how we make the best use of the earth’s resources to conduct our economic activity as effectively as possible,” Kovacs said.
Kovacs’ team is designing a survey that gathers farmer perspectives alongside hydrologic and economic models. After receiving approval from the Institutional Review Board, the researchers are preparing to begin data collection. The survey aims to assess farmers’ risk and time preferences.
“By understanding how risk-averse, risk-neutral, or risk-loving a producer is, we can better understand their choices in terms of water use,” Kovacs said. Although the project is still in its early stages, integrating farmers’ real-world experiences is central to the team’s approach.
The innovation of Kovacs’ research lies in its integration of scientific data and human knowledge. Farmers are positioned at the forefront of the project, and their feedback informs scientific models that project how scarce water resources may be stressed by extraction.
“Better information about overdraft or excessive use of groundwater can help hone policy measures that aid farmers in maintaining and increasing profit while still maintaining the natural resource,” Kovacs said.
Ultimately, the project aims to inform water policy and conservation programs in Arkansas. In the Delta, groundwater acts as a vital safeguard during severe drought, helping prevent catastrophic crop losses.
“Understanding how farmers perceive the risks around groundwater use will improve how crop insurance programs are created for farmers here in the Delta,” Kovacs said.
Kovacs’ team spans institutions and disciplines. The collaboration includes Dr. Kevin Befus, associate professor of geosciences, and Dr. Mike Daniels, professor and extension soil and water conservation scientist, both from the University of Arkansas, as well as John Pennington, a water quality educator with the Division of Agriculture’s Cooperative Extension Service. The team will conduct three workshops to bring together farmers, stakeholders, policymakers, researchers, and state and federal officials. The dialogue will guide the project’s model building and survey design.
While many assume that improved irrigation technology or increased access to surface water will ease pressure on Arkansas’s aquifers, Kovacs said the reality is more complicated. Efforts to promote efficiency — often through subsidies or major water-diversion projects — do reduce groundwater pumping, but they can unintentionally increase total water use as well.
“A lot of our policies are designed to make it easier to adopt more efficient practices, and those goals are absolutely important,” he said. “But what we see in practice is that these incentives often encourage producers to keep growing very water-intensive crops. They continue to be very dependent on water, which puts more pressure on the environment overall.”
Kovacs sees potential in establishing a clear price for water as an effective incentive for conservation. Pricing water, either through direct fees or cap-and-trade systems, would encourage farmers to adopt efficient practices on their own and reduce overall water consumption — not just shift it between sources.
“When there’s a transparent price for water, producers naturally become more efficient,” Kovacs said. “It’s not always popular, and it may come with economic trade-offs, but it’s one of the most effective ways to protect our natural resources and reduce stress on our environment.”
Kovacs sees this project as an opportunity to strengthen how Arkansas protects its water resources. By connecting scientific research with the real-world challenges farmers face, the team hopes to guide policies that balance economic growth with responsible resource management to ensure a stronger, more sustainable future for Arkansas.