Persistent drought and rapid population growth have stretched the Southwest’s supply of potable water to the limit, prompting price increases and restrictions on residential use from the Rocky Mountains to the Mojave Desert.
Meanwhile, the West’s biggest guzzlers — California farms — remain completely insulated from these conditions, soaking their crops with water delivered at heavily subsidized rates. So while homeowners tear out their lawns in favor of desert landscaping and cover their swimming pools, enough irrigation runoff dumps into the Salton Sea each year to meet the needs of Clark County’s entire population. In the lush Sacramento Valley, white rice fields are flooded to produce a crop that’s already plentiful around the world.
But market pressures are finally forcing California farmers to reconsider their consumption habits. Many of them plan to stop growing food — and make more money in the process.
The thirsty Los Angeles and San Diego metropolitan areas are willing to pay more for drinking water than the farmers can make sending crops to the supermarket. So their local water districts are selling agricultural allotments on the open market to meet residential demand.
Farmers pay below-market water rates established by state and federal law. In a wet year, an acre-foot of water (enough to supply two Las Vegas Valley homes for a year) that would fetch $50 on the open market would typically cost a farmer only $30. In today’s climate, farmers might pay $60 per acre-foot when urban water districts are willing to pay $200.
“It just makes dollars and sense right now,” said Bruce Rolen, who grows rice and wheat near Sacramento. He plans to let 100 of his 250 acres lie fallow this year and sell his irrigation water to the highest bidder.
For too long, water allotments have been determined by antiquated compacts and arbitrary estimates of decades gone by. It’s extremely encouraging to see the region’s most important resource distributed through market forces, where the greatest need brings the highest price.
As the West’s largest cities continue to grow, so will demand for drinking water, regardless of whether river basins and aquifers can accommodate that growth. Water must be treated as a commodity, not a birthright, to meet future demand.
Eventually, such transactions should be possible between states, not just within them. The law of the Colorado River currently makes such exchanges between Nevada and California impossible to execute. The Southern Nevada Water Authority, which has bought thousands of acres of ranchland in rural Nevada counties to build its portfolio of water rights, should one day have the ability to negotiate directly with Imperial Valley farmers in California for their water allotments.
Some groups raise the legitimate question of just how much farmers should benefit from these sales. Agribusinesses are considering so many offers only because they get the water at a steep discount. The end result is residential consumers buying some of the water twice: subsidizing the farmers’ claim as taxpayers, then paying for it again as customers of an urban water authority.
Undoing more than 100 years of water law won’t be an easy task, especially with so many environmentalist organizations using the courts to block the movement of water resources — a federal judge in California ordered restrictions on some pumping operations to preserve a species of “threatened” fish.
But the long-term solution for the West’s water woes lies in embracing the market forces that determine what we pay for everything, from gasoline to bread to eggs. Ultimately, the region’s water resources must be put to their most productive use — and that’s not always agriculture.