Water for the Southwest/ A valuable commodity. Clamor grows to buy, sell, lease water -- but obstacles remain
Water, civilization's most precious natural resource, is not yet traded alongside pork bellies in the trading pits of Chicago's commodities markets. But in the West, where water has been treated as something of a public good for nearly a century, there is a growing clamor to buy, sell, and lease it in the open marketplace.Skip to next paragraph
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The notion of treating water as a commodity has been promoted by environmentalists who want to see the price of water reflect its real value. The premise: Cheap water is wasted water.
Furthermore, the notion is catching hold with those who need water and want to buy it from the farmers who have it, but can't always use it. This is especially true among the growing Sunbelt cities.
The potential for marketing water is great, but so are the obstacles.
At the southern end of the immense and sweltering flatness of California's San Joaquin Valley, where a state canal supplies irrigation water, farmers make the erstwhile desert bloom for about $55 per acre-foot (an acre of water one foot deep).
At the northern end, where an older federal project supplies water, it costs farmers only about $5 per acre-foot.
According to a state legislative study, if the northern region sold some water to the southern region, each side would benefit by roughly one million dollars a year -- through cheaper water for the South and high-water profits for the North. Two California assemblymen even went down to the valley this spring to try to interest farmers in, such a trade.
If the entire state traded water between regions in an open market, the potential revenue all around would amount to $156 million a year by 1995, according to Henry Vaux, an economist with the University of California at Riverside,
But little water trading activity has actually taken place. The West's long history of water wars has turned farmers and rural communities into skeptics.
Farmers fear losing their rights to the water if they allow someone else to use it. And communities fear farmers will sell out, take their profits, and leave local commerce to wither away.
``The only real obstacles are people's attitudes, but those are going to take awhile to change,'' says Jerry Meral, director of the Planning and Conservation League in Sacramento.
In the Rocky Mountain states, water rights have been traded for years, and water markets are becoming more widespread and sophisticated.
In the Northern Colorado Conservancy District, which includes Fort Collins and Boulder, farmers frequently sell their water shares to pay off part of their debt, says water broker Craig Harrison. Often they lease the water back; sometimes they shift to crops that require less water. ``If someone sells all their water, they grow wheat,'' he says.
``We haven't gotten to the point where the prices are listed in the newspaper,'' says Mr. Harrison. ``But we may.'' Harrison is trying to encourage commodity investors -- and not just water users -- into the water market.
The selling of water rights has become frequent enough in some New Mexico river basins -- usually a farmer selling his water to a city -- that prices have risen dramatically.