Questions and Concerns

Abstract

Farmers are savvy businesspeople who understand the opportunities markets provide. If a housing developer approaches a farmer with an offer to purchase water rights, the farmer has four options. First, the farmer might decline the offer, whether because the offered price is too low or for any other reason. Second, the farmer might look around and notice that the forty acres behind the barn have mostly clay soil, with a low crop yield in bushels per acre. The farmer might decide to fallow this land and sell the conserved water to the developer for profit. Third, the farmer might sell the conserved water and use the proceeds to modernize the farm's irrigation infrastructure. In the case of one rancher in Oregon, $700,000 offered by the Oregon Water Trust allowed a ranching family to install a center-pivot irrigation system. The new system enabled that family to grow just as much alfalfa with less water—a win-win solution (Glennon 2009).