Irrigated agriculture and rural economies

In the U.S., much of the food, fiber and fuel production takes place in rural areas, where agriculture is essential to local economies. These agricultural regions increasingly depend heavily on legal and physical access to water for irrigation to mitigate production risks by ensuring that crop water needs are met during the growing seasons. High dependency on reliable water access makes rural economies particularly vulnerable to agricultural water-related risks. When water becomes scarce, the economic ripple effects can be severe, leading to financial uncertainty and heightened concerns for the well-being of rural communities.

Anecdotes about water scarcity-related hardship in rural communities are not uncommon. For instance, irrigation equipment is left stranded due to depleted water resources, resulting in lower agricultural yields and profits, and consequentially, unpaid operational or real estate loans. In some cases, private energy providers avoid investing in rural agricultural areas with a history of water shortages, potentially further escalating the economic challenges these communities face. There are examples of domestic private wells running dry due to the increased intensity of agricultural irrigation during severe drought, often resulting in the least expensive but unsustainable solutions, like digging deeper wells for domestic water use, because looking for fairer solutions in courts is often unaffordable.

Water shortage-related experiences are particularly evident in more arid agricultural regions in the western and southern U.S., where water scarcity has been an issue for decades.

Water shortage-related experiences are particularly evident in more arid agricultural regions in the western and southern U.S., where water scarcity has been an issue for decades. In these areas, irrigated agriculture has been shrinking. As agricultural production declines, entire rural communities feel the impact. To navigate this transition, careful and proactive planning is critical, focusing on understanding the economic consequences for areas where agriculture may no longer be viable.

Regions transitioning from nonirrigated to irrigated agriculture also face challenges. Over the past several decades, increasingly variable precipitation patterns have caused frequent rainfall shortages and droughts, even in areas that historically relied on rainfed farming. This shift has incentivized many farmers to invest in supplemental irrigation systems, leading to the expansion of irrigated agriculture toward the eastern portion of the U.S.

While irrigation expansion can offer opportunities for increased agricultural productivity and economic growth in rural economies, it also raises concerns. Many newly irrigated areas lack the strong water governance frameworks necessary to ensure long-term water sustainability. Without such governance, these regions may experience water shortages and disputes among different water users. Investing in efficient irrigation technology is important to ensure stability in agricultural production and can be essential for water conservation, but in regions with weak water institutions, these investments can introduce additional risks, including potential over-extraction of water resources.

Water scarcity not only affects farmers but also has broader implications for other sectors. It impacts many stakeholder groups in both the public and private sectors, including finance, energy, irrigation equipment manufacturers, seed and agrochemical companies, commodity groups, policymakers, environmental organizations, and private citizens. The resiliency of the agricultural sector, and as a result, rural communities, depends on the actions taken by these diverse stakeholders.

Proactive and collaborative efforts are needed to address water-related risks effectively and ensure that legal water access reflects new hydrological realities. Otherwise, the challenges currently faced by more arid regions in the western and southern U.S., where irrigated agriculture is shrinking, could become common in newly irrigated areas. By proactively addressing these water-related risks, rural communities can better protect their economies and sustain agricultural productivity in the long term.

Renata Rimšaitė, PhD, is a senior program manager for the Daugherty Water for Food Global Institute at the University of Nebraska. Views or opinions expressed in this column do not represent her employer.