Let’s avoid buy & dry

Economy | Winter 2023

There is a social and community aspect of irrigated agriculture that is not often addressed in this periodical. It’s important because irrigated agriculture is the economic base of many rural communities in the arid West and helps promote a lifestyle and set of social values that many don’t get to experience but nearly all want to preserve.

It is no secret that the practice of “buy and dry” chips away at these communities as nearby (or distant) municipalities requiring additional raw water agree to pay high prices to dry up irrigated acreage and, unintentionally, diminish the rural economy. This isn’t a popular practice in Colorado, for instance, because surveys have shown strong public support for preserving rural communities, but it happens because it’s usually less expensive and less environmentally damaging than developing new supplies. Some municipalities have developed lease-back agreements with farmers that attempt to keep irrigated acres in production as long as possible, but once the ownership of the water rights leaves the farm, it’s considered lost by local residents.

Personally, I have two responses to this, one pessimistic and the other more hopeful. The first is that the impacts to rural communities are likely worse than my economist friends estimate and the other is that some positive action is being taken to minimize these rural impacts and potentially create something positive.

A pilot program in Colorado’s Lower Arkansas River Valley is demonstrating that municipalities and irrigators can work together to share water.

Economists tend to use economic multipliers when estimating the impacts of a reduction in irrigated agriculture acreage in a specific geographic area, such as a county or group of counties. These multipliers will tell the analyst how much economic output and earnings may be reduced, and how many jobs might be lost, if irrigated acreage is reduced by, say, 1,000 acres. But the multipliers are linear in nature and only estimate the incremental impacts, not the cumulative impacts, of these reductions in economic activity.

These cumulative impacts are triggered by “tipping points” for rural businesses and services, in the sense that different types of businesses require some critical mass of people and economic activity for support. As the economy contracts, tipping points for businesses are reached, causing them to close or relocate. These closings cause additional reductions in economic activity. Although it’s not the infamous “economic death spiral,” there is an empirical basis for rural economic tipping points that needs further exploration.

On a more positive note, a pilot program in Colorado’s Lower Arkansas River Valley is demonstrating that municipalities and irrigators can work together to share water without reducing local economic activity and allowing the ownership of the water to remain in the irrigators’ hands. The “Super Ditch” is not an actual ditch but a consortium of irrigation districts who account for a large portion of the senior water rights in the basin.

The Super Ditch is using a rotational fallowing leasing approach to provide a portion of the water supply for two communities near Colorado Springs. As the name implies, parcels are rotated on an annual basis among the participants to spread the adverse production impacts across the districts. Lease revenues, about $500 per acre-foot for the pilot study, are being spent mostly locally by the owner-operators participating in the program creating a net benefit for their communities. So, there is some hope for the future in the area of irrigator and municipal cooperation.

George Oamek, PhD, is an independent agricultural economist with Honey Creek Resources and is also on the staff of the Platte River Recovery Implementation Program’s executive director’s office.



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