source ref: ebookwas.html
For irrigated agriculture, water must be available not only physically but institutionally. Laws, customs, politics, and groups determine whether irrigated agriculture is favored or disfavored in the competitive arena of water management. The fourfold thesis of this paper is: (1) water reallocation and management is gradually replacing water development in the western U.S.; (2) irrigated agriculture's favored legal-political position is declining, but only marginally; (3) change in the relative position of agriculture is likely to continue to be incremental, but more innovative change caused by unexpected events is possible; and (4) in the face of uncertainty, more flexible water management institutions to promote conservation and water transfers, while protecting equities, are advisable.
Two institutions spurred the growth of irrigated agriculture by delivering cheap water: the prior appropriation doctrine of water law and the federal reclamation program of the Bureau of Reclamation. As the water available for agriculture declines, the prior appropriation system of water rights can be expected to (1) aid the farmer who desires to profit from the sale of his water rights to other users; (2) compensate the farmer whose land and water is condemned against his wishes; (3) require the farmer to waste less water; (4) allow the farmer with junior rights to be displaced by senior rights, such as Indian water rights; and (5) provide a cause of action for the farmer whose water rights are impaired by one or more late-comer appropriators.
Irrigated acreage in the West has doubled since World War II, expanding increasingly away from the southern arid tier to the central and northern high plains states. The reclamation ethic appears to have crested, however, and the federal influence in water policy seems to be waning as the water management role of the states is waxing. Unexpected events, such as an unparalleled oil crisis or expanded famine, could alter current trends. Whatever the future holds, more flexible water management institutions are advisable for the welfare of all the water use sectors.
Agricultural growth in the West was spurred by legal-political institutions that delivered cheap water. Chief among those institutions were the prior appropriation doctrine and the federal reclamation program.
Early settlers had little incentive to commit capital and labor to construct water diversion and distribution systems if there were any risk of other users moving in upstream and leaving them high and dry. Therefore, western states developed the doctrine of "first in time, first in right". This law of prior appropriation allowed the first user on a stream to obtain a priority over all other subsequent users, and so on down the line. Prior appropriation facilitated western expansion and agricultural development because water could be parcelled out to a large number of irrigators, and priority dates signalled the extent of risk in situations of drought.
Even when existing streams were fully appropriated, agriculture continued to expand by augmenting supplies through the federal program to reclaim the arid and semiarid West. The 1902 National Reclamation Act codified the goal of making the deserts bloom, ushering in the developmental era of heavily subsidized, and increasingly centralized, large-scale irrigation projects. The Act, its amendments, and individual project authorizations provided the legal structure for long-term, interest-free financing based on "ability to pay", and further institutionalized the notion that unappropriated and undeveloped water was itself free, its only cost being the capital cost of constructing works and the subsequent operation and maintenance cost. The government's powers of eminent domain, navigation, and commerce were available for these projects constructed by the Bureau of Reclamation. The Bureau intercepted most major waterways in the West with a series of dams and diversions. Interbasin transfer projects were commonplace. The reclamation program spurred the creation of water districts (mostly public, special districts) as entities responsible for repayment, operation, and maintenance functions. Contract obligations were deferred in projects experiencing hardships. Areas with the most political power in Congress were generally benefitted first. In the post-World War I period, the public works ethos mitigated hard economic times and was further
- 53 -
institutionalized. Law was viewed as an instrument to harness the unruly forces of nature through public resolve, sweat, and engineering. Public hydroelectric power production was promoted as a major means of subsidizing irrigation water development.
Indian tribes were largely neglected by this reclamation process. In 1908, the United States Supreme Court held that water rights had been reserved to Indian tribes for their future use incidental to the creation of reservations. These so-called reserved water rights, unlike state-created appropriation rights, are not dependent upon use, and thus may be claimed at any time and are not lost by nonuse. For the most part, Indian water rights remain unquantified, pending court determination and/or Congressional action. However, tribes are becoming increasingly assertive in claiming large quantities of water. Were such claims to be honored, some present irrigationists would be affected, especially along streams such as the San Juan in New Mexico, which may already be over-committed.
With water demand pressing close upon water supply all over the West, and with few good prospects for increasing supply, there seems little alternative to a reallocation of existing supplies among new and established users. Since irrigated agriculture consumes between 80 and 90 percent of total water supplies in most western states, and since the value of water for crop production is ordinarily lower than for alternative uses such as energy, some agriculture is in the position of being bought out.
The relative position of agriculture with respect to water supply will now be explored from the perspective of legal and institutional history.
Water law in the West often comes in layers, ranging from the macro to the micro. If an international drainage is involved (like the Colorado, Rio Grande, and Columbia Rivers), a treaty normally governs the division of water between nations. If the water flows between states, an interstate compact (or possible litigation) apportions it. Within a particular state, the water laws (statutes, court rulings, and administrative decisions) define how individual property rights in water are created, exercised,
- 54 -
and protected, except to the extent that superior federal or Indian rights are involved (e.g., navigation servitude, "reserved" water rights, and federal eminent domain). Generally speaking, the international, national, and interstate laws make the broad allocations which determine "state entitlements"-the amounts of water which, when added to the water local to a state, are available for use within that particular state.
Agriculture can be affected by laws at all these levels, as a few references to the Colorado River Basin will illustrate. The U.S.-Mexican Water Treaty of 1944 contained no express provision for water quality. Highly saline irrigation drainage from the United States' side precipitated conflict in 1961, leading to U.S.-Mexican agreements and a United States salinity control program which together affect irrigation water management in the states of the Colorado River Basin. Two interstate compacts-the Colorado River Compact of 1922, and the Upper Colorado River Basin Compact of 1948-together control allocations between the upper and lower parts of the basin and between the seven states of the basin, subject to unresolved claims relating to federal and Indian "reserved" water rights. Because the flow of the river was overestimated in 1922, the upper basin's legal obligation to deliver water to the lower basin means that the upper basin has 1 to 2.25 MAF less each year than originally planned. That kind of shortfall raises the level of competition between agriculture and other uses.
The 1922 Colorado River Compact contains a pro-agricultural bias, declaring domestic and agricultural use to be superior to the generation of electricity. Both the 1922 and 1948 compacts preserve Indian water right claims which, when quantified, could displace or devalue the agricultural water rights of non-Indians. Federal authorization of the Central Arizona Project (CAP) conditions agricultural water delivery on reducing pumping, practicing conservation, and not irrigating new acreage. When the CAP comes on line several years from now, some California irrigation (which has been based on flow destined ultimately for Arizona) could be cut back.
With most of the federal reclamation projects in the western U.S. completed or authorized, state water laws provide the layer of legal rules that now most influence water availability for irrigation. Each state has its own water law system, although similarities exist across state lines. The state water law systems decide who gets how much for what uses. While mining predated irrigation in some of the western states, on the whole
- 55 -
irrigated agriculture has dominated the acquisition of water under the water right systems of the West since the early days of those systems. The water laws of the western states variously were initially designed or later shaped to promote, not limit, irrigation development.
Under the "riparian doctrine" which has prevailed from the outset in the humid eastern states, the right to use water from natural water courses is held by the owners of land adjacent to the water. The western states for the most part rejected the riparian approach, adopting the "prior appropriation doctrine" which allowed water to be diverted away from riparian land. (See map of surface water rights systems, Figure 2.1.)
The appropriation doctrine rests on two fundamental principles: (1) priority in time, and (2) beneficial use. The priority principle-first in time, first in right-allocates available water in times of shortage to those who first began their use of water from the source. Persons with the earliest priority may have their rights completely satisfied, while persons with the latest rights may receive no water at all.
This "first in time" rule is offset by three large exceptions. First, in most states, certain preferred users receive their full appropriation regardless of their priority. Preference is normally given to domestic and municipal uses and often to uses for agricultural purposes. Some states also provide a judicial mechanism through which preferred users may condemn the water rights of less preferred users. Second, appropriators may agree among themselves that during times of shortage the burden of the reduction in supply will be shared by a system of rotation or some other way. Third, sharing of shortage is often found in large projects where a number of irrigators share in the project's priority.
The term "beneficial use" is not subject to precise definition, but it generally includes two related, but somewhat different, concepts: social utility and engineering efficiency. That is, a use is beneficial if it involves some socially accepted purpose and if it makes a reasonably efficient use of water.
In the past most consumptive uses, particularly irrigation, have been considered beneficial. The types of uses socially accepted as beneficial uses have been increasing. Gradually, "instream" uses, such as the preservation of minimum flows to preserve fish, wildlife, and recreation values, which do not involve the "appropriation" of water, are becoming recognized as
- 56 -
- 57 -
beneficial uses. New energy-related uses, such as dewatering mines and slurrying coals, are being regarded as beneficial by most affected states, increasing the basis for competition and the justification for public regulation involving the exercise of broad administrative discretion in assessing trade-offs and balancing interests. Thus, beneficial use is a dynamic, not static, principle.
A person who wishes to divert water for a beneficial use must apply for a permit to a designated state agency. The typical scheme is generalized in Figure 2.2. Public notice is given and a hearing is offered to other right holders-sometimes to affected members of the public also-who object to the proposed diversion. The date of application usually determines the priority of the use.
The state will generally issue the permit if it determines that the proposed use will not interfere with existing uses ("nonimpairment"), that unappropriated water is available, and that the project is not otherwise contrary to the public interest.
Upon completion of the diversion and application of the water to a beneficial use, an appropriator must file proof of appropriation which, upon verification, is followed by the issuance of a certificate of a perfected right. This right extends only to the amount of water actually diverted and applied to a beneficial use, even if a larger quantity was originally intended. Under most irrigation uses of surface water, a significant portion of water applied returns to the watercourse as "return flow."
A purchaser of appropriation rights who merely continues the same use as his predecessor need only comply with local recording laws to perfect the right. An application for a new permit must be filed, however, if either a purchaser or the same owner intend to change the nature of the use, which may mean a change in the point of diversion or in the purpose or place of use. State approval helps to guarantee that the proposed change will not interfere to a greater extent than did the prior use with the existing rights of others, and that the new use is in the public interest.
The application process for proposed changes is similar to that followed for the initiation of new rights. Approval depends on a determination that other rights will not be impaired and that unappropriated water is available (in the event that the change of use is more consumptive than the prior use). Some states will not permit a transfer in the place of use if it involves the transport of water outside the watershed of origin or outside the state. And some states will not authorize a change in the type of
- 58 -
- 59 -
use where the prior use is preferred over that use which is to replace it.
With the prior appropriation doctrine thus described, the question arises: What relationship might exist between this prior appropriation system and diminished water for agriculture? The simple answer is that the system in most instances will (1) aid the farmer who desires to retire by selling his land and water profitably to nonfarmers; (2) compensate the farmer whose land and water is condemned against his wishes; (3) possibly reduce, under changing notions of conservation and "reasonableness," the amount of water the farmer has been diverting or consuming; (4) subordinate the farmer with junior rights to newly asserted senior rights, such as Indian water rights; and (5) provide a cause of action for the farmer whose water rights are impaired by one or more late-comer appropriators.
These results will occur in the following ways. Appropriative rights are quantified and, in most areas, marketable. (See Chapter 18.) Individual farmers and farming interests themselves will reduce the water available for agriculture by selling out at attractive prices to nonagricultural users, such as cities and energy companies. Appropriative rights are property rights; if they are condemned by a public agency or authorized utility, compensation must be paid. For the farmer who continues to exercise his appropriative right, he may find that changing legislative, judicial, or administrative notions of "reasonable use" and "public interest" require that he be more efficient in his water use, that is, use less water on the same acreage. In some cases, he may be allowed to use the water saved on expanded acreage, in which case no overall reduction in agricultural water occurs. If the farmer's priority date is later than that of an unexercised Indian water right, the initiation of the Indian water use can reduce or eliminate the farmer's supply. To the extent that he is the senior appropriator in time, however, competing junior uses cannot lawfully impair his right, although problems of proof and costs of enforcement place practical limits on this protection.
Because irrigated agriculture enjoys 80 to 90 percent of the water consumption market in the West pursuant to these vested property rights, it is in a position generally superior to other water competitors. Agriculture acquired permanent rights in the water, with the aid of public subsidy, in the formative days of settlement and water rights administration. Within limits, those rights are subject selectively to superior claims and to
- 60 -
redefinition in the public interest. For the most part, however, irrigated agriculture will bargain from a position of strength in the competitive arenas of water scarcity, even though not all individuals or interests in the agricultural community are benefitted or protected in the process.
Present indicators are that much of the decline in agricultural water supply in the West will result from dwindling groundwater resources in such overdraft areas as the multistate Ogallala Aquifer, central Arizona, and the San Joaquin Valley of California. Overdraft conditions have been permitted or countenanced by the groundwater legal systems of the affected states. Most groundwater basins are hydrologically connected to surface flows and ought not, from a management perspective, to be regarded apart from surface flows.
There are four principal legal systems governing groundwater acquisition in the western states: absolute ownership, reasonable use, correlative rights, and prior appropriation. We do not offer here exposition of the various state groundwater systems. (See Figure 2.3 for a map showing the diversity of approaches in the West.)
Some states have drawn geographic lines between those areas which are critical and those which are not. The definition of a "critical area" or "capacity use area" is generally an area in which the annual rate of withdrawal exceeds the average annual recharge (the common definition of groundwater mining) or threatens to do so.
The distinction between critical and noncritical areas may determine whether a proposed well is subject to regulation at all, or the degree of scrutiny the permit application will receive. In some cases, critical areas are subject to governance by local groundwater management districts. Also, critical areas may be controlled by express statutory prohibitions. Sometimes special protection or preference is given to groundwater service areas which are more expansive than just the land overlying the aquifer itself.
Many of the observations made earlier about the role the prior appropriation doctrine plays under declining water conditions apply to groundwater systems as well. Groundwater rights likewise are property rights; generally they are transferable and enforceable against impairment. To the extent that groundwater becomes more regulated, with more controls on the depletion of critical aquifers, it is probable that less water will be available to
- 61 -
- 62 -
overlying agriculture. It is likely, however, that the decline in groundwater for agriculture will be more attributable to rising pumping costs than to legal regulation.
The reclamation era of large-scale water resource development was dominated by the federal government. The sources of federal influence were the geographic scope of its jurisdiction, its financial resources, and its technical expertise residing in federal agencies. The development of numerous water projects up and down whole river basins spilled across state lines. Control naturally gravitated towards the federal level because the geographical reach of state boundaries was too limited. Moreover, water resource development projects were expensive, and required access to the federal treasury which is much less restricted than the coffers of the states. In addition, the manpower and technical expertise requirements of major water projects led to federal responsibility for large-scale construction. The Bureau of Reclamation, the Army Corps of Engineers, and the Soil Conservation Service had a continuing critical mass of engineers and water planners that no state could hope to maintain.
In what observers have termed classic distributive politics, federal agencies orchestrated blends of local and state interests in providing basic support for individual projects. Different project features lured different interests. Farmers were attracted by irrigation water, urban interests were promised water supplies and flood control, recreation groups appreciated lakes created by impoundments, and businessmen and bankers desired water project-generated economic growth. Agriculture was important in this coalition of interests because its demands could justify the development of large quantities of water. The rewards for agriculture's backing were long-term contracts for federal water at very reasonable rates, and agencies were generous to farmers in matters of eligibility. For instance, the 160-acre limitation was loosely applied by the Bureau of Reclamation. The role of the states in water development policy was to deliver a unified state congressional delegation in support of projects within state boundaries and the favorable testimony of governors and state agency officials. Mainly the federal piper called the tune in the 1950s and 1960s.
- 63 -
The 1970s witnessed the decline of federal construction agencies and the challenge to federal dominance of water policy. Because of the facts and forces already described, traditional water development patterns were severely disrupted. The number of new starts in water development projects declined, and the share of water agencies in the federal budget grew smaller. The Soil Conservation Service, the constituency of which was mainly agricultural, was brought to task for channelizations that destroyed fish and wildlife habitat. The Bureau of Reclamation, which once was the largest agency in the Department of the Interior, and in 1950 commanded 61 percent of the Department's budget, fell upon even more difficult times. Plans for large-scale construction, such as the two dams proposed for the Grand Canyon, were repeatedly defeated on economic and environmental grounds. In a symbolic act, meant to signal the end of the Bureau's mission of large-scale construction, the Carter Administration stripped the Agency of its name, and for a period of three years it was called the Water and Power Resources Service.
The failure of the Carter Administration to achieve its aims in water resources has been popularly recognized as a defeat for environmentalists, while the decline of the federal government's influence in water has received less notice. An important dimension of the water conflict lurked behind the headlines of the time-a struggle between the states and the federal government over their respective influence and roles in water allocation. Carter's "hit list," which zero-budgeted thirty-two projects, was a direct challenge to the states' growing determination to set their own priorities regarding water resources. The negative reaction from Congress and state houses was marked.
The second line of attack for water reform was a federal agency review of water policy which involved little state and local participation. The Carter Administration's issue and options documents which resulted from the agency review were coldly received by the states, especially the option of federal intrusion into water rights granted by individual states. In the end, most of the projects on the original hit list went forward, and a considerably watered down version of the new national water policy was adopted and then was implemented only partially. The new Secretary of Interior in the Reagan Administration dismantled the water policy machinery, including the Water Resources Council, and made it clear that he recognized water resources as primarily a matter of state rather than federal concern.
- 64 -
The lesson from these events is clear. Since the federal government can no longer afford to award large numbers of federally funded and constructed water development projects as prizes, its influence over water management is considerably weakened.
The events of the Carter years pointing toward an increase of state influence vis-a-vis the federal government have been reinforced by other forces. One such influence has come from the courts, which in the late 1970s landed some judicial blows on the notion of federal dominance. First the Court said that federal reserved water rights were more restricted than previously imagined. The attempt by the U.S. Department of Justice to expand the reserved water rights of national forests to protect instream water for fish and wildlife was rejected by the Supreme Court on the grounds that such federal claims infringed on the historic role of states in water allocation. Further, in a California case, the Supreme Court held that the federal government must follow the rules and regulations of the State in the operation of a project even though the project was federal.
Considerable constitutional power to affect water management is still lodged in the federal government, however, as the U.S. Supreme Court reminded us on the last day of its term in 1982 in Sporhase v. Nebraska (No. 81-613; July 2, 1982). This case held that the interstate movement of groundwater, as an article of commerce, cannot be restricted by states engaged in economic protectionism. The decision buttresses the free market and federal regulation (those estranged bedfellows of old), and undercuts states' rights. It is not likely, however, that the equitable and distributional values asserted by states will evaporate simply because there has been a judicial pronouncement. It would not be surprising to find the western states seeking federal legislation (congressional exercise of the commerce power) legitimating to the degree possible the states' efforts to control and manage water resources.
The capability of states to manage water resources has grown in the last couple of decades. The focus and reliance upon federal agencies during the reclamation era worked to stunt and distort the growth of state water planning agencies and policy-making structures. Up until the mid-1960s, the number of professional planners was quite small and there was little attempt at state water planning independent of federal plans. The picture is enormously changed in the 1980s. While legislative authorization for
- 65 -
addressing water resource planning is far from sufficient evidence of state capability, the presence of such mandates facilitates forceful state action. As Figure 2.4 illustrates, the types of legislative mandates given to states vary enormously, yet the map shows that most states provide for comprehensive water quantity planning, and in many cases this is combined with management, and/or water quality planning and/or management. While undoubtedly these structures were developed partly in response to the availability of federal grants-in-aid, agencies now represent a considerable pool of expertise and influence that is likely to survive, at least in part, even if federal monies are withdrawn.
The independent actions of individual states in relation to water resources both contribute to and are evidence of growing state influence. These actions are sometimes not consistent, indicating considerable differences in the priorities of different states. For instance, in 1977 the Montana legislature declared "the use of water for slurry to export coal from Montana is not a beneficial use." On the other hand, South Dakota determined to sell a share of the state's Missouri River water out of Oahe reservoir to an interstate coal-slurry pipeline company on terms that provided low-cost water to several towns along the pipeline route. Numbers of other states similarly are acting on the allocation, use, and preservation of state water resources. In 1982 the Governor of Wyoming proposed to the legislature that the state appropriate $100 million per year for six years to develop the state's water resources. In 1980 Arizona adopted a comprehensive new groundwater code aimed at bringing the state's depleted aquifers into a "safe-yield" situation by the year 2020.
Land irrigated for agriculture in the West has roughly doubled since World War II, and the addition of 25 million acres in the West has contributed heavily to American agriculture's 70 percent increase in crop production during the post-war years. A healthy chunk of this expansion has come from high production farming on arid lands, perhaps as much as 13 million acres, that are unsuitable for commercial agriculture without irrigation. The focus of growth in the initial phase, 1945-1954, was in the arid southern tier of states extending from Texas and Oklahoma
- 66 -
- 67 -
to California. Subsequently, increases in irrigated acreage have come from central and northern high plains states. Among the most important factors underlying this growth has been an abundance of relatively inexpensive water. While the accomplishments of the National Reclamation Act of 1902 that made the Great American Desert bloom have been striking, there are many signs, noted above, that the reclamation ethic has crested.
The decline of federal influence in water allocation has a mixed bag of consequences for irrigated agriculture. Clearly the closing of the option of developing large-scale additional supplies at the same time as demands are growing generates pressures upon the largest of the users of existing supplies. At the same time it is possible to question the extent to which agriculture ever controlled the flow of benefits from federal water projects. In the interests of gaining broad support, federal agencies regularly served numbers of other interests including urban users, energy, industry, and fish and wildlife at the expense of agriculture. A retrospective study of the Central Arizona Project indicates that in the thirty-three year history of negotiations, farmers were forced to make a number of compromises to save the project. The current project design will afford farmers far fewer benefits and more costs than if they could have continued to pump groundwater.
The change of emphasis at the federal level in the management of existing projects has important implications for agriculture. While the Carter and Reagan Administrations have differed enormously in their approaches to water resources, both have emphasized the principle that users should pay more nearly full costs. Irrigation interests are likely to be charged considerably more for water when long-term contracts for water at existing federal installations fall due. Whether or not the federal government will use the leverage it has for other purposes remains to be seen. With the support of the Reagan Administration, Congress has modified the 160 acre limitation to the point where it poses little or no problem to most agriculturalists. In the case of the Central Arizona Project the federal government appears to be making good on its trust obligations by influencing allocations to benefit Indian tribes. The future of federal support of Indian water rights is not at all clear, however. The Reagan Administration has favored negotiation rather than litigation in securing Indian water rights. The reserved water rights position of many tribes is legally very strong, and even without active federal government backing may fare well in the courts. Indian
- 68 -
victories in water allocation mean all junior users, including irrigated agriculture, stand to lose.
The shift of influence in water allocation towards the states raises the issue of the relative influence of agriculture in federal and state arenas. On the face of it, the structure of Congress would appear more favorable to agriculture than state legislatures. Rural farming states have the same number of votes in the Senate as do more urban and more populous states, while both bodies at the state level are apportioned on the principle of one man-one vote. Further, the influx of people into urban areas in many agricultural states, and the depopulation of the hinterlands, especially in the West, has resulted largely in urban populations. In Arizona, for instance, seventy-five percent of the population lives either in Phoenix or Tucson. Yet the preferences of legislative bodies are often different from what one might expect. In practice, the U.S. Senate has been more oriented toward urban interests than the House, because practically every Senator has at least one large urban area in his or her state. Further, the court ruling requiring apportionment of state legislatures on the basis of population has had less impact on the traditional rural bias of state legislatures than one might suppose. In many state legislatures agriculture has had influence far in excess of what the number of rural districts would suggest because urban areas lack cohesion and rural legislators often have skill, seniority, and command of formal positions.
The attitudes of state voters is likely to be important in determining how state governments will treat agriculture. While public opinion surveys on questions of water allocation are infrequent, those that have been reported should be reassuring to agricultural interests. A survey of voters in the four corners states of Arizona, New Mexico, Utah, and Colorado found more than 90 percent of respondents in favor of allocating more or the same amount of water to irrigated agriculture in the future. This support was strong even among urban residents.
Customers in the Salt River Project area were asked in another survey if as a conservation measure they favored or opposed raising the cost of water to farmers growing food and fiber. Eighty-three percent of respondents opposed such action, compared with 64 percent opposition to similar price increases for residential users and 54 percent opposition for business and industrial users. While such data cannot be construed as a reliable indicator of what urban users would do if they really had to choose between their own interests and those of agriculture in
- 69 -
water matters, those surveyed do testify to the reservoir of positive attitudes toward agriculture.
The policies pursued by some states in water allocation evidence similar basic concern for the welfare of agriculture. Henry Caulfield has written of the predilection of Colorado water leaders toward the development by the state and private entities of unappropriated water and surplus water from wet years to serve the energy industry and growing populations. This is viewed as much preferable to cutting back agriculture's share. The Arizona groundwater reform act does envision the reduction of agricultural consumption of water to a level of "conservation use" to be set by the State Department of Water Resources. At the same time, "grandfathered water rights" favor all existing water users at the expense of future users who are likely to be residential and industrial.
To summarize, the rise of states in the changing pattern of political influences is affecting irrigated agriculture, but there is much to suggest that the position of agriculture remains strong. State houses are likely to be as sympathetic to agriculturalists as were federal agencies that dominated water politics in the reclamation era. Particular pressures will be brought to bear upon agriculture because it historically has used large amounts of water and paid little, and demands of new water users must somehow be satisfied. At the same time it is reasonable to expect that state governments will do what they can to cushion the impact of water reallocation upon agriculture in the name of perpetuating the agricultural economy and preserving the rural lifestyle.
The discussion up to this point has assumed an incremental future. In a world where dominant events are often unforeseen, however, it is risky not to consider the unexpected. It is possible to imagine in passing a number of events that would thrust water once more into the national arena commanding federal attention. It is also possible to imagine that the devolution of power over water allocation from the federal government to the states might be more rapid than we anticipate.
Because water is so crucial an element in energy, agriculture, and economic productivity, it may be that a crisis in any of those
- 70 -
sectors would quickly put water on the national agenda. If our oil supplies were threatened again, more seriously than the Iranian oil embargo, as by a revolution in Saudi Arabia, unparalleled pressures would be brought to make the U.S. energy-independent. The federal government undoubtedly would have to take the lead in directing such domestic energy development. The record of private enterprise on synfuels in the past, even with healthy subsidies, does not warrant the expectation that the response of the private sector alone would be adequate. The energy industry by now is clearly skeptical of risking capital in synfuels development, as Exxon did in the oil shale boom. The federal government might well react to an energy crisis by causing large amounts of water to be shifted from agriculture to energy. It might be that states could bargain to protect agriculture, and the time necessary to get energy projects under way could be long enough that agriculture could outlast the crisis. Nonetheless, rapid federal energy development in a crisis situation bodes ill for farmers' retention of water.
On the other hand, an enlarged famine caused by crop failures abroad, in conjunction with the growing importance of agriculture in U.S. balance of payments, could help U.S. farmers. Expanding food crises could boost federal assistance to farms and raise farm prices. The already favorable public attitude toward irrigated agriculture in the West could be amplified. New federal projects that benefit agriculture might be authorized and funded. The authorization and funding of a large number of new projects, for agriculture as well as other purposes, could be spurred by an economic crisis prompting a New Deal type of public works response employing lots of people.
Other changes could be ushered in by a rapid rise in the interstate movement of water. As water comes to be treated more like any other commodity, and becomes more overtly commercialized, many private water rights could become transferable to the highest bidder across state lines, and interstate water compacts could be undercut. It is even possible that agribusinesses engaged in high-value production might be buyers in an interstate water market, although farmers as a whole more often would be sellers. Could equity considerations be protected in such a "free market" environment? Possibly, through either: (1) an Act of Congress and/or (2) state ownership (purchase/condemnation) of water rights to prevent uncontrolled operation of the private market. Would this not pose an identity crisis of significant proportions in the irrigated West? In order
- 71 -
to protect lower-value uses and the natural resource base of each state, a movement could arise to either "federalize" or "socialize" more of the water-alternatives foreign to the current political imagery of western states (although western settlement was partially subsidized by free land and water in the past). Agriculture's historical water rights granted by state governments could be profoundly altered by the emergence of an interstate water market.
Two scenarios in which states become more powerful more quickly than we envision here have been offered in a paper by Henry Caulfield. In the first, power and money is transferred from the federal government via "new" federalism. In the second, states seize the initiative on their own. The second scenario assumes states can determine their own values concerning water, and that they have or can develop the financial and technical capability. Under such conditions we would expect agriculture to fare reasonably well, as we have predicted, although we would not expect states to be equally favorable to farmers.
The support for continued agricultural use of large amounts of cheap water is high among state residents, even those in urban areas. Further, irrigated agriculture bargains in state arenas from a position of strength. State water law grants vested property rights to users with long-term, established records. Agriculture acquired permanent rights in water in the formative days of settlement, and those rights are subject to only limited redefinition in the public interest.
It is in the long-term interests of agriculture as well as other sectors to develop more flexible water institutions that facilitate conservation and water transfers. The lesson to be learned from the decline in supply solutions for water shortage is that water must be managed for reallocation to higher-value uses and waste needs to be reduced. Barring unexpected events, this will mean some reduction in irrigated agriculture in the arid regions. To a large extent this shift will probably be accomplished through the sale of water rights in the market. Transactions that move water out of irrigated agriculture will cause some negative externalities, such as social and environmental disruption. There may be ways to soften such impacts, however. Rural people may band together through water districts, corporations, or other
- 72 -
arrangements to direct the flow of water to purposes consistent with rural values and the need for rural employment. State governments may decide to enter markets themselves, buying water rights for equity, aesthetic, or fish and wildlife purposes.
The use of water that remains to agriculture, that is not sold or leased, will become more regulated. The Arizona Groundwater Act of 1980 devised a flexible groundwater right that is to diminish in quantity over time as conservation technology develops and conservation requirements under the law tighten. The concept of beneficial use, as we have indicated, can be used flexibly, and it is likely that in some states water uses tolerated in the past will be disallowed in the future as not in the public interest.
The lesson to be learned from the marginal decline in the influence of agriculture vis-a-vis other water users is that accommodation rather than outright opposition to modifications in water institutions is advisable for agriculture. Because irrigated agriculture is the largest water user, it is the obvious focus of policies aimed at stretching supplies. While agriculture's legal and political position remains strong, it nonetheless represents only a small percentage of the population in most states. In the final analysis, irrigated agriculture is likely to fare better if it is not perceived to be in direct conflict with other users.
There can be little disagreement with the fourfold thesis of this paper. (1) Even as one of the largest reclamation projects ever developed, the Central Arizona Project, nears completion, western water development inexorably is being replaced by water reallocation and management. (2) The relative position of agriculture is declining, though in different degrees among the western states. (3) In an overall sense, this change is gradual; but in specific areas it is and will be traumatic. (4) Depending upon how one defines the term, flexible water management to promote conservation and water transfer is, indeed, advisable. Whether it must be effected through "institutions," as opposed to incentives, legal requirements, or the free market, will be subject to debate.
Laws and public policy respond to the times. As more people compete for scarce resources, one of two things happens. If the free market is allowed to operate, the price of the commodity goes up, resulting in some measure of conservation. Alternatively, if the price goes too high, or if the owners of the resource are too politically weak, or if, for other reasons, policy makers deem it necessary or expedient to regulate the resource by exercise of police power, a nonmarket political redistribution of the resource may result. Such a result is inevitable if the regulation is stringent and pervasive enough to amount to a "taking" of the resource. Reallocation of the scarce water resources in the West is occurring through both operation of the market and newly-imposed regulation and management schemes.
What may most influence the allocation of our scarce water resource is the Indian water claim. This emerging problem calls for more discussion, because it could dwarf the difficulties heretofore encountered by competing non-Indian claims. In Arizona, for example, application of the "practicable irrigable" acreage test of Arizona v. California, 373 U.S. 546, 600 (1963), would result in allocation of the entire dependable water supply of the State to just one-third of the Indian tribes, leaving two-thirds of the tribes and all non-Indian Arizonans with nothing. No solution to this problem is yet evident. Congress has been unwilling to initiate any process for quantification of Indian claims, and the Tribes have been unwilling to cooperate in such quantification through the courts-especially in state-court McCarren Act proceedings. With the stakes as high as they are, it is quite possible that changes brought about by resolution of
- 75 -
Indian water claims will not be incremental and could be traumatic.
Even if it is assumed that Indian tribes which cannot use the large amounts of water claimed can and will sell part of their entitlement to non-Indians, recent expansion of Tribal "sovereignty" by the Supreme Court casts doubt on the extent to which non-Indians will do business with the Tribes. Since there is no practical way of resolving legal disputes with Indians (because of Tribal immunity in state and federal courts), it is doubtful that many entrepreneurs will place their operations and fortunes at risk on agreements to use Indian water.
Indian reserved water claims are, in short, much more significant than suggested in this paper.
In the section on state groundwater laws, several statements deserve comment. First, it is not necessarily true that most groundwater basins are hydrologically connected to surface flows. In Arizona, for example, most groundwater aquifers have no hydrological connection to surface flows. It is likewise incorrect to assume that, from a management perspective, surface flows ought to be treated with "flows" of groundwater.
Second, at least according to a recent pronouncement of the Arizona Supreme Court, it is not necessarily true, as the authors state, that "groundwater rights likewise are property rights . . . transferable and enforceable against impairment." Both the State Supreme Court and the Federal District Court in Arizona have now held that there is no constitutionally-protected property right in groundwater in one's land-that the doctrine of reasonable and beneficial use gives the landowner only a right to use, which can be regulated and taken by the state. This recent interpretation and the Supreme Court's validation of the comprehensive 1980 Groundwater Management Act also cast doubt on the authors' prediction that, in Arizona at least, ". . . the decline in groundwater for agriculture will be more attributable to rising pumping costs than to legal regulation."
These corrections are not meant to take issue with the validity of the paper's observations, only to point out that recent legislative and court actions in Arizona have changed the facts. Even though the doctrine of reasonable and beneficial use gives a landowner only the right to use, the authors are correct that that right has been characterized as a constitutionally protected property right. As to the statement that reductions would occur through increased pumping costs, the minority report to the State Commission which developed the Arizona law agreed with
- 76 -
the authors-that the natural market forces of price and increased pumping costs (due to lower water depths and higher gas and electric charges) had in fact reduced and would continue to reduce agricultural pumping without the necessity of a regulatory law designed to accomplish the same objective.
Two additions to the short discussion of the Arizona Groundwater Act are suggested. First, though "grandfathered rights" favor existing water users, the transformation of a prior common law right into a new state-regulated statutory right has diminished the value of the "right" considerably. Second, after 2006, the Act authorizes the State to purchase and retire agricultural lands if, in addition to other conservation measures, that action is necessary to achieve a balance between water consumption and supply in management areas.
Finally, it is difficult to argue with the last paragraph of the paper. However, that conclusion also reveals the difficulty of the challenge to agriculture. When "vested property rights" were, in the view of many in agriculture, eliminated by competitors in the State of Arizona, it is a significant challenge indeed for agriculture to portray its uses of water as not being in conflict with other users.
In conclusion, the paper substantially contributes to an understanding of the water problems facing agriculture. Its value would be enhanced by more discussion of two points. First, the changes already brought about and those predicted may pale in comparison to the accommodations which would be necessitated by full-scale application of the "practicable irrigable" test for federal reserved water claims on Indian reservations. Second, competition for water among non-Indians has already resulted in at least one state redefining the legal status of a right to use groundwater, with the result that agriculture's "vested property right" became a noncompensable state-regulated ability to use. Depending on how Indian claims are resolved, and on political conditions in other states, future changes in western agricultural water rights and uses could be dramatic.
Ordinarily the job of a discussant is an easy one, but this assignment has suddenly turned into a difficult task. Usually the discussant's plan of action is to challenge the premises of the paper, meet them head on, and engage in close combat. In this instance the search for the fatal flaw failed. The first reading disclosed only tiny chinks in the opponent's armor, and hope failed as the conclusion finally revealed the awful truth: I agree with practically everything said by the authors.
- 78 -
The authors end with predictions and forecasts, and even the unexpected and unanticipated is explored. Any prediction can be attacked as unrealistic. Yet my crystal ball seems no more free from cloudy spots, cracks, and distortions than theirs, and since I have lived long enough to see many of my own doom-sayings exposed as wrong, naive, and even foolish, I hesitate to claim any superiority as a seer. The most I will attempt is to throw a few more straws into the wind and see which direction they point-always remembering that a straw has two ends.
Some seem to fall crosswise. The paper identifies reserved Indian water rights as threats to present agriculture, but the sad fact is that while Indians have the best water rights in the West, they have the least water. On most reservations, substantial projects would be needed to translate the dry paper water rights into wet water in the ditches, and in my opinion there is small chance of obtaining federal funding for works that would take water from present users. The best hopes seem to be for joint water from present users. The best hopes seem to be for joint on-and-off reservation benefits similar to the on-going Central Utah Project, the proposed Yamkima scheme, and the still viable Papago settlement.
It is also possible that the era of federal agricultural subsidy may not be entirely over. Ogalalla aquifer underlying parts of seven high plains states has been overdrawn in Texas since the 1940s. Only two states on the fringes of the aquifer have recognized that irrigation use of this water is a mining process, and that when the water is exhausted (or fallen too deep) the overlying farmland must revert from irrigated crops back to dryland wheat or cattle grazing. Colorado and New Mexico have at least restricted pumping to ensure that farms could be amortized and that too-quick exhaustion would not bring bankruptcy before payout. Yet now that the "water mines" are nearing exhaustion, cries of help are heard, and the United States is investigating the possibilities of a massive rescue attempt by bringing water from the Missouri River and possibly the Sabine River. Initial guesses as to costs are tremendous, but so also can be the presures from seven Congressional delegations.
The authors see possibilities of another energy crisis that might lead to quick conversion of water from farms to fuel. A third crisis, however, may convince us that we have a long-term energy problem that requires a long-term solution. In that case, urban and rural support for the notion that new energy demands must be satisfied by finding new supplies of water can probably be counted on to continue. "Let them find their own water, not
- 79 -
take ours" could lead to more federal dams to store and make available the small amounts of unappropriated water left in many areas. Even in Montana, where unappropriated water still flows in the Missouri River and its principal tributary, the Yellowstone, the state's water reservation process sets aside all free flows and on-stream dam sites for future agriculture, leaving only expensive off-stream storage for energy.
Future federal rescue and energy projects would be enormously expensive subsidies to agriculture. Recognition of this has led to some tension in the states between throwing roadblocks in the path of energy and improving procedures for orderly market transactions. If states are to react responsibly to the need for an efficient economic transition from agricultural use to energy, they must enact better laws. The present systems designed to protect agriculture and prevent transfers still allow cash to talk and spotty unplanned transfers to appear. Current procedures protect priorities of other water users, but not farming neighborhoods and lifestyles. Wyoming made a start with a requirement for something like an economic impact statement to support a petition to approve a transfer, and still better devices could be employed. The states should find ways to internalize the effects of large transfers of farm water on local communities, districts, and economics. There is a need to institutionalize the water right, to make it more easily transferable. The states should find ways to encourage marginal water to move to industrial and municipal use; currently these users seek the earliest and best water rights. Another need is to find ways to encourage conservation to cut back present agricultural demand.
Most discussion of water management is either on a high moral plane or calls for tough regulation and imposition of expensive practices. There should be better incentives; the water user should reap where he has sowed, and he should not be asked or forced to spend his time and money for his neighbor's benefit.
The authors pose a possible interstate market in water rights, inspired by the recent Sporhase case that struck down Nebraska's curbs on the export of water from the state. Yet Sporhase itself called attention to another recent case, New England Power Company v. New Hampshire, which opens the door to Congressional reversal of Supreme Court decisions that prevent state interference with interstate commerce. Currently the Senate is struggling with a coal slurry pipeline bill (S.1844) that would do just that: permit states to impose conditions on energy companies exporting water as a transportation medium. Yet this brings in
- 80 -
another countervailing consideration. Midwestern Congressmen see the slurry pipeline (which would take water from the Missouri River) as the tip of an iceberg that threatens to sink navigation. An Iowa Congressman has introduced a bill (H.R.5278) that would prohibit a state from diverting water from an interstate basin unless all states in the basin agree-a move applauded by some from the Great Lakes states who fear an only slightly more remote threat. Since such legislation would undoubtedly mean the death of any more upstream interbasin diversions, the western states would be solid against it. A fair prediction on the outcome is that things will remain the same.
As the authors try to foresee the unforeseeable, they instance two scenarios by Henry Caulfield for state development of water. One is the "New Federalism" approach that would divide federal water development money among the states. The other is state capability to do a large part of it alone. As for the latter, California (with its rejection of the "Peripheral Canal") may have run out of patience with rescue projects, Arizona may have run out of water, Nevada out of land, and most of the others out of money. Perhaps the federal block grant is a possibility. If the states do go for a supply-side solution that creates a bigger pie for all, rather than cutting a slice for energy out of agriculture's share, will the problem and the conflict merely be escalated to a new level? If agricultural interests are as strong in the states as the authors suggest, it should be interesting to watch how big a slice of the new "energy water" they will try to take for themselves.