Feds are putting a price tag on water in the Colorado River basin to spur farmers to conserve
The federal government is designating $4 billion from the Inflation Reduction Act for drought mitigation work in the Colorado River basin.
On Wednesday, the Department of the Interior announced that total, indicating that $500 million will go to efficiency upgrades in the river’s Upper Basin states of Colorado, Utah, New Mexico, and Wyoming. Another chunk of IRA money will be set aside for direct payments to farmers and ranchers to forgo water deliveries from Lake Mead in the river’s Lower Basin, primarily in Arizona and California. Federal officials are not specifying how much money will be available for that first round of payments.
The funding represents a rare infusion of federal money for a climate change-fueled crisis that is plaguing the Southwest’s water supply. About 40 million people rely on water from the Colorado River, which is being strained by warming temperatures and steady demand. Colorado River governance is typically left to the states, which have historically produced stopgap measures to avoid catastrophe, but have failed to conserve enough water to prop up the river’s biggest reservoirs. Over the summer, talks among the states turned to interstate finger pointing.
“It's a big deal, but I think it's only a big deal if we make this $4 billion count,” said Alex Funk, director of water resources at the Theodore Roosevelt Conservation partnership. The group receives funding from the Walton Family Foundation, which also funds a portion of KUNC's Colorado River coverage. “Crystal balling here a little bit, I don't think we're going to see something of this scale of an investment to address this problem again anytime soon.”
Water policy experts often point to “buy and dry” or fallowing programs as an important step in freeing up water for the parched region. Nearly 80% of the Colorado River’s water is used by the agriculture sector, and paying growers to temporarily fallow their fields would allow water managers to leave more in reservoirs, where dropping levels have served as visual barometers for the river’s rapid drying. But farm groups warn that if fallowing is done too rapidly or haphazardly, rural economies throughout the region will suffer.
The IRA funding will be used for a “system conservation” program in which growers can apply for federal payouts. The federal government will pay $330 per acre-foot for a one-year agreement with a grower, $365 per acre-foot for two years, and $400 for a three year commitment. The first opening for proposals began Wednesday and will last until Nov. 22.
The Bureau of Reclamation, the federal agency which operates major dams and reservoirs around the basin, said applicants should include a description of their fallowing plans, the amount of water they’d be conserving, and a plan to measure and document the amount they’re cutting back.
Reclamation previously tested system conservation efforts in a pilot program that ran from 2014 to 2019 in which farmers were paid to forgo some water. Wednesday’s announcement marks the first return to large-scale water buybacks since. Earlier this year, states in the river’s Upper Basin urged the federal government to revive system conservation work.
Water freed up from Lower Basin farms would remain in Lake Mead, where record-low water levels are still dropping, threatening the ability to generate hydropower at the Hoover Dam.
Some experts have raised concern about the relatively low price tag on payouts to growers.
“I think a big question mark will be, how much interest does that garner, given the demand for water and the price of water and what other numbers we've seen,” Funk said.
John Boelts, owner of a fruit and vegetable farm in Yuma, Arizona, said he’s seen estimates that price an acre-foot of water at $1,200 to $2,200, so the federal payouts might not be big enough to convince farmers to forfeit some of their water.
“That's giving up that economic opportunity that we have, and a senior right to many other users on the system, to then store that water for the greater good,” Boelts said. “There should be some commensurate economic incentive.”
A group of farmers near Yuma recently proposed a water conservation plan in which they would be paid about $1500 per acre-foot of water saved, according to Axios.
Boelts called the program a “start in the right direction,” but said he doubts that new federal payments will be enough for farmers in his circles.
“That's a shame,” he said, “because we really do need to come up with a program – a multi-year program – that people in agriculture can plan on and rely on and work through year after year.”
While federal officials have yet to release a specific dollar amount for system conservation in the lower basin, they have set aside $500 million for efficiency upgrades in the river’s Upper Basin states. That could include re-lining canals to prevent water from seeping into the ground, and the removal of ornamental and non-functional turf grass that only serves an aesthetic purpose. But federal officials have yet to detail how that money will be spent.
A second component of the federal program will accept proposals for additional water conservation and efficiency projects that “could involve a variety of pricing options.” A third component, beginning in early 2023, will solicit proposals for long-term system efficiency improvements that will result in multi-year system conservation, according to an Interior Department press release.
Recent water conservation moves come on the heels of a tense summer, in which federal authorities called on states to conserve 2-4 million acre-feet of water, but states were unable to reach a deal to conserve that much before a federal deadline.
Both programs join the raft of multi-state agreements and emergency conservation measures that appear designed to stave off catastrophe before 2026. Existing guidelines for water use in the Colorado River basin are set to expire that year, and states will have to agree on new rules for divvying up the shrinking river before then.
This story is part of ongoing coverage of the Colorado River, produced by KUNC in Colorado and supported by the Walton Family Foundation. KUNC is solely responsible for its editorial coverage.