The Economic and Environmental Benefits of Partial Leasing of Agricultural Water Rights

Balancing out‐of‐stream water demands and ecological instream flows is a difficult challenge in watershed‐scale management. Many watersheds already experience acute and chronic water shortages during average runoff years and may face more frequent and severe droughts in some locations due to climate...

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Bibliographic Details
Published in:Water resources research 2021-11, Vol.57 (11), p.n/a
Main Authors: Khanal, Rajendra, Brady, Michael P., Stöckle, Claudio O., Rajagopalan, Kirti, Yoder, Jonathan, Barber, Michael E.
Format: Article
Language:English
Subjects:
Climate change
consumptive use
Crop growth
Crop production
Crop water
Crops
CropSyst
Drought
drought mitigation
Econometric models
Economic analysis
Economic models
Economics
ecosystem services
Farms
Flow augmentation
Hydrology
Instream flow
instream flows
Irrigation
Irrigation water
Leasing
Rivers
Runoff
Stream discharge
Stream flow
Water availability
Water markets
Water rights
Water shortages
Water use
Watersheds
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Summary:Balancing out‐of‐stream water demands and ecological instream flows is a difficult challenge in watershed‐scale management. Many watersheds already experience acute and chronic water shortages during average runoff years and may face more frequent and severe droughts in some locations due to climate and demographic change. Water markets may mitigate the economic consequences of shortages, but their potential is limited by the prevalence of all‐or‐nothing irrigate‐or‐fallow crop water use strategies. Irrigation water generally provides diminishing returns for crop productivity, so it may be possible to reduce water application at the margin with only a small loss in crop production, creating water savings that could be leased for other uses. We explore this scenario by combining a crop growth and hydrology (CropSyst) model with an economic model of farm profits and water trading, and apply it to the Walla Walla Basin in Washington State. Our results suggest that partial leasing of water rights through a deficit‐irrigation strategy could economically benefit annual crop growers while meaningfully increasing water availability for stream flow augmentation. Key Points Facilitating partial‐leasing markets can create a win‐win situation for both agriculture and the environment A variety of deficit‐irrigation strategies can be explored for facilitating partial water‐leases Benefits of partial‐leasing markets provide justification for investments in better consumptive use measure and monitoring
ISSN:0043-1397
1944-7973
DOI:10.1029/2021WR029712