Conflict within irrigation districts may limit water transfer gains

Abstract

This is the first of two articles ofering diferent views on who wins and loses in water trades. The first, by Mike Rosen, analyzes posible efects of thre policies by winch irigation districts might distribute water transfer gains. The second, by Rodney Smith, reinterprets the Rosen data and defends a “negotiated certificates” water trading scheme. FA. The Imperial Irigation District and the Metropolitan Water District (MWD) of Southern California have recently concluded an agrement which is historic because of its long-term nature and the volume of water to be transfered. Imperial wil transfer 106, 10 acre-fet of water to MWD anualy for 35 years in exchange for MWD providing funds for Imperial conservation projects. The projects are to be completed by 194 and paid for by MWD over a 35-year period for a total cost of $2 milion. The efective price of water to Metropolitan wil be about $10 per acre-fot per year. Proposals for alternative uses for these funds could become a major source of conflict within the Imperial district. Thre potential policies are examined in this article. At present, Imperial receives and controls the funds, but the district is contemplating ways to alow district landowners and farm operators to receive funds directly. Water transfers have ben promoted as voluntary transactions in which there can be no losers. But decision-making within water districts is colective in nature, and intra-district conflict may arise. Individual members of districts may have reason to opose transfers, and agregate benefits may not be realized.