September 2015 Bar Bulletin
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September 2015 Bar Bulletin

Irrigation and Drought in the Northwest and the Potential for Market-Based Reallocation of Water To Protect High-Value Crops

By Douglas MacDougal


(First of Two Parts)

Drought in Oregon in 2015 ranges from abnormally dry to extreme. As of June 1, Oregon Gov. Kate Brown declared drought emergencies for 15 Oregon counties. Some areas of the state are experiencing temperatures higher than historic records. This follows the second warmest winter on record, where much of the precipitation fell as rain rather than snow.1 The lack of snow has severely impacted stream flows.2

Streamflow forecasts for areas east of the Cascades are from a tenth to one-half of average for the summer season; and from 30 to 60 percent of average on the west side of the Cascades.3 The situation is likewise grim in Washington: almost 70 percent of Washington's rivers and streams are running at below 10 percent of normal flows.4 As a result of these conditions, regulation of water is occurring throughout the region, though different areas are experiencing different levels of severity.

With droughts come the inevitable, mandatory cutbacks in water use, and the painful, well-publicized stories of hardship to people, animals and crops. Such episodes usually force even greater efforts to conserve water, particularly in the agricultural sector, which struggles mightily to preserve crop health in such times, and among irrigation districts, which manage most of the irrigation water.

Not all crops are equal, and it is surprising to some that across-the-board curtailments can be devastating to some high-value crops and relatively painless to others. Water shortages, and the prospect of potentially severe cutbacks in the future, have also stimulated creative thinking about how the effects of curtailment can be more sensibly "reallocated" among crops by market mechanisms. This article will discuss some of those creative market mechanisms.

Because most of the water rights in the region are held in irrigation, affecting thousands of acres of land, this article will look at irrigation district responses to the drought, focusing on selected examples from Oregon, and how the economic impacts of curtailment on water district patrons could likely be ameliorated in some cases by transactional approaches potentially more sensitive to the economic impacts of curtailment.5

A few case studies illustrate how such approaches might work. These actions are largely experimental but they offer promising alternatives to the traditional, "blanket" curtailment approach. To understand the difference, this article briefly explains each approach.

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