California, an important part of United States of America is facing a humungous draught that is forcing the government authorities of US to make laws ensure a strict limit on water usage. They are also considering the expensive proposals to move water from one state to the other. There is no doubt about the fact that consideration of these new laws and proposal is necessary, but someone should take the responsibility of looking at the bigger picture and creating a more efficient backup plan on which everyone can trust.
This backup plan can only be created by considering the conditions of the water market of California. Despite the fact that 80 percent of the California’s water is used in agriculture, market inefficiency is sustained. California needs to come up with a very good plan to deal with this so that there can be a steady supply of water in this state. California can set an example for the other draught endangered States in the Southwest by fighting with this problem strongly.
In past, many places including California have not allowed the market forces to have a proper business of water by restricting the sale of water or by introducing various political and economical barriers. As a result, the water market is not properly used and is operating without clear pricing and rules.
In 1980s, Australia started using water markets and created a buzz around the world. Their method was so efficient that it made Australia a role model for the other countries of the world. According to their system, annual usage of water is estimated in such a way that it does not endanger the availability of water in future, then it is broken into certain limits for different users so that they can trade their share of water whenever they want. California can learn from Australia about the implementation of proper plans for water usage.
Whenever there is a problem of the draught in Australia, the flow of water in the market increases due to the trading of water. The farmers, who grow crops that are more dependent on the water, sell their rights to the farmers who grow crops like vines or trees that cannot be ploughed. This smooth system allows the transfer of water rights to be completed at ease. This trading can be done online. All the information including the date required to set proper prices and the records of the water rights are available online.
This system helped the farmers to stay financially healthy even in the drastic conditions of the draught. Also, the agricultural industry has stayed on its feet because of the water trading in pitiful conditions.
The farmers of California are also allowed to sell their water rights to other farmers of different cities. But, unlike Australia, the system is not supported strongly by the government as there is no common portal for the farmers to buy and sell their water rights. Although, new laws were made last year, and it is expected that the system will become more transparent after these laws are properly implemented.
If we look at the stats, from 2006 to 2010, a mere 3 percent of the water used was bought by the agricultural districts in US from California’s San Joaquin Valley. On the other hand, an estimate of 30 percent of the water used was traded in Australia.
Nevada, a neighboring state of California, also has a lot of issues regarding water rights. For instance, if a farmer is looking forward to selling his water rights then he must get many approvals from different agencies, not allowing the transaction process to finish in time.
Crossing the hurdle of problems is not going to be easy to California. There are groups and individuals who are against the water markets, and they consider it dangerous on the financial level because of the dependence of certain industries on farming of a certain crop. Many communities have made legitimate efforts to stop the sales of water in the market to protect their financial value and water supply.
There is a need for stronger rules which can be followed by everyone to make the water market and water right transaction process more efficient. Flexible laws are required to create an environment that encourages trading of water from state to state. This process is going to take a lot of time. Communities have to understand the water scarcity situation arising in the state, and they need to react in a proper manner.
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Arguably, the best way to deal with this scarcity of water is following the footsteps of Australia i.e. creating a more transparent system that will allow every farmer to sell his water rights to other farmers of different states smoothly and without any interruptions from government policies or community rights.