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Section 3 <br />Alternative Agricultural Water Transfer Methods to Traditional Purchase and Transfer <br />The benefits of the water banking transfer approach <br />include: <br />~ Water supplies are improved for users acquiring <br />water from the water bank and in a manner that <br />may offer more flexibility than other alternatives. <br />Moreover, agricultural use can be preserved by <br />allowing alternative uses on an interim basis, <br />without a permanent dry-up of irrigable lands. <br />~ Agricultural income can be increased short-term, <br />since the net income from a banking lease can <br />exceed the revenue that would be realized from <br />farming in a dry year. <br />~ Provides for flexibility in water management, as <br />there is a free market mechanism through which <br />water supplies can be transferred. This flexibility <br />may also help users meet unexpected demands. <br />~ Provides a means where either the seller or user <br />may secure investments inhigh-capital <br />technology (e.g., orchards and green houses) <br />where infrequent needs arise to maintain the <br />investment. Benefits may be realized by either <br />selling surplus water or purchasing needed water. <br />~ Assessed value of the land can be maintained at <br />an irrigated agricultural valuation for most, if not <br />all years. <br />There are several potential issues and conflicts <br />associated with water banking that may impede or <br />hinder the usefulness of this alternative as a tool for <br />meeting future water needs: <br />~ Water may not be available to be "withdrawn" <br />from the water bank when needed by M~eI, <br />recreational, or environmental interests. Banking <br />is voluntary, thus there is no guarantee or <br />requirement for anyone to deposit its water in a <br />bank for withdrawal by others. <br />~ Water banks often increase the transparency of a ~ Determination of transferable amount can be <br />water market within a defined supply/demand complicated and other water users must be <br />region. Water lease values are typically in the protected This is perhaps less complicated when <br />public domain offering more stability to the banking a senior storage right or a fully <br />marketplace. consumable groundwater right. <br />~ Water bank transactions can be defined as ~ A trading hub, such as a large regional reservoir <br />reversible. If a transferee realizes that following a and distribution/delivery system, is necessary to <br />water bank "purchase" the water is not needed, provide for storage and distribution of banked <br />the water can be re-deposited into the bank for water to a large, regional customer base. <br />others to withdraw. <br />FINAL DRAFT 3-17 <br />