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Section 3 Alternative Agricultural Water Transfer Methods to Traditional Purchase and Transfer SWSI concluded that within the foreseeable future significant water supplies would likely shift from present-day agricultural use to uses linked to both municipal and industrial (M~eI) demands and possibly environmental and recreational needs. In the South Platte, Arkansas, and Rio Grande Basins, there are also projected to be substantial reductions in irrigated acreage due to insufficient supplies for augmentation of agricultural irrigation well pumping. The 2004 SWSI Report identified that numerous M~SCI providers and self-supplied industrial (SSI) users currently include agricultural transfers as a key component to their future water supply needs. In some basins the largest agricultural transfers may occur as a result of satisfying the estimated 2030 M~SCI demands. It is apparent that substantial future M~eI supplies will come from current agricultural uses (i.e., irrigation) to the extent we are unable or unwilling to develop our remaining supplies of unappropriated water. their water supply system as well as establishing areas for open space, trails, parks, wildlife habitat, or other uses within and between communities. These alternatives may facilitate the ability for some irrigated agriculture to remain active among and between existing and future municipal boundaries. It is recognized that exploring "transfer" alternatives that are not entirely market driven raises questions not easily answered. Such questions run the spectrum from quantifying the 'quality of life' some equate to having local irrigated agriculture to the concerns for interfering with property rights, the market price of water, and the future plans of local water providers for meeting their future water needs. It is further recognized that alternatives that deviate from traditional approaches may likely be more costly and have a broader array of beneficiaries. As a result a conventional cost-benefit analysis is difficult. There may be circumstances where alternatives to traditional agricultural water transfers may be advantageous to all parties to the transfer and provide community or other third party benefits. Such alternatives to traditional water purchases may allow more rural areas that are heavily reliant on an agricultural economy to remain economically viable while providing water in some or all years for other uses. Alternatives to traditional agricultural transfers may also present opportunities for local governments desiring to increase the reliability of It is not the intent to interfere with or criticize traditional transfers of agricultural waters since these are a property right and, as outlined in the SWSI Report, are needed to meet the 2030 M~SCI water needs. It is the intent, however, to illustrate how and when alternatives to traditional agricultural transfers may present benefits to not only the parties to the transfer, but other third party beneficiaries. While any transfer method is likely to reduce agricultural production (yield or number of irrigated acres), exploration, and implementation of alternative transfer methods may lessen the effect of the transfer within a defined geographic location and may help sustain agriculture by providing additional revenue sources to the agricultural user. The alternatives defined by the TRT include: 1. Interruptible supply agreements. 2. Long-term rotational fallowing. 3. Water banks. 4. Reduced agricultural consumptive use through efficiency or cropping while maintaining historic return flows. 5. Purchase by end user with leaseback under defined conditions. 3-2 FINAL DRAFT