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Section 3 <br />Alternative Agricultural Water Transfer Methods to Traditional Purchase and Transfer <br />Table 3-10 An Evaluation of Reduced Agricultural Consumptive Use through Efficiency or Cropping Compared with Traditional <br />Agricultural Transfers <br />• "Creates" additional water • On farm efficiency usually • Buyer could pay • Raises water costs or reduces <br />for use reauires money net dollars to farmers <br />• Maintains agricultural • On farm efficiency must <br />production produce effective net <br />• Supports conservation and • Reduces cropping choice <br />efficiency and farming flexibiliiy and <br />• Farmer and buyer select <br />efficiency program <br />• Index CU, variable yield <br />• Measurement of yield • Careful monitoring vs. <br />historic use (legally and <br />administration) <br />• Potential disagreement over <br />efficiency technique/savings <br />• Reduces certainty for buyer, <br />flexibility for farmer <br />• Uncertain yield <br />• High administrative costs for <br />state <br />• Protection of yield • Change of use case • Uncertain yield <br />• Infrastructure investment • Higher transaction costs <br />Table 3-11 An Evaluation of Pu <br />• Simple transaction <br />• Works well in urbanizing <br />areas <br />• Irrigated agriculture <br />becomes temporary <br />• Eventually dry land unless <br />developed for other <br />purposes <br />with Traditional Aaricultural Transfers <br />• Long lead time for transfer <br />notification <br />• Easement to keep in open <br />space, dry land agriculture <br />• Reduces commitment to <br />agriculture long term <br />• Ultimately the land is likely to <br />be permanently dried up <br />• Allows farmer to continue <br />temporarily <br />3.9.5 Summary <br />Through an example of a rotational crop fallowing <br />program, this section responds to the key financial <br />subcommittee questions. As site specific conditions <br />change along with fallowing program stipulations, <br />these responses will also change somewhat. <br />The costs to organize and administer the example <br />fallowing program would be relatively modest by <br />water acquisition standards, probably less than <br />$500,000 for the rotational fallowing example. <br />Annual costs might run between $75,000 and <br />$125,000. The water buyer could pay the costs. <br />year. Under those circumstances, payments streams <br />are negotiable. <br />There are certainly regional and statewide benefits <br />to a rotational fallowing program including <br />preservation of agriculture, continued viability of <br />related businesses and farming communities, and <br />preservation of open space in a sustainable manner. <br />If rotational fallowing is a goal, and there are <br />statewide third party benefits, it may be possible to <br />garner statewide support for the program. <br />The amount required to pay a farmer as <br />compensation is usually based upon the average net <br />income per acre for the crop he or she has <br />traditionally grown along with reimbursement for <br />weed and erosion control costs and property taxes. <br />An incentive payment on top of this amount is <br />usually required. The incentive payment must be <br />sufficient to induce an adequate number of farmers <br />to participate in the program and may be more than <br />the base compensation rate. That incentive is very <br />3-32 FINAL DRAFT <br />