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<br />Water markets can mean an end to water shortages <br /> <br />age 13 of27 <br /> <br />from the Central Valley Project used 20 <br />percent less water and produced 20 percent <br />more output than did nearby growers who <br />received their water at no cost under senior <br />water rights (Zilberman, MacDougall and <br />Shah 1994, 130). <br />· From 1985 to 1995, the price of water <br />delivered to farmers in California's Westlands <br /> <br />Water Districtill rose from an average of <br />$16.25 per acre-foot to $58.11. This was also <br />a period when water supplies to the district <br />fell due to drought and environmental <br />regulations. Farmers responded by fallowing <br />all but their best lands, growing crops that <br />yielded higher returns, and installing drip <br />irrigation systems. Low-paying crops such as <br />safflower, barley, field corn, rice and <br />sorghum disappeared in favor of fruit and <br />vegetables such as tomatoes, lettuce, garlic, <br />onions, asparagus, melons, sweet corn, grapes <br />and almonds (Clemings 1996; Westlands <br />Water District 1994). <br /> <br />By motivating farmers to cut their consumption, <br />higher water prices would free up irrigation water <br />for municipal and other users. Transferring just 5 <br />percent of agricultural water to municipal uses <br />would meet the demands of urban areas in the <br />western United States for the next 25 years (Spencer <br />1992, 70). Higher water prices would also reduce <br />the demand to build costly supply projects and <br />delivery systems and would encourage private, <br />profit-making firms to enter the water supply <br />industry, taking the burden off the public treasury. <br /> <br />The Trend Toward Water Markets <br /> <br />"Higher prices dictated by water bureaucracies will <br />help us solve water problems, but the real solution <br />lies in unshackling water rights to allow more <br />trading. In a growing number of cases, markets are <br />being liberated from burdensome restrictions. <br /> <br />On the Farm <br /> <br />Irrigators have been trading water among <br />themselves for years, both formally and informally. <br />Many irrigation districts and mutual ditch <br /> <br />http://www . perc.org/publications/policyseries/priming_ full. php ?s=2 <br /> <br />11212006 <br />