Arkansas - UNC - Inquiries into Buy and Dry_May2008

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provide for increased urban demand" and that as urban demands are met, "there will be tradeoffs and impacts on other users especially agriculture and the environment. " The allocation in SB07-122 makes concrete the Legislative intent to seek alternative forms of transfer which incur lower levels of adverse impact and to find more attractive tradeoffs, and to avoid permanent agricultural dry-up where appropriate. Based on SWSI's findings, Colorado Water Conservation Board (CWCB) came to three broad conclusions, one of which was: "Projects and planning processes needed to meet Colorado's future water needs must address transfers and development of water in a manner that meets multiple interests and needs. " In economic terms, this means reducing the problems of interests not currently or historically represented in the transfer process, often referred to as "externalities". Out of the initial SWSI report "SWSI 2" Technical Roundtables were created to further examine major issues. The Alternatives to Permanent Agricultural Dry-Up Technical Roundtable tentatively concluded (as of draft report for comment): "The trend toward reduction of irrigated agricultural lands in Colorado is significant due to the need for additional water supplies to meet urban population growth, but there are a number of other important factors which must be considered, including agricultural economics." This reflects the historic convergence of many stresses on agriculture, over the long term. These stresses may not be alleviated for long by the current ethanol subsidy and boom. The reliance on comparatively cheap feed to support the dwindling local livestock feeding and packing businesses on the Eastern Plains may, however, be disadvantageous as ethanol competition increases feed prices and reduces profits for feeders, while the very large meat-packers enjoy international flexibility. Increased sustainability based on thoughtful application of proceeds from new forms of water management may be critical for long-term viability in rural agricultural areas. Because urban needs are diverse (base demand, drought needs, dependence on non-renewable groundwater) alternatives to permanent agricultural transfer methods need to be diverse-and flexible. "One size will not fit all. " And it is also apparent that the suite of alternatives offers advantages over one or two of them alone for many potential users. Property rights must be preserved. "A key driver that influences how transfers are perceived and implemented relates to who retains ownership of the water (the agricultural user or the new end user) and what type of organizational/institutional structure is `best' to ensure equity for those involved in the transfer and those affected by the transfer. " The ownership assignment in long- term partnerships is essentially the assignment of appreciation in the value of the asset. A note on legal terms: The new forms of transfer are leases as opposed to sales, though one might also call them other things. In practical terms, the non-sale forms that offer the most attractive features will be either short-term leases in a water bank "spot market", or very long- term deals which offer security of interests in supply to municipal and industrial users. Because cities "sell a tap forever", the practical limit on water supply systems is usually the infrastructure, which will not last forever. New water under desirable long-term deals will be secure for many decades, and rational contractors will certainly include many terms relating to the options for renewal and renegotiation as often as the parties agree and at the end of the