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Alternative Agricultural Water Transfer Methods -Grant Application Form <br />January 2008 <br />5. ProgramlProjectEualuation Criteria. Please describe how the proposed programlproject meets the following <br />evaluation criteria. The applicant should fully address and explain in detail how, and the extent to which, the <br />proposed project/program meets each of the criteria. <br />a) The proposed projectlprogram has the abilitylpotential to produce a reliable water supply that can be <br />administered by the State of Colorado, Division of Water Resources. <br />The concept and implementation of water leasing is a promising means of providing a reliable supply of <br />water needs on a temporaryor interruptible basis. This strategywill playa vital role inlong-term water <br />planning for the Colorado Front Range and engage the Colorado Division of Water Resources through <br />the State Engineer's authorization of future water transfers. Pritchett et al. (2008) reported in a survey <br />regarding attitudes towards water leasing that that 63% of interviewed farmers would be willing to <br />participate in rotational land fallowing programs. Given the sizable quantities of water controlled as <br />water rights through the Valley, adoption of this strategy has both the potential and ability to produce a <br />reliable water supply. <br />b) The proposed project/program produces information that is transferable and transparent to other users and <br />other areas of the state (i.e., would provide an example "template" or roadmap to others wishing to <br />explore alternate transfer methods). <br />The entire purpose of a demonstration project is exactly congruent with the goals of providing an <br />"example template," since the adoption and diffusion of programs such water leasing do require an <br />innovator to attempt the program first, thus serving as an example to future participants. The proposed <br />activities will allow farmers in other parts of the state to compare their financial gains and impacts from <br />leasing water and fallowing land from crop production for the 1, 2 and 3 year periods with those <br />produced in the Arkansas River Basin. <br />c) The proposed project/program addresses key water needs identified in SWSI or as identified in a basin's <br />needs assessment. <br />The Statewide Water Supply Initiative (SWSI) Phase I Report (published in 2004) identified M & <br />water demand projections for 2030. Water demand in the Arkansas Basin (including Pueblo and <br />Colorado Springs), for instance, was projected to increase by 98,000 acre-ft while the yield of <br />identified projects and processes (if fully implemented) was estimated at 80,900 acre-ft. Thus, the <br />water supply "Gap" looks to be about 17,100 acre-ft (17.4% of total demand). The Needs <br />Assessment Sub-Committee of the Arkansas Basin Roundtable recently completed a 2008 update to <br />the SWSI estimate, citing additional challenges in meeting demands. Agricultural water transfers <br />will certainly be a centerpiece strategy for addressing the shortfall between municipal water supply <br />and demand. <br />d) The proposed project/program advances the preservation of high value agricultural lands. Value can be <br />viewed as: the value of crops produced, the value the agriculture provides to the local community, and the <br />value the agricultural area provides for open space and wildlife habitat. <br />The projectwill advanceall ofthe aboveexamplesof agriculture land value. Primarily,this project <br />will quantify the income from leased waters that farmers could expect to reinvest in their <br />operations and continue to maintain a productive agricultural land base. By effectively giving the <br />shareholdersa new "crop" in the form of water, transfers provideadditional revenuetoimprove <br />the farming operation. Through agricultural water rights leasing, the economic stability of the <br />farming towns can bemaintained intheUalleybyaddinganeconomic boosttofarmerswhodo not <br />14