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<br />Administrative. Institutional, and Structural Characteristics of an Active Wnter Market
<br />
<br />A potential source of interpretation error involves
<br />the applicants' typology. Types 1 (individuals, farms,
<br />ranches and cattle companies), 5 (developers) and
<br />7 (investment companies) were difficult to distinguish
<br />from each other because the NCWCD contract type is
<br />the same and the applicant names may not be explic-
<br />it, A related limitation is that only the immediate new
<br />use of water is reported, and not the long-term pur-
<br />pose of use, A consequence of these limitations is that
<br />the transactions involving developers (or speculative
<br />purchases) may have been underestimated.
<br />
<br />TRANSFERS AND MARKET COMPOSITION
<br />
<br />~
<br />
<br />Over the period from 1970 through 1993 there were
<br />2,698 approved transactions of C-BT water rights
<br />(allotments), Through these transactions, 104,895
<br />units of C-BT water were transferred to new owners
<br />for another use and/or for use at a different location,
<br />Given that the total number of C-BT units is 310,000,
<br />as much as one third of C-BT shares (project water)
<br />changed hands or type of use from 1970 to 1993. The
<br />number of transactions and quantity of water trans-
<br />ferred illustrates just how active the market for C-BT
<br />water has been over the last two decades. With all of
<br />this market activity, who is selling and who is buying
<br />these water rights? A closer examination of the mar-
<br />ket composition is insightful.
<br />As stated previously, agriculture is the single
<br />largest consumer of water in the west, Not surprising'
<br />Iy, the primary source of C-BT water that has been
<br />transferred since 1970 has been from the agricultural
<br />sector. More than 83 percent of the total number of
<br />units transferred were sold by individuals, farms,
<br />ranches, etc., where the water was being used in agri-
<br />cultural operations, The number of C-BT units trans-
<br />ferred by seller water use category from 1970 through
<br />1993 is shown in Figure 5,
<br />A noticeable quantity of water was also sold during
<br />two periods, in 1989 and 1990, and to a lesser extent
<br />around 1980, by a few municipalities that determined
<br />they had excess holdings of water rights, Although
<br />the supply of water right units in the C-BT market is
<br />concentrated in one user category, there are a large
<br />number of individual sellers and the market is not
<br />dominated by one or just a few individuals, This is an
<br />important factor in the type of market that will devel-
<br />r,p, A large number of individual sellers (and buyers)
<br />aids in the establishment of a competitive market.
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<br />6,000
<br />
<br />Number of C-BT Units Transferred
<br />
<br />6,000
<br />
<br />
<br />4,000
<br />
<br />2,000
<br />
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<br />1970 1975 1960 1965 1990
<br />DlndlY. & Farms IiiiIMuniclp. & Water Distr. _Industries E3QU'1er
<br />
<br />Figure 5. CBT Unit Transfers by Category of Seller
<br />
<br />The type of buyers of C-BT units were somewhat
<br />more evenly distributed among user categories as
<br />shown in Figure 6. C-BT water was purchased
<br />by municipalities, farmers, other land owners and
<br />industry, Municipalities as a group account for over
<br />52 percent of the total number of units transferred
<br />from 1970 through 1993. Somewhat surprisingly, the
<br />agricultural sector has been quite constant in its
<br />acquisitions, with the category of individuals, farms
<br />and ranches accounting for just under 28 percent of
<br />the total number of units purchased over this period,
<br />Another interesting finding is that purchases of agri-
<br />cultural origin were highest during periods with high
<br />prices, suggesting that irrigators not only played the
<br />role of suppliers, but also contributed to the demand
<br />for water rights, In other words, contrary to the lower
<br />values reported for water use in agriculture, higher
<br />prices did not stop agricultural purchases, This can be
<br />interpreted as support of the hypothesis that specula-
<br />tion plays an important role in the C-BT water trans-
<br />fer market. The industrial sector also purchased
<br />significant quantities of water in the 1970'5 and early
<br />1980'5, In particular, the 1971 peak in market activity
<br />appears to be due in large part to industrial demand,
<br />At this time, the Public Service Company of Colorado
<br />and Eastman Kodak were purchasing significant
<br />amounts of water.
<br />The distribution of C-BT seller-buyer transactions
<br />by user category is summarized in Figure 7, Transac-
<br />tions where water was transferred along with a piece
<br />of land are distinguished from other transactions on
<br />the graph because in this case water may not have
<br />been the main reason for the transaction, The average
<br />number of units per transaction varies significantly
<br />between seller-buyer categories. In sales between
<br />agricultural users the number of units transferred
<br />averaged 30,6 per transaction, Agriculture to domes-
<br />tic use transaction quantities were only slightly
<br />
<br />979
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<br />WATER RESOURCES BULLETIN
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