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<br />higher with an average of 38 units per transaction,
<br />Although only accounting for about five percen t of the
<br />total number of transactions, agriculture to industry
<br />transfers were larger with an average of 90.2 units
<br />per transaction,
<br />
<br />Number at C.BT Units Transferred
<br />8,000 1
<br />
<br />6.000 -\-
<br />
<br />4,000
<br />
<br />
<br />2,000
<br />
<br />o
<br />15170 1975 1980 1985 1990
<br />
<br />Dlndfv..Farm & In: Co. _Banks. Insurance Co. DOttIer land Owners
<br />
<br />I.1IMunlclp.. Wlltsr Olstr. ~Industrles
<br />
<br />Figure 6. CBT Unit Tra.nsfers by Category or BuyeT.
<br />
<br />Number otTransactlons
<br />1.400 j
<br />1.200 -I- '
<br />J
<br />1,000 '
<br />800
<br />800
<br />400
<br />200
<br />o
<br />
<br />Units Transferred (thousands)
<br />
<br />.." "t:
<br />, ' , , f50
<br />.." 40
<br />, ,'30
<br />, r 20
<br />- + 10
<br />, 0
<br />
<br />
<br />AgfoAg AgtoD Agtel OtCJAg CloD Other
<br />DWater transferred along with land
<br />EaNumber of transactions DUnits transferred
<br />
<br />Figure 7. Distribution of Number ofTrans8ctions and Units
<br />Transferred by SeneI' and Buyer Category.
<br />
<br />Noles: Ag to Ag- Scllcrlbuycr transfer from agricultural use to
<br />agricultural Use.
<br />Ag to D - Sellerlbuyer lra.n~fcr from agricultural use to
<br />domeijtidmunicipal use.
<br />Ag to I - Sellerlbuyer transfer from agricultural use to
<br />)ndustna\ use.
<br />D to Ag - Scllerlbuyt'T trnnsfer rrom domestic use to
<br />agricultural use.
<br />D to D - Sellcrlbuycr transfer from dom~gtic use to
<br />agricultural use.
<br />Other - Any other combination of type of use transfer.
<br />
<br />Although transfers of water from agriculture to
<br />other sectors are more noticeable and more widely
<br />discussed, a significant portion of traded irrigation
<br />water is put back to the same use, Again, only the
<br />
<br />---~...... ....................., ,.....,.."r-(" nil! I CTIr-.,1
<br />
<br />'J
<br />
<br />~,
<br />
<br />Michelsen
<br />
<br />immediate new use of water is reported for each
<br />transaction, and not the long,term purpose of use
<br />which sometimes reflects the real motivation for the
<br />investment. For example, a developer planning a
<br />future housing project may purchase water (and per-
<br />haps land) for this particular project, but will lease
<br />the water back for irrigation use until needed (also
<br />meeting the requirements for beneficial use), It is not
<br />until the water is transferred to a municipality that
<br />the true motivation of the first transaction appears in
<br />this data set. Nonetheless, this limitation should not
<br />be over-emphasized. Given the high level of market
<br />activity in the NCWCD, even farmers have been buy-
<br />ing C-BT shares and selling them a few years later,
<br />buying again and so on, In several ways, this is a
<br />well-functioning market which gives rise to a certain
<br />level of opportunistic behavior among market partici- "
<br />pants. Therefore, the most accurate picture available
<br />is the one which considers the immediate changes of I
<br />use for water, t
<br />To summarize, the C-BT market is characterized by [
<br />many different sellers and purchasers of water rights, I
<br />with no single individual or entity dominating the I
<br />market, The large number of individual sellers and '
<br />purchasers helps to make the C-BT market competi-
<br />tive and distinguishes it from some of the other, less I
<br />developed, markets where one or just a few sellers or 1
<br />buyers dominate in most of the transactions.
<br />
<br />SUMMARY AND CONCLUSIONS
<br />
<br />980
<br />
<br />Voluntary water markets have been advocated by I
<br />many diverse groups as a means to reallocate scarce
<br />water supplies in the semi-arid western U.S, f
<br />Although individual transfe.rs of perma~ent water ;,
<br />nghts have occurred almost SInce the creatIOn of pnor j'
<br />appropriation laws over a century ago, water markets '
<br />have been very slow to develop and are few in num' ~
<br />ber, The market for Colorado-Big Thompson water '
<br />rights is recognized as one of the most well estab. ~
<br />lished and successful water right markets in terms of ~
<br />transaction activity, infrastructure, and the number J
<br />and variety of participants, ~
<br />Development of any market requires well defined ~
<br />property rights to establish clear ownership and, in k
<br />the case of water, supply reliability or assurance that ~,'
<br />the water purchased will actually be delivered, C-BT ~
<br />water rights consist of equal shares or allotments of I
<br />the project's annual available supply. The perpetual
<br />rights represented by these allotments are clearly
<br />defined and widely understood by users. Each allot-
<br />ment is homogeneous in terms of allocation priority
<br />and quantity of water delivered, In other words, pur'l
<br />chasers know what they are buying - there is no "pig I
<br />
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