This website was developed in part with a
grant provided through the U.S.D.A.'s Fund for Rural America. In addition, information and
data posted at this website were developed in part through a grant provided by the U.S.
Bureau of Reclamation. These two grants are the basis of the website's development.
The grant from the Fund for Rural America was
designed to develop a prototype regional business reporting service for
irrigation enterprises. The term "irrigation enterprises" is used
to describe irrigation districts and mutual ditch and irrigation companies. The business
reporting service includes a quarterly business trade magazine. A prototype of this magazine is provided here for review. Plans are to
link this website and the quarterly magazine into one cooperative enterprise.
The grant from the U.S. Bureau of Reclamation
was designed to investigate and evaluate trends in the financial status, day-to-day
business practices and overall management conditions of irrigation enterprises in the
intermountain region. This region comprises the states of Colorado, Idaho, New Mexico,
Utah and Wyoming (Figure 1). The region is of
particular interest because of its rapid urbanization, and the effect it is having on
prime irrigated lands. The Reclamation grant was titled "The Irrigation Enterprise
Management Practice Study," or IEMPS.
The Reclamation grant was designed to develop
data that might assist regional irrigation districts and canal companies in better
assessing their current business position, given the changes occurring in the region. The
grant was also designed to provide Reclamation with timely information on issues and
problems faced by these enterprises. It was designed to craft new and productive
relationships with these enterprises while meeting new policy objectives outlined in
Reclamation's 1997 Strategic Plan.
During the three years of IEMPS activity beginning
in 1996, sixty (60) irrigation districts and canal companies were contacted. After careful
consideration of possible costs and benefits to participating with IEMPS, thirty-six (36)
enterprises agreed to provide detailed information on their assets, liabilities, operating
revenues and expenditures for the last five decades. Fourteen (14) enterprises provided
very complete records for every fifth year, beginning in 1945, while others were able to
provide similar records for 1970 to 1995. In addition, all participating enterprises
provided an assortment of business and water management information on their operation
from 1970 to the present.
Information on water rate structures, number of
employees, water ordering and canal management, and other day-to-day business practices
were shared with the IEMPS research team. Participating enterprises had some
concerns about the purposes of the research. However, their overall cooperation with IEMPS
was excellent, and we deeply appreciate their interest in the study.
Irrigation Enterprises in the Intermountain Region
The intermountain region is atypical in that
both types of enterprises (irrigation districts and mutual ditch and irrigation companies)
tend to be smaller operations, compared to similar entities found in West Coast states.
Business operations, water rights, and even Reclamation contracts with irrigation
districts tend to differ appreciably in the intermountain region. Although many canal
companies have their origins in Carey Act (1894) contracts, most are truly independent
operations and have minimal connection with Reclamation projects today. Canal companies
deliver most of the water to irrigated farms in the intermountain region, although
irrigation districts are important too.
Many of the irrigation districts participating
in IEMPS were some of the earliest enterprises formed under Public Law 161 (1902)
establishing the U.S. Bureau of Reclamation (Reclamation) and its revolving construction
fund. The vast majority of canal companies in the region were organized before the
turn-of-the-century. There is considerable variation in irrigation enterprise business
practices within the region. Intermountain enterprises under Reclamation projects, as well
as those outside of such projects, often challenge many of the assumptions and conclusions
reached in recent years regarding the benefit/cost justifications for irrigated
agricultural development in the West. We simply do not find these enterprises to be
examples of wasteful federal expenditures. The results of IEMPS are hopefully a challenge
to those who might quickly dismiss the benefits of Reclamation projects, aside from their
obvious role in settling the West.
Irrigation Enterprises and Federal Policy
Although traditional water law continues to evolve and to support new
interpretations of water rights, such as the riparian doctrine, working through the prior
appropriation doctrine often appears the best and quickest way to improve regional water
usage. The intermountain region is characterized by a very strict interpretation of this
doctrine. Not only does this affect water conservation, but the reallocation of water to
alternative uses through voluntary transfers/exchanges and markets to meet anticipated
municipal and industrial uses, as well as environmental needs.
Most new ideas advanced to improve water conservation appear to involve
the participation of irrigation enterprises in one way or another. However, it is unlikely
this participation will be forthcoming if attempts are made to change the legal doctrine.
In stating this, we are not attempting to advocate the prior appropriation doctrine. It is
only being suggested that it may be more practical to work within the existing legal
framework to achieve water conservation and environmental goals. This remains to be
evaluated over the next decade.
Irrigation districts and canal companies still manage the vast majority
of water supplies in the West. However, they do more than this. They are at once a form of
local governing entity designed to manage common property resources (e.g., dams and
reservoirs, river diversions, irrigation canals, and frequently even farm headgates). At
the same time, they are business enterprises designed to manage these resources.
Frequently they have larger staffs of employees and more service equipment than most
businesses in the small communities where they are found. The water resource expertise
they bring to resolving local environmental issues often appears much greater than federal
agencies can mobilize.
One may argue that irrigation enterprises are special interest groups.
They are special interest groups, but, importantly, they are "grass-roots"
special interest groups. People have come together in good faith to organize these
enterprises to serve local community needs. They are for the most part directed by
dedicated people. Millions of dollars of hard-earned farm income has gone into developing
and financing these enterprises over the years. They represent a very important aspect of
regional rural social life as well as being essential to water management and irrigated
agriculture.
Many of these enterprises are opposed to aggressive approaches to water
markets, transfers and exchanges because these activities often impose potentially severe
and unforseen externalities on their water supplies and water rights, business operations
and even the local ecology they have been responsible for developing over the years. IEMPS
observed that water markets can be viewed favorably by representatives of these
enterprises, if such markets function to place non-agricultural water needs under the same
investment strategy these enterprises have become accustomed to over the years. These
enterprises do not appear to be opposed to federal agencies and local groups acquiring
water from them through local markets, but they are very much opposed to these same groups
arguing that they have claim to such water in the name of redressing oversights made in
the past. These enterprises are particularly troubled by those who would argue that market
principles are good, but who would use government power at the same time to advance
federal claims to water, and who generally oppose the prior appropriation doctrine.
It often appears that neither water laws nor traditional water
institutions are the obstacles to conservation and reallocation, but rather the unknown
economic costs and consequences associated with "laissez-faire" water markets.
Farmers continue to be fearful of the potentially negative repercussions of water markets.
At the same time, many questions cannot be answered by water market specialists. The
evaluation of "costs" often cannot be made simply because there is not enough
valid social and economic information and experience with these institutional methods to
evaluate them properly. We believe that such assessments are needed. It will require more
detailed knowledge about how irrigation enterprises might profitably benefit from these
policies, most assuredly in a way that strengthens their overall business position.
Download
the document "Website_Introduction" from our FTP site
(Document includes additional sections on the study sample, and the assumptions the IEMPS
challenges)
