Super Ditch: ICS Examines a Buy-and-Dry Alternative

Super Ditch: ICS Examines a Buy-and-Dry Alternative

ICS Principal Scott Campbell penned, “Super Ditch,” the fall cover story in Lincoln Institute of Land Policy’s quarterly publication, Land Lines. In it, he explores the launch of the Super Ditch, a corporation designed to become a lease agent for farmers looking to protect agricultural water supplies from municipal acquisitions by leveraging water’s value as an annual cash crop—temporarily leasing it to cities in a rotational fallowing program rather than selling it outright.

In river basins across the American West, where every drop of water is owned and accounted for and no water is available for new uses, cities are buying agricultural water rights in order to supply water to growing populations. These are voluntary economic transactions, frequently negotiated with retiring farmers hundreds of miles from city centers. But when farm communities lose a critical mass of water to municipal sales, economic collapse can ensue; and remaining farms and businesses are sometimes no longer viable. The Super Ditch, a corporation serving eight mutual irrigation ditches across Colorado’s Lower Arkansas River Valley, in an effort to eliminate this zero-sum game, is conducting an experiment that allows farmers to pool supplies from rotationally fallowed fields, rest those fields every one-in-ten years (a good soil management practice), and lease the pooled supplies to cities. This brings cash to the farmer and water to the city, while creating a “buy-and-dry” alternative. (Buy-and-dry refers to municipal water appropriations practices where cities buy interests in farm properties, then fallow those farms to divert the water for municipal use.)

The Colorado project, which is in pilot phase, is fraught with hurdles and complexities. Nevertheless, Campbell argues, the Super Ditch is creating important new paradigms: First, by opening up new market channels, it helps farmers recognize the value of this important natural resource in ways other than outright sales or crop production. (Outright sales don’t enable a farmer to realize gains from water’s increasing value. Crop production profits are subject to the ebbs and flows of markets and commodity prices, which don’t often correlate with water’s value). That not only saves farms, it maintains a field of diversified water ownership. Diversified ownership creates market competition that will more effectively price water in the long run. Even though the price of water out West is increasing, municipal acquisitions tend to keep prices artificially low considering the scarcity of this precious resource.

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Click here to view the complete Fall 2015 Land Lines publication.