Why Utah farmers use so much water, and how we can get them to use less

Utah’s water crisis has been exacerbated by climate change. However, much of the water shortage can be attributed to the historic misallocation of water rights in the state. In our current system, less than 10 percent of Utah’s total water is consumed by municipal users. 

Then why is current legislation aimed at water conservation so focused on municipal water? If we succeeded in cutting municipal usage in half, total water consumption in the state would only be reduced by slightly less than 5 percent. This represents a drop in the bucket of Utah’s total water consumption. Instead, far more conservation potential can be found in a different part of the state’s water budget. 

Around 75 percent of all of Utah’s water is consumed by agricultural water users. This includes irrigation companies as well as individual water right holders that use the water on their farms and ranches. Beyond reducing municipal water use, the Utah state legislature should incentivize the efficient use of agricultural water. The beneficial use doctrine, the no harm to juniors rule, and the application process to transfer a water right are three areas where reform could have a major impact. 

Why Utah Agriculture is so Thirsty

So why does agriculture in Utah use so much water? The answer is rooted in the state’s history of farming and water allocation. The Salt Lake Valley was settled in 1847 by Mormon immigrants that not only relied on agriculture to survive, but prided themselves on their agrarian ways. Due to the isolation of their settlements, early Mormons were dependent on agriculture for their survival, leading them to divert the streams and rivers of the Wasatch Mountains to irrigate their fields. 

As Utah’s population steadily increased in the second half of the 19th century, a more formalized system of allocating water rights, known as prior appropriation, was adopted. Prior appropriation was developed during the California gold rush as a method of allocating water to gold prospectors. It was based on the idea that the first person to divert a water source had the primary right to use said water source. The term “first in time, first in right” is often used to describe prior appropriation, highlighting the fact that early users have an advantage. 

In Utah, prior appropriation protected long-established farmers from the risk of drought by giving them preferred access to a water source. The more recent diverters of that water source were more exposed to the risk of drought. A foundational concept in prior appropriation is the beneficial use doctrine, which states that all appropriated water must be put to a beneficial use. 

Throughout the late 19th and early 20th centuries Utah water law was formalized and many aspects of prior appropriation, including the beneficial use doctrine and the no harm to juniors rule, were encoded into law. Water rights were designated as real property in Utah, similar to other forms of real estate like land, and were placed under a higher level of regulatory scrutiny. This made water rights difficult to buy and sell independently, as the rights were seen as intrinsically connected to the land the water was being used on. If water rights were being sold, it was usually in conjunction with the land itself. 

When Utah’s population was still relatively small and the economy still largely agricultural throughout the early 20th century, this system of handling water rights was equipped to meet the needs of the state. Today, Utah’s water needs are changing, driven by demographic changes and a diversifying economy, but water usage in the state is still dominated by agriculture. 

As Utah’s population has grown and its economy diversified, the allocation of water in the state has not adapted to the changing reality. Climate change and drought have only worsened the consequences of water misallocation, putting the state into a position where water is not only misallocated but also over-allocated. Utah’s antiquated water laws have not enabled water rights to shift from low-priority uses such as agriculture to increasingly important uses such as lake conservation and municipal consumption. They have instead maintained a similar allocation of water that existed throughout the 20th century, as is evident by the small number of water transactions that have occurred over the past few decades. 

The state’s use it or lose it policy has further perpetuated the overconsumption of agricultural water. It gives the state the right to forfeit a part or all of a water right in the case that a right holder does not consume all of their allocated water. This means that even if the marginal value of agricultural activity is quite low, farmers will still plant their fields to avoid the loss of their water rights. So rather than healing damaged water systems or refilling reservoirs, much of the state’s water is used to create an excess of water-intensive crops like alfalfa. 

So What Needs to be Done?

It’s unrealistic and unreasonable to expect Utah’s farmers to simply surrender their water rights to help the state reach its conservation goals. Instead, the legislature should look for sustainable incentives for farmers to use less water. To achieve this, a market to facilitate water transfers between agricultural water users and municipalities, conservation organizations, or even the state government should be created. 

The state legislature took the first step during the 2021 legislative session by passing HB33, which makes it possible for farmers to leave their water in stream without risking the loss of their water right under the use it or lose it policy. This bill took away the punishment for conserving water, but there still does not exist a financial incentive for farmers to reduce their water consumption. To reduce agricultural water use, certain changes in the policy governing water rights transactions must be made to remove barriers that are blocking such transactions from occurring.

The first key change involves rethinking the way the state enforces the beneficial use doctrine. In Utah, beneficial uses includedrinking water, fish and aquatic life, wildlife, agricultural, industrial, and recreational uses.” Each prior appropriation state has some form of the beneficial use doctrine. The way it is enforced varies from state to state. In Utah, anyone looking to purchase or lease a water right must provide evidence of beneficial use and have the evidence verified by a surveyor or engineer. This makes the process of purchasing a water right excessively costly and time consuming, deterring potential water right purchasers. 

In California, the state legislature has allowed temporary water rights transfers to move forward without verification of beneficial use. Though the system has some flaws, it has allowed farmers in California to lease their water rights to different groups, such as in one case where agricultural water was repurposed by an environmental organization to repair wildlife refuges. Utah should consider adopting a similar approach to the beneficial use doctrine that focuses more on flexible transfers and monitoring of water use, thereby allowing water to flow to more efficient uses.

Water transactions in Utah are also limited by a regulation commonly known as the “no harm to juniors rule.” Under prior appropriation, a junior water right holder is an individual that diverted a water source that had already been diverted by someone else. Thus the water claimed by the junior right holder is only fulfilled if the senior right holder receives their entire allotment. There can be as many as thousands of water right owners on a single water system, and so most right owners are junior to some water right owners and senior to others. 

Problems arise when a senior water right owner wants to sell their water right. The junior water right owners down the line from them can legally protest if they believe the transaction will threaten their own water rights. When the junior water right owners protest, the senior water right owner must demonstrate that the transaction will not harm any junior. As precipitation, return flows, and a host of other factors can be impacted by changing how water is used, proving that junior water right holders won’t be harmed by a transaction is often expensive and time consuming. 

To reduce this regulatory burden, the state should consider shifting the burden of proof to the protesting junior right holder, rather than placing it on the senior right holder. Such a change would prevent junior water right holders from protesting without a just cause and allow more water transactions to proceed, while still protecting junior water right owners. 

In addition to changing how these aspects of prior appropriation are enforced, the state should streamline the application process to sell or lease water rights. The current application procedure is a drawn-out process of public hearings, investigations, and reviews that must then be approved by authorities at various levels in the state government. Such an application process is excessively burdensome, particularly for smaller water rights that are unlikely to have an impact on the state’s watersheds. Changing how beneficial use and the no harm to juniors rule are enforced would help cut down on the application timeline. The state should further decrease the amount of regulatory oversight involved in small water rights transfers. 

Each of these reforms, especially when combined, will reduce the time and monetary cost of transferring or leasing water rights. Farmers face pressure from the increasing pace of development and are also frequently asked to reduce water use, which directly impacts their economic wellbeing. Reducing regulatory hurdles and creating a financial incentive by investing in markets for water leasing are essential steps to create an environment where it’s possible to reduce water usage across the state, not just within municipalities.

Projects that have reduced the regulatory burden to water trading, such as the Colorado-Big Thompson Project, demonstrate the potential to facilitate water rights transfers. The Big Thompson system has fundamentally shifted away from prior appropriation towards a share-based system, implementing a market that has facilitated much higher numbers of water transfers. The success of the Big Thompson project compared to Utah’s stagnant number of water transfers suggests that the costs of excessive government oversight of water leasing outweigh the benefits, if the goal is to move water where it needs to be to combat drought. 

The Road Ahead

As headlines continue to buzz about the damage of ornamental grass and golf courses, it is important to recognize that there is far greater potential for conservation in agricultural, rather than municipal, water use. To achieve greater efficiency in water use and create a pathway to refill Utah’s lakes and streams, the state legislature should decrease the regulatory burden of trading water rights and strengthen the financial incentive for agricultural water users to participate. Such changes should include:

  • Give state officials discretion in when to evaluate small water rights transactions’ beneficial use compliance 
  • Place the burden of proof on junior water rights holders when disputing a water transfer
  • Streamline the application process to change or lease a water right
  • Invest in pilot water market programs and outreach to water rights holders

These changes will help Utah’s water system adapt to the needs of the state’s economy and growing population. Combined with other efforts to help the state more efficiently use its water resources, these policy changes provide a path to a more abundant future.

CGO scholars and fellows frequently comment on a variety of topics for the popular press. The views expressed therein are those of the authors and do not necessarily reflect the views of the Center for Growth and Opportunity or the views of Utah State University.