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Water rights — and responsibilities: A use tax would benefit Whatcom farmers

Water can no longer be considered an inexhaustible resource

Rights to water from the Nooksack River, pictured here between farmlands in Lynden, will be adjudicated through a legal process beginning this year. Farmers would be wise to get ahead of the game by measuring and paying a tax for water use, guest writer Eric Hirst argues in a Cascadia Daily News commentary. (Hailey Hoffman/Cascadia Daily News)
By Eric Hirst Guest Writer

Whatcom farmers will have much less water to irrigate their crops in the future, for two key reasons: (1) climate change is dramatically reducing the amount of water in the Nooksack River basin during the summer months, and (2) the forthcoming adjudication of water rights will further limit agricultural water use.

Given the importance of local agriculture to the Whatcom economy, culture and history, farmers and society in general should adopt methods to maintain farming with less water. But there is a disconnect between what is needed in the long run and what makes sense in the short run. Specifically, farmers generally self-supply their water. Therefore, they do not face an explicit price for water; it shows up only in their monthly electricity bill (or the charges for diesel fuel) for pumping irrigation water. Thus they have little economic incentive to conserve water.

Taxing irrigation water use (1) would provide a strong economic incentive for farmers to improve the efficiency with which they use water, and (2) the money collected could be used to help farmers adapt to a warmer, drier climate.

The effectiveness of such a tax depends on how responsive farmers are to their cost of water. A recent study used data from the Pajaro Valley in California to estimate farmer responses to changes in the price of irrigation water. “The reduction in annual water use doubles between the first year and the fifth year after the tax, with the implied price elasticity of demand ranging from -0.86 to -1.97.”

I used these price elasticities along with data and estimates on Whatcom County agriculture (acres irrigated, water use per-acre, and variable irrigation costs) to calculate the effects of a $5/acre-foot (af) tax on water use over a 10-year period.

The cost to pump water up from a well (or a stream) and horizontally to a field depends on many factors. These include well depth, pipe diameter, water pressure, horizontal distance, flowrate and pump/motor efficiency. I was unable to find reliable estimates of the variable costs to pump water for irrigation. Based on several approximate sources, Iuse low and high estimates of pumping costs: $26 and $54/af. By comparison, Public Utility District No. 1 irrigation customers pay $560/af.

The amount of irrigated land in Whatcom County is about 46,000 acres. And the amount of water used annually for irrigation is about 1.5 af/acre.

Averaged over the high- and low-price cases, irrigation water use would decline by 13% in year one (a reduction of 9,000 acre-feet). For years 6 through 10, the reduction would be 29% (20,000 acre-feet). The revenue raised by the tax would equal $300,000 the first year and decline to $246,000 for years 6 and beyond. Over a 10-year period, $2.6 million would be raised. Given uncertainties about pumping costs and the price sensitivity of Whatcom farmers, these numbers should be considered indicative and not definitive.

This average farmer would pay $450/year for this water tax, less than 0.1% of farm sales. Of course, the tax would be a higher share of earnings but still quite small.

I suggest the six Watershed Improvement Districts or Whatcom County be responsible for collecting this tax. And I suggest the farmers decide how best to prepare themselves for a water-scarce future.

How might Whatcom farmers use this money to pay for water meters, more efficient equipment, and other measures that would allow farmers to do more with less? Some options include:

  • Sophisticated irrigation scheduling practices
  • Improved irrigation-equipment maintenance practices
  • Improving soil quality and moisture retention
  • Use of soil-moisture sensors to guide irrigation scheduling decisions
  • Application of precision agriculture technologies
  • Switching from water-intensive crops to those that require less water
  • Switching from surface water to groundwater
  • Fallowing (or taking out of production) land with poor soil quality.

We can no longer treat water as a nearly free, almost inexhaustible resource. We must recognize the scarcity of summer water supplies and price that resource accordingly. Taxing water use is one important policy option to reduce water use, increase water-use efficiency, and provide money to deploy new technologies and systems. Those who oppose such a tax should offer alternative solutions that provide similar benefits.

Because price is a powerful motivator for behavior, the $5/acre-foot tax on agricultural irrigation water use analyzed here would likely have substantial effects on water use, both short- and long-run. And the tax would raise much-needed revenues for local water-resource projects.

Eric Hirst, a retired energy policy analyst, is a long-term environmental activist who has lived in Bellingham for 20 years. He previously wrote about water adjudication on the Nooksack system on May 4, 2022.

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