A look at “Buy and Dry”

Photo credit: Allen Best

From KUNC (luke Runyon, Matt Bloom & Esther Honig):

“Buy and dry” describes a class of water transactions that typically involve a municipality or other local government paying the owner of a farm for some or all of their available water rights.

It’s a slow, mostly invisible flow of water from the region’s heritage industry — agriculture — to a new powerhouse: real estate development and urban growth.

The transactions go back decades, with plenty of cautionary tales to guide both farmers and government officials, casting various Front Range cities and Eastern Plains farming communities as both villains and victims.

Concern about the practice has reached a fever pitch. The state’s water plan, adopted in 2015, frowns at buy and dry tactics. Water prices continue to rise. Some alternative methods for leasing water are slowly being implemented, at the same time multi-million dollar checks are passed from developers and city planners to farm families.

Urban growth is a driver

The practice of buy and dry is primarily driven by the growth of water-short cities – of all sizes – along the Front Range. According to Colorado’s State Demography Office, communities along the I-25 corridor in Weld and Larimer counties are the fastest growing. Populations there are increasing at a rate twice as fast as the state as a whole…

Windsor, like many fast-growing Front Range communities, sees agricultural water as a viable source to supplement future growth. As recently as May, Windsor purchased water rights from at least two different farming families, according to allotment contracts from the Northern Colorado Water Conservancy District.

One purchase was of units of water within the Colorado-Big Thompson Project from the John Ernest Lucken Revocable Trust. The other with the Andrew H. Blase Family Trust.

In both cases Wagner says he doesn’t know whether the town’s purchases led to farms “drying up.”

“I’m not sure of what’s happened to those farms,” he said. “Whether they still have enough water rights to irrigate or whether they’ve reduced the farming acreage.”

Wagner added that Windsor, unlike other cities, has not specifically purchased farms to own them and take the water off them. When asked about the likelihood of the town doing that, Wagner said it very well could…

Water rights worth millions

For farmers in the West, access to water is a key part of making agriculture possible in an arid region. Without irrigation farmers are significantly limited on the range of crops they can grow and in the profitability of the land they own.

With commodity crop and milk prices at low points, selling water rights can help make a farm operation whole.

That’s the case for Colorado dairy farmer Timothy Bernhardt, just down the road from Windsor in Milliken. The Bernhardt family has farmed there since the 1920s. Access to water to quench the thirst of his 900 dairy cows is essential, Bernhardt says.

“Cattle drink a lot of water, so about 50 to 100 gallons of water a day,” he says. “So it’s critical for milk production because milk is made up mostly of water.”

In May Bernhardt and his brother made the choice to sell 175 units of water within the Colorado-Big Thompson Project — about 57 million gallons — to the city of Milliken for nearly $5 million.

That money will be used to pay off debt, Bernhardt says. Like many businesses, farms rely on loans and credit to operate and the brothers wanted to pay it off because they’re each older than 60 and looking at retirement. Their children aren’t interested in running a dairy farm, so when they retire, the business ends with them…

Cautionary tales

There’s no arm-twisting in buy and dry, cities are often quick to say. These transactions involve willing buyers and sellers. Cities get what they need — new water supplies — and farm families get an opportunity to pay off debt, make on-farm upgrades or retire.

But on a regional-scale, water managers and government officials are troubled. Water flowing from farms to the Front Range means a movement of power and economic activity, from rural areas to cities. Take the Colorado-Big Thompson Project as an example.

When the vast network of reservoirs was originally built in the 1930s to transport water from the state’s wetter Western Slope to the east, agriculture was the majority user of its stored water. Today, 70% of the project’s water is used by municipalities and industry…

Conversations about buy and dry often turn to the Arkansas River valley and the communities of Crowley, Ordway and Sugar City. Water managers don’t really have to imagine what a future of rampant buy and dry could look like. It has already happened there…

Cronin and a handful of other water managers in the South Platte Regional Opportunities Working Group recently started a conversation about what it would take to allow Front Range cities to keep growing, without draining farms in the process. It looked like at least three — maybe four — new reservoirs positioned along the South Platte River to the stateline with Nebraska to supplement water supplies for cities and farmers.

Cronin cautions that these are preliminary discussions.

He calls the discussion of new reservoirs a “generational” one — if the idea gains enough supporters for it to happen at all. Large-scale water projects often take decades in planning, permitting and litigation before a shovel hits the ground. This one would likely follow a similar timeline, Cronin says. Questions still linger about how much it would cost, another big hurdle to bringing it to fruition.

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