Rural to urban water transfers in Arizona : an economic analysis

Arizona cities and urban developers in Arizona have been purchasing irrigated agricultural lands in recent years to obtain the lands' appurtenant water rights in order to meet the increased urban water demands. The objective of the study was to determine whether or not farmers who sold their land and water rights benefitted from the transactions based on a comparison of the price received with the value of the land and water rights in agricultural production. Results showed that the minimum price that a farmer could have accepted was a fraction of what the urban buyers paid. Included in the study was the effects of government commodity programs on the value of water in irrigated agriculture. The study concluded that for Arizona cotton growers, federal price support programs increased the returns to water significantly, which, in turn, increased the value of water to the Arizona cotton farmer. Price supports, therefore, kept the farmer's minimum price for land and water rights higher than had there not been price supports.

azu_td_hy_e9791_1987_407_sip1_w.pdf (4.83 MB)

Author(s)

Publication Date