Farmers on the high plains of southeastern Colorado are selling water, which once produced melons, to the Denver suburb of Aurora.
"These rural communities in almost any state you want to go into, they're all getting smaller," said Ron Aschermann, a 60-year-old whose family has farmed in the area since 1911. "The best dollar for the asset right now is the water."
Aschermann barely eked out a living raising melons, cucumbers, tomatoes or other crops on his 300-acre farm. But selling water will earn him more than $1.2 million.
The same thing is happening across the West as the nation's fastest-growing region shifts more water from farms to thirsty cities. Billions of gallons changed hands last year in eight Western states, and even more will flow in years to come. California recently approved a 75-year shift of water from desert farms to San Diego, the biggest transfer of its kind in U.S. history.
Colorado's Arkansas River Valley serves as a cautionary example for the West's burgeoning water market. For a one-time payment of $18 million, Aurora bought water to flush toilets and grow flowers at new homes, and a faded farm region will be dealt another blow. What was once the pride of Rocky Ford–a 13-mile ditch that settlers dug by hand shortly after the Civil War–will be nearly drained. When the water leaves, more jobs and local businesses are expected to dry up as well.
So what's the answer for the 450,000 farms in the West? Growing cities will continue nibbling away at agriculture's share of the water. Farms use as much as 95 percent of the water in some areas of the West. Many believe that water markets offer a way to get water to cities without completely wiping out farms.
Over the past decade, Northern California's rice farmers have sold smaller stakes of their sizable water supply to Los Angeles over years. Instead of viewing it as a threat to their survival, growers say selling water offers them a financial cushion if the price of rice collapses. "I truly believe that it could be a beneficial part of a farmers' mix at a small level," said rice grower Don Bransford.
Similarly, a market has evolved for water from the massive Colorado-Big Thompson Project, which brings water over and through the Rockies to northeastern Colorado through a series of dams, tunnels and pipes. Cities have paid as much as $0.06 a gallon for Big Thompson water, some of the state's and the West's highest prices.
Towns in Texas lease large amounts of Rio Grande water through well-functioning markets; developers have set up a system to buy Truckee River water for new homes in and around Reno; and Albuquerque, N.M., has been buying up Middle Rio Grande water rights from farmers, according to the Water Strategist, a Claremont, Calif., publication that tracks sales.
"Westwide, over the next 25 to 50 years, you will clearly see additional examples of what's happening in the Arkansas Valley," said Bennett Raley, a Denver water lawyer who is now the Bush administration's point man for Western water issues.
California's Imperial Valley farmers flood desert fields to produce huge amounts of alfalfa, a thirsty, low-value crop. The question on many minds is whether growers will be tempted to farm water rather than farm the land.