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Stewardship Versus Bureaucracy

A market-based system for groundwater would more accurately reflect water’s economic and ecological value to society.

SEPTEMBER 01, 1993 by RICK PERRY

Rick Perry is Commissioner of the Texas Department of Agriculture.

Ensuring a safe, plentiful water supply is an issue crucial to the well-being of every American--one that will certainly intensify as we move into the twenty-first century. Thus, we must answer this question: How can we guarantee a sufficient supply of water to satisfy the necessary but competing demands of agriculture, industry, and a population that is expected to increase rapidly in the next 50 years?

First of all we must challenge the assumption that government ownership offers the best solution for protecting our precious natural resources. The premise that puts bureaucratic regulation above the rights of private property owners is not only false, it actually promotes problems for our environment.

Look, for example, at the Pacific Northwest, where a combination of federally operated dams and reservoirs and state policies that prevent the resale of water rights has contributed to the depletion of salmon populations.

The salmon’s seasonal need for high water levels to journey to its summer spawning grounds coincides with peak consumer demand for electricity in the West. So, it would make good sense to produce and sell more hydroelectricity during these peak months and to conserve it when demand is low. Consumers would benefit and so would the salmon.

Unfortunately, a maze of bureaucratic regulations combined with the West’s “use it or lose it” rule that often prevents resale of water rights makes such a sensible solution nearly impossible, and the salmon species has suffered, not benefited.

Our natural resources are better left in the hands of private citizens who are more likely than government agencies to care for them. It’s a question of stewardship versus bureaucracy. Private ownership gives people a vested interest in their property, instills pride in what they own.

Ownership also spurs agricultural producers to manage their resources wisely—their water as well as their land. In Texas, groundwater management has historically been based on the “right of capture,” the decades-old, time-honored premise that bestows ownership of water on the owner of the land above. Under this system, farmers and ranchers have led the way in developing efficient methods of water use.

There is room for improvement, however. Though ownership of groundwater is vested in property owners in the Texas Water Code, this property right is loosely defined, which affects the incentive to conserve. A market-based system for groundwater with well defined, enforceable, and transferable property rights based on the surface ownership would more accurately reflect water’s economic and ecological value to society. By strictly defining the ownership of underground water, it can be given a value—just as land has—and become subject to the efficiencies of the marketplace. Water rights would be more marketable, and owners would be able to sell water to buyers at a price reflecting market demand.

Such a market-based system would replace government control of water—and the specter of rationing, expensive financing programs, and confiscation of water rights by a centralized bureaucracy. Government involvement would remain in the hands of local water districts that would define owners’ rights and devise enforcement methods appropriate to each locality.

A market-based system—achieved by placing a value on water inventories—would motivate agricultural producers to increase even further their conservation efforts and enhance supplies for future generations.

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September 1993

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