Feds are putting a price tag on water in the Colorado River basin to spur farmers to conserve.

Nine times out of ten, the answer is money.

As reported by Wyoming Public Media, “The federal government is designating $4 billion from the Inflation Reduction Act for drought mitigation work in the Colorado River basin.”

“On Wednesday, the Department of the Interior announced that total, indicating that $500 million will go to efficiency upgrades in the river’s Upper Basin states of Colorado, Utah, New Mexico, and Wyoming. Another chunk of IRA money will be set aside for direct payments to farmers and ranchers to forgo water deliveries from Lake Mead in the river’s Lower Basin, primarily in Arizona and California. Federal officials are not specifying how much money will be available for that first round of payments.”

The idea is that farmers will set aside land for fallow, reducing the amount of water being drawn from the basin, and be paid from $330 per acre foot to $400 per acre foot for doing so. The longer you set aside land, the higher payment.

It will be interesting to see how many farmers enroll in this program. Critics point out that they feel the amount being offered does not represent fair market value. They are calling for $1250 per acre foot, or more.

What is also not clear is what happens after year three. Currently the plan is to “request programs for further water reduction”. Most experts believe that the circumstances that have caused the current water shortage will not be solved in the near future.  Stay tuned for further updates.