Cutting Edge Water Markets Support Farming and Preserve Precious Resources

Arlington, VA | June 28, 2018
For years, states in the western U.S. have faced record-setting droughts, putting pressure on local communities, economies, and businesses.  According to many seasonal predictions and forecasts, these droughts are expected to continue or worsen over the course of the summer.
Western states continue to have to balance weather and climate conditions with the need to preserve water for people to drink, industrial use, and other sectors, including agriculture.  To help address some of these challenges, The Nature Conservancy and partners in California and Arizona are looking to create new markets to support economic development and agricultural production with the need to conserve and preserve water resources.
According to the Brewers Association, there are more than 6,300 breweries in the U.S., approximately 6,200 of which are craft breweries.  Between the water agriculture needs to supply the raw materials and the actual brewing process, you need a lot of water to make beer.  Some estimate that it takes seven gallons of water to produce just one gallon of beer.  This has many brew makers looking for ways to evaluate their water usage, look for less water-intensive ingredients, and increase overall water-efficiency.  
Earlier this year in Arizona, the state’s first malt house, Sinagua Malt, opened for business, promising to produce four tons of malted barley a week for bakeries and breweries.  The barley will be supplied by Hauser and Hauser Farms, the largest commercial grower in the Verde Valley, a 600-acre farm that has converted 144 acres of land used for summer corn to grow winter barley.  While corn has a higher return on investment for farmers, it uses more water to grow. By planting winter barley on some of its land, the farms can spread out their risk and still make a profit while helping to protect Arizona’s Verde River, which is often drained of water during its lowest point, summertime, to maximize corn production. This new market helps local farmers while preserving one of the state’s hardest working rivers, which is at risk due to drought and increased populations.  Hauser and Hauser Farms and Speck Farms converting just one-tenth of crops in the Verde Valley would keep 200 million gallons of water in the river during the summer.  With water systems taxed in the summer, and an anticipated 70% chance of above-normal temperatures for most of Arizona and most of the state experiencing severe, extreme, or exceptional drought conditions, this innovative solution is good for the river and for farming.
California’s 77,500 farms produce more than 400 commodities, including strawberries, lemons, celery, raspberries, and avocados.  One-quarter of what California produces is exported to countries around the world, which totaled $20 billion in 2016.  California’s 25 million acres of farmland require a lot of water.  Water the state doesn’t have as much of due to six years of intensive and record-breaking drought.
With implementation of California’s Sustainable Groundwater Management Act of 2014, growers in Ventura County are facing unprecedented challenges from reduced water availability. To combat these challenges, farmers in the county are installing state-of-the-art telemetry hardware on more than 700 agricultural wells, providing real-time monitoring of all agricultural groundwater pumping in the coastal half of the county. This precise metering of water is important because until now, regulators relied on voluntary reporting by the farmers on how much water they were using.  
Under the existing system, as water allocations are cut in the face of drought, water users must simply get by with less water.  Historically, there has been no mechanism for transferring water use from one piece of land to another or from one water user to another.  As a result, significant reductions in water allocation threaten the viability of agriculture and expose farmland to the threat of urban sprawl.
The water market is similar to carbon markets in that it is a “cap and trade” system where water use is capped and water allocations may be traded. The key difference is that the water market doesn’t include the ability for participants to buy offsets.  The only options are to stay within your pumping allocation, buy more water from a willing seller that won’t use an entire allocation, or sell part of an allocation. The new water monitoring equipment will allow farmers to know precisely how much water they’re using, or not, and decide whether they want to transfer water use from one piece of land to another, or from one water user to another.
Spokespersons available for interviews:
For Arizona:
• Kim Schonek – Verde River Project Director
• Chip Norton – malt house investor 
• Zach Hauser – fourth-generation farmer
For California:
• Matthew Fineup, Executive Director of Center for Economic Research and Forecasting, California Lutheran University
• EJ Remson, Senior Program Manager, The Nature Conservancy
• Participating farmers
For water security and quality issues:
• Giulio Boccaletti, global managing director, water, The Nature Conservancy

The Nature Conservancy is a global conservation organization dedicated to conserving the lands and waters on which all life depends. Guided by science, we create innovative, on-the-ground solutions to our world's toughest challenges so that nature and people can thrive together. We are tackling climate change, conserving lands, waters and oceans at an unprecedented scale, providing food and water sustainably and helping make cities more sustainable. Working in 72 countries, we use a collaborative approach that engages local communities, governments, the private sector, and other partners. To learn more, visit or follow @nature_press on Twitter.

Contact information

Ciaran Clayton
+1 (703) 841-4253


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