The Lower Rio Grande Valley: a case study of a water market area

The Lower Rio Grande Valley is a sub-tropical area with a productive irrigated agriculture, but with an over-committed single water resource. It is experiencing a rapidly growing population that is placing increasing pressure on the water resource. This, combined with expanding urban areas and land moving out of agriculture, has resulted in a vigorous water market, with transfers from agriculture to municipal uses. For the US portion of the valley, transfers from agriculture to municipalities are either short-term (usually 1 year) or permanent. Prices vary depending upon the location and timing, and result from negotiations between the parties. Over time, and not without difficulty, the water market has been facilitated by appropriate enabling legislation, water rights that have been validated judicially, and an efficient transfer mechanism that has a minimum of transaction cost. Government involvement is primarily for protection of the public, and to facilitate the transfer process.

G. LevineEmail: