Water Markets in Washington State: What If Leasing Part of a Water Right Was Allowed?

This AgClimate Network blog post summarizes research evaluating the economic and environmental implications of allowing partial leasing of agricultural water rights in Washington state. Under current rules, producers must either lease their entire water right and fallow land or retain all water for crop production. The study modeled a representative wheat and corn farm in the Walla Walla watershed to assess whether leasing a portion of water rights could increase farm profitability while augmenting instream flows. Results indicate that partial leasing could increase farm profitability by 6.1% while reducing crop production by 7.1%, and if widely adopted could increase critical summer streamflows by approximately 125 cfs. The post also discusses implementation challenges, including accurate estimation of consumptive water use and ecological considerations. The research suggests partial leasing could be one tool among several strategies to improve water allocation under increasing climate variability.

The work was supported by the USDA National Institute of Food and Agriculture through project #1016467.