“I could irrigate my crops with 40 percent of the water I use now, but those drip systems cost between $1,200 and $1,800 per acre and I need to recoup the investment,” says Tharp. “If I could sell the water I save on the open market, that would be a huge incentive. I think it would behoove a lot of farmers to make these investments if they knew they could sell the saved water to municipalities and not lose their water rights.”

Like Tharp, thousands of southern New Mexico and West Texas farmers are discouraged from investing in water-efficient technology because of outdated laws and regulations, such as bans against selling water to municipal users, said Frank Ward, professor of natural resource economics at New Mexico State University’s College of Agriculture and Home Economics.

Ward is co-directing a joint study between NMSU and Texas A&M researchers in El Paso to identify “institutional barriers” that discourage water conservation and analyze policy reforms.

“The good news is, government policies during the past century have created an abundance of cheap, easily accessible water for farmers along the southern Rio Grande, and that’s made the desert bloom,” Ward said. “The bad news is, the government has unwittingly made water so cheap and abundant that it’s discouraged farmers from investing in measures to conserve water, especially the folks downstream of big dams. There are many ways to conserve water, but farmers will only get on board when the economic benefits outweigh the costs.”

Ward said federal construction of Elephant Butte Dam and other reservoirs combined with interstate water pacts that assure adequate water distribution among lower Rio Grande irrigators have allowed agriculture to flourish. But burgeoning urban populations in Las Cruces, El Paso and Juarez are straining water resources.

In addition, demands to divert water for endangered species and dwindling water supplies from drought make conservation urgent.

“There’s much more demand for water at a time when supplies are scarce,” Ward said. “We need incentives to help farmers free up irrigation water for cities and other uses.”

Researchers have already identified nearly a dozen adverse policies. One major disincentive is the use-it-or-lose-it policy, whereby irrigators must demonstrate that they are using their water to retain their rights, Ward said.

“Use it or lose it helps protect against speculative buying and selling of water, but it also encourages growers to consume more than they need to show they are really using it,” Ward said. “Farmers need guarantees that they won’t lose their rights if they conserve water.”

Growers also need to be able to sell saved water at competitive prices to recoup investments in conservation technology. Elephant Butte Irrigation District (EBID) and El Paso County Water Improvement District Number One farmers are only permitted to transfer water to fellow district farmers at official prices.

This year, the rate was $20 per acre-foot at EBID and $15 in El Paso. But if the markets were open, municipalities might pay $200 or more per acre-foot for that water, said Ari Michelsen, director of the Texas A&M Agricultural Research and Extension Center in El Paso and project co-coordinator.

Michelsen said carryover regulations governing distribution of water conserved by irrigators in a given season is another major impediment. New Mexico irrigators receive 57 percent of Elephant Butte Dam water annually and Texans 43 percent. If an irrigator from either district uses less water one year, the saved water is stored at the dam and then reallocated the following year under the 57-percent to 43-percent division.

“That’s a disincentive to conservation because only a portion of the saved water is returned,” Michelsen said.

NMSU and Texas A&M researchers are now surveying 400 farmers -200 from each irrigation district - to determine irrigated acreage, types of crops, irrigation methods, seasonal water use and economic incentives needed to adopt more efficient irrigation technologies and practices, said Leeann Demouche, NMSU research specialist with the project. The survey will be completed this year and compiled into a report next spring.

“The study will give us the concrete data needed for future policy recommendations,” Demouche said.

Meanwhile, researchers are working with the irrigation districts to encourage farmers to use conservation technologies that will help them save money even without policy changes, such as installing water meters on farms, Demouche said. EBID growers currently receive up to 3 acre-feet of water in a normal season, but many farmers don’t need that much water. By installing meters, they can precisely measure water flow and close irrigation canals when their crops are wet enough. EBID simply credits the savings to their accounts.

So far, only nine EBID growers are using the meters, including Charles Tharp, who installed two data loggers at $600 apiece.

“I saved $1,079 on my account just in the 2002 season,” Tharp said. “The meters have already paid for themselves.”