NEW! Cities may rely on agriculture's lifeblood - water

The ditch is nothing special, just a short stretch of cut earth running through a cow pasture from the High Line Canal to the wide, muddy Arkansas River.

But the Arkansas Valley farmers who built it — and the city folks who benefited from it — say the nondescript ditch is a harbinger of the future, a way to preserve Colorado’s agriculture, yet sate the thirst of its booming cities.

The small ditch and other infrastructure was built to allow Aurora and Colorado Springs to lease millions of gallons of water from the High Line Canal during the depths of the drought in 2003 and 2004.

The cities diverted most of the leased water higher on the Arkansas and used the ditch to transfer a smaller portion, as required by water law, from the High Line Canal to downstream users on the river.

In exchange, shareholders in the 120-year-old High Line Canal who leased the water received $16 million. That was a badly needed windfall in the middle of several grim years for farmers in the Arkansas Valley, said Dan Henrichs, general manager of the High Line Canal Co. and a cattle rancher.

“It was a lifesaver,” agreed Bert Nesselhuf, who farms the same land his parents once did near Manzanola. He said many farmers used the first year of lease payments to pay off bank notes and the second year of payments to repair or buy new farm equipment.

The temporary water transfer, aided by recent changes in Colorado water law, was the largest in Colorado history and may serve as a template for future leasing deals.

In fact, there is a growing consensus among both farmers and municipal water suppliers that such leasing agreements - and even grander, more permanent leases now in the works - could be the way to head off an imminent clash over water between urban and rural Colorado.

Leasing, rather than buying, ag rights also could quell the fear of small towns that depend on agriculture that they will be sacrificed to the Front Range’s voracious appetite for Big Box stores and endless subdivisions.

Still, say farmers and water suppliers, leasing water cannot in itself stem a general decline in agriculture in Colorado, caused only in part by the pressures of urban growth.

Farmers and the small towns that depend on them, they say, must figure out how to adapt to an economy that has moved far from America’s agrarian roots.

TROUBLE AHEAD

There is nothing simple or easy about water in Colorado. Except this: By 2030, Colorado cities will experience a shortfall of water in the range of 630,000 acre-feet a year, according to a state study. That is eight times the amount of water Colorado Springs reaps from all its various sources in a normal year.

The Colorado Statewide Water Supply Initiative estimated 233,000 to 372,000 acres of irrigated farm land - about 10 percent of the state’s total irrigated land - would need to be taken out of production to meet that shortfall.

Water suppliers are looking at various options short of using ag water to bridge the gap, but none is particularly attractive. Most think the era of large transmountain diversion projects — the kind that supplies Colorado Springs with most of its water — is over.

Water conservation in one form or another has been adopted by many communities, but the savings won’t make up the shortfall between supply and demand, experts say.

Water reuse — treating waste water to drinking standards — remains an option, but it is expensive and fraught with public relations problems.

That leaves agriculture. Because farmers and ranchers in Colorado own about 90 percent of the water in the state, it doesn’t take a divining rod to know cities are eyeing the water now running in their ditches.

In fact, it’s been happening for years. Aurora has been particularly aggressive in buying agricultural water rights in the Arkansas Valley. Colorado Springs last bought agricultural water rights in the 1980s, but it too bought water in the valley when the sugar beet market collapsed in the 1970s. Pueblo, despite the aspersions its politicians and newspaper cast on urban water buyers to the north, also has bought water rights in the valley for municipal use.

The same trend is happening outside the Arkansas River Basin. The Parker Water and Sanitation District recently bought 13 ranches in Logan County just for their water.

Water suppliers such as Colorado Springs Utilities say they are approached weekly by farmers wanting to sell water rights. Still, such sales are hugely controversial.

Communities in farm country say buying up ag water is like cutting open a vein, drawing blood and leaving the patient to die. The loss of water, they say, results in dried up farms, lower land values, less revenue to governments, schools and businesses and, eventually, ghost towns.

Cities aren’t particularly wild about buying ag water themselves. In the best case, the farm goes along with the water, and water managers say they aren’t interested in getting into the ag business. In the worst case, the water is separated from the land, and the land often reverts to weed-filled prairie.

“After we bought the farms, I thought there has to be a better way than this,” said Frank Jaeger, manager of the Parker Water and Sanitation District.

Jaeger’s district has commissioned Colorado State University to study how irrigated agriculture can be preserved as a viable business while supplying water to an urban population expected to nearly double in the next two decades.

“I hate cliches like win-win,” Jaeger said of the promise of leasing rather than buying ag water. “This is a business, and both sides have to walk away satisfied.”

WATER IN THE BANK?

Despite the success of the High Line Canal lease, experts say there are significant legal, logistical, storage and political obstacles to overcome if even grander arrangements are going to happen.

That’s because folks who own water, always one of the most precious resources in the West, are hugely protective of it. For example, legislators thought they were doing ag and thirsty cities a great favor when in 2002 they established a pilot program in the Arkansas Valley that created a water bank.

The program envisioned farmers electronically posting water rights they wished to lease and the price they wanted. By 2004, the experiment was abandoned by the Southeast Colorado Water Conservancy District because of a lack of participation.

Still, the idea of leasing water to cities while bringing in sure revenue remains appealing to farmers. Another water group, the Upper Arkansas River Water Conservancy District, recently indicated it may revive the idea of a water bank.

A similar group, the Lower Arkansas River Water Conservancy District, is proposing another water bank that it calls the “Super Ditch.” The scheme calls for shareholders in eight Arkansas Valley canal companies - but not the High Line - to offer long-term leases, 25 to 40 years, to other users in the Arkansas River basin.

Jay Winner, general manager of the district, said the super ditch would be owned and operated by farmers, who would decide how much of their water they wanted to lease.

Winner said the program is patterned after successful water banks that have operated for years in California, Idaho and Utah. He expects the water bank could begin operating by 2008 to 2010, supplying water only to users in the Arkansas River Basin.

Organizers have been approached by a group of small water districts in northern El Paso County that want to pipe water from the lower Arkansas River to recharge the Upper Black Squirrel alluvial aquifer that is being rapidly depleted by rural subdivisions. Winner thinks that pipeline could be in place as soon as 2012 if things go well.

Winner, though high on the promises of leasing, said grudges between canal companies and between farmers and towns and water organizations must be smoothed over. He also said leased water must be cheaper to potential customers than simply buying the water outright.

Farmers who own shares in the High Line Canal are taking a wait-and-see attitude. They said they want to see the details — especially how water from the various ditches would be valued, since their’s is particularly dear — before they’d commit to long-term leases.

Vernon John Proctor, a member of a prominent farming family near Rocky Ford, said he would prefer to lease water than sell it. But it chafes his chaps to be told by city folks — well-meaning or not — what to do with his property: “Too many people who don’t own water are trying to tell people what to do with it.”

And, he said, all the talk about leasing as the future clouds a fact some in the Arkansas Valley are loathe to admit: Farming is, in the end, a business. And a farmer who wearies of low crop or livestock prices, devastating weather, or encroaching urban growth eventually may sell out.

That’s been happening at an alarming rate. Colorado ranks third in the nation in the loss of agriculture land since 1992 — 2.89 million acres, according to a recent report by Environment Colorado. The state is projected to lose another 3.1 million acres by 2022.

Wayne Vanderschuere, water resource supply manager for Colorado Springs Utilities, said critics who accuse urban water suppliers of plotting the death of rural Colorado are being disingenuous. He said the shortfall in urban water supples by 2030 is only 5 percent of the 90 percent of the state’s water owned by agriculture.

He said the effects of buying or leasing that amount of water would be negligible compared to such forces as the aging of the farm population, the growing demand for recreational water or global economic forces in agriculture.

Vanderschuere, like some of the farmers in the Arkansas Valley, said agriculture and the small towns that depend on it face a variety of challenges in the 21st century, just as mining and manufacturing did in the 20th. He predicted smart, efficient ag folks who hone in on profitable crops and livestock will survive.

Dennis Caldwell, who with his brothers owns the largest share of the High Line Canal water, said his two grandchildren have expressed interest in farming, and he thinks leasing ag water will help him pass on his large operation to them.

“It’s going to be different for them,” he said. “They’ll be a lot of new challenges, but it’s possible. Some of the bigger outfits, we’ll make it work.”

And the others, the farmers who have sold their water and those who probably will in the future?

“Well, there never was water here to begin with.”

CONTACT THE WRITER: 636-0197 or bill.mckeown@gazette.com