As Arizona wrestles with the reality that its Colorado River supply as measured in actual wet water rather than the “paper water” doled out by the Law of the River, we’re getting a lesson in the difference between an “allocation” of Colorado River water and an “entitlement”. The place to watch this play out right now is in Pinal County, the stretch of rural desert dotted with cotton fields and alfalfa between Phoenix and Tucson.

We’re hearing a lot of talk coming out of Arizona about a collaborative effort to settle conflicts and move forward in the lead-up to a public meeting scheduled for Thursday (June 28, 2018) in Tempe. Bret Jaspers characterized what’s happening now as a “reboot” of the tortured relationship between the Arizona Department of Water Resources and the Central Arizona Water Conservation District, the agency that manages deliveries of Colorado River water to central Arizona.

The meeting will be held in Tempe and live-streamed on the Internet. Commissioner of Reclamation Brenda Burman will be speaking to, in the words of the Arizona Department of Resources “discuss the risks to the system” which, as I wrote about a couple of days ago, involve crashing Lake Mead kinda soon.

Pinal County is not exactly prime desert farming real estate, lacking the ready access to Colorado River water that you see in the valleys of Yuma, Imperial, Palo Verde, or on the Colorado River Indian Reservation. With little surface flow and an aquifer that cannot sustain farming in the long run, the only real alternative is imported Colorado River water via the Central Arizona Project, the canal that pumps water up from the Colorado River. But that is very expensive water, tough to afford without subsidy if you’re growing alfalfa and cotton.

And so subsidize we have (see this from Michael Hanemann for a history of CAP subsidies). Everybody’s irrigation water is subsidized in the West, but the Pinal County farmers’ water is subsidized a lot. Here’s how:

For the purpose of understanding Pinal County’s role in the current discussions, the key subsidy to look at is the deal signed by the counties’ ag interests in 2004 as part of the Arizona Water Settlements Act. Faced with high water costs even under the then-existing subsidy regime, the water districts signed a deal to essentially give up stronger water rights to free up water to meet Indian water rights settlement in return for yet more subsidy. Here’s how CAP explains it: