At Last, States Reach a Colorado River Deal: Pay Farmers Not to Farm

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After a year of intense negotiations, the states along the Colorado River have reached a deal to solve one of the most complex water crises in US history. The solution to this byzantine conundrum is deceptive in its simplicity: pay farmers—who collectively use 80 percent of Colorado River deliveries—to give up their water.

Representatives from Arizona, Nevada, and California announced on Monday that they had agreed to reduce their states’ collective water usage by more than 3 million acre-feet over the next three years. That equals around a trillion gallons, or roughly 13 percent of the states’ total water usage. Under the terms of the deal, cities and irrigation districts in these so-called “Lower Basin” states will receive around $1.2 billion from the Biden administration’s Inflation Reduction Act, or IRA, in exchange for using less water. Most of the reductions are likely to come from farming operations.

Many had anticipated a more painful resolution to the crisis. Rather than taking mandatory cuts and losing out on billions of dollars from crop sales, irrigators in the southwest will get millions of dollars to reduce their water usage for just three years—and will cut their usage by less than half of what federal officials demanded last year.

This rosy outcome is only possible because of a wet winter that blanketed the river basin with snow and stabilized water levels in its two main reservoirs, Lake Powell and Lake Mead. Thanks to the ample runoff, the states could lower their target enough that the federal government could afford to compensate them for almost all of it.

This deal also resolves a key dispute between