California is already in water shortage, if the reductions in deliveries to farmers (the canaries in the mine) are indicative of what's coming down the pike.
Farmers, predictably, are reacting with indignation and fear:
Mike Wade, Executive Director, of the California Farm Water Coalition claims that farmers use "only" 41 percent of California's water (not 80 percent, as I and others claim) because environmental flows get 48 percent of the "controlled" water. His claim is silly, as environmental flows are not just required by law, but required to keep our ecology intact. Cotton and alfalfa -- crops he claims "are in demand in the marketplace" -- are water hogs that should not enjoy special protection. This guy clearly misunderstands supply and demand: Everything is in demand in the marketplace -- the only question is the price, and cotton and alfalfa would not be in demand if their prices reflected the true costs of water.
More relevant is the quandary that avocado farmers face in San Diego county: Because they get subsidized water prices, they face cuts of 30 percent in their deliveries when water is short. It's short now, and they face the prospect of low yields and/or dead orchards. If given the chance, a number would probably want to buy water to get a better harvest and/or protect their investment.
Bottom Line: Farmers pay too little for water they claim to "use wisely", but they cannot get water when they actually are willing to pay for it. Water needs to be allocated in markets -- regardless of the final use.