17 February 2009

Why IID Is Dysfunctional

This 1993 paper [PDF] by Michael Rosen and Rich Sexton (chair of my PhD dissertation committee) was written with the Imperial Irrigation District in mind.

Abstract: The response of water supply organizations to potential rural-to-urban water transfers is examined using cooperative and club theory frameworks. Such organizations exercise control over agricultural water rights in their areas. The proposed water trade between Southern Califronia's Imperial Irrigation District and the Metropolitan Water District is analyzed and the results show that conflicts within these organizations may result from transfer proposals, leading to the temporary or permanent stoppage of such beneficial programs. Such conflicts may be avoided by explicit definition of property rights and by fostering a careful correspondence between these rights and the strategic and operational aspects of the water supply firms.

What the abstract doesn't make clear is that "conflicts within these organizations" refers to a divergence between voting and economic power. At IID, this means that one-man, one-vote political power does not match the concentration of economic power in farmers who are few in number (about 300) but responsible for 97% of water purchases.

The result is that the majority (by vote) makes policies that serve it (e.g., no water trades or reform of water institutions), and the minority (by vote) suffers from a reduction in the value of their assets (irrigated farmland).

During my recent water chats, this mismatch repeatedly came up as a source of friction and dysfunction. The easiest way to fix it is to separate IID's functions (water and power) into two organizations -- one to do power (governed by popular vote) and another to do water (governed by vote in proportion to assessed value -- as is standard in water districts elsewhere). Since there is little overlap between water and power (only 5% of power is generated by hydropower), this split will result in few operational losses.

Unfortunately -- and as was revealed in my chat with IID staffers -- there is no political will to allow water to split off. Those who have to political power to approve such a split would rather keep control over water, no matter the inefficiencies. That's a pity, since IID controls about 3MAF (or 7.5%) of California's entire water supply.

To read IID's dismissal of such a silly idea, click here [jpg]. Sorry, but that justification ("the intrinsic connection between water and power") is just lame.

Bottom Line: IID will continue to mismanage and waste its farmers' water supply for as long as it is run for the benefit of those other than the farmers.

1 comment:

J said...

Very interesting. Israel has been doing for decades exactly what you say does not work: establishing water quotas and fixing the price. You are right. It doesnt work. It is permanent state of conflict. Always oscillating between water being unused and discharged to the sea, and severe undersupply. Never right.