Urban areas could easily get by with less, since 50-70 percent of urban water consumption is used for lawns and other outdoor irrigation.
Agricultural areas would clearly take a hit, but farmers with less water to work with wouldn't necessarily lose money -- they would have to get "more dough per row" by switching to garden crops, etc. My instinct is that they would lose (though market allocations where they would sell water to the highest bidders -- mostly cities) about 2/3rds of their water but only 1/3 of their revenue/profits as they switched from cheaper commodity crops (raisins, cotton, wheat, alfalfa, etc.) to fresh garden crops -- and that doesn't include the money they will make selling water!
Anyway, some urbanites welcome the idea of making do with local water supplies (via DW):
Miguel Luna, director of the grass-roots environmental organization Urban Semillas... [says] “Importing water creates a need. You’re providing the pipe and the crack for free and then you have to pay for it. But we know locally that local infrastructure works. We just need the investment to do it.”Bottom Line: We need more creative thinking of how to get the most bang for our buck -- not just more dams and canals.
Think about it: With the $5 billion Schwarzenegger wants to invest in his [Peripheral] canal, Los Angeles could build 10 water recycling facilities the size of Orange County’s Groundwater Replenishment System, which makes five million gallons of sewage drinkable every day. At the march, Nahai talked up the city’s “water-supply action plan,” a wide-ranging effort to wean the city off the dwindling supply of imported water.