Water and human rights -- part 8

This post is one of ten in the serialization of my paper on human rights, which is introduced here.

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Is this just a property grab?

Thus far, this discussion of human and property rights has conveniently ignored the rights of current water users. In many parts of the world, farmers control 70-80 percent of the “developed" (dammed, channeled, pumped) water. Although it is widely understood that these farmers own usufruct rights, it is also clear that they consider these rights as theirs — and their finances (land values, cash flows) depend on the strength of ownership.

These irritating facts get in the way of a nice theoretical discussion, but they needn’t hinder it. There are several ways to reconcile current and desired rights:

• Farmers (and other existing rights’ holders) can just be stripped of their usufruct rights by the “real" owners of the water, the citizens who have delegated management of their water to bureaucrats for many years. That would be disruptive and probably lead to years of legal fights (or real fights, or no fights, depending on the quality of the judicial system).
  
• Existing holders could have their rights reduced, in 5 or 10 percent increments, over time, allowing them to adjust from managing “their" water to buying and selling trade water owned by others.
  
• Existing holders would get their rights as long as lifeline rights are delivered first.

These options are relevant mostly because of the disruption in asset values that would occur in places where land values reflect water rights. In places where land and water are treated as separate property (e.g., Australia and Chile), the problem would remain (new citizen owners versus old owners) but it would be easier to resolve because separated values are clearer.

But note that upheaval need not reach nightmare proportions. Land values are primarily a function of location, soil quality and infrastructure. As mentioned above, water has to be delivered. This means that a farmer without rights will still be able to buy those rights and take delivery, due to their location near delivery infrastructure. Moreover, he is unlikely to have to pay much for their water, since urban demand is far less than total supply. On the other hand, note that lazy ownership (no reallocation or trading) will result in water staying in situ, which is good for the environment but bad for farmers who took that water in the past. A change in property rights might increase sustainability but reduce agricultural operations.

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In tomorrow's episode, I explore how a water market would work, for urban areas, the environment and agricultural and industrial users