Colorado's San Luis Valley farmers voted to tax their own groundwater and cut pumping 30%

NPR's 2017 report describes the San Luis Valley, a dry Colorado valley about the size of New Jersey whose farms rely on a shallow aquifer. After the drought that began around the early 2000s, the aquifer was declining, neighbours argued over blame, and state regulators threatened to impose harsh restrictions. After years of court cases and in-fighting, the farmers agreed that everyone had to pay more for water; Cleave Simpson of the Rio Grande Water Conservation District said the fee works because it hits the pocketbook directly.

As reported, for six years farmers have paid roughly three or four times more each time they pump. The most heavily irrigated fields pay $75 for every acre-foot pumped and another $8 for every irrigated acre, which can run to tens or hundreds of thousands of dollars a year. NPR says it was the first time in the US that a group of farmers voted to tax their own water use.

Without water the valley is a desert, and without farms the nearby towns suffer too.

A voluntary vote kept the regime in local hands instead of waiting for state regulators.

The fee scales with pumping, so heavy users bear the most cost and have the most reason to cut.

Because everyone pays, no single farmer is disadvantaged by conserving.

A self-imposed price on a shared resource can beat regulation by keeping the cost internal and the businesses alive.

A University of Colorado team found fee-paying farmers cut groundwater pumping by about 30 percent, and those farms were not closing because of the cost. The aquifer had not fully recharged but early results looked promising, and farmers were discussing raising fees further. The researcher quoted suggested the valley could be a model for other groundwater-stressed regions.