Water is not currently allocated by price in most areas of California. As a result, farmers face wide disparities in price and availability. Efficiency of water use correlates strongly with the cost of water to the growers. Markets are emerging in California and at other locations throughout the American West in response to these factors, and also in response to increasing scarcity. The ability to market conserved water is a strong incentive to invest in the water conservation techniques and methods that can vastly improve the efficiency of water use in agriculture.
In 1996, NHI and project partners introduced the WaterLink electronic marketing system in Westlands Water District to reduce market transaction costs. Farmers have the opportunity to post bids and asks in a central location. Other farmers can then access this information to find a trading partner. Once two growers have agreed on the terms of a transfer, they notify the district staff via e-mail about the terms of their proposed trade. The district then completes the transfer process. Significant cost savings have been realized by the WaterLink system's ability to facilitate the transfer approval process.
Perhaps the most commonly-used feature of the WaterLink system in Westlands is the water ordering program. Growers can fill out and send the district an electronic form to order water deliveries to their farm. Well over half of all the irrigated acres in the district order their water via WaterLink. The district also reports cost savings from this feature.
In 1998, WaterLink was expanded to include ten additional water districts in the San Luis & Delta-Mendota Water Authority on the west side of the San Joaquin Valley. Users of the system include staff of the participating districts, authority personnel and USBR staff. The inter-district version of WaterLink allows district managers to receive on-line approval for proposed inter-district transfers. This feature of the system is quite popular since delay in receiving USBR approval for proposed transfers retarded development of a more active spot water market in this area.
