Mises Wire

Home | Wire | Former Water Bureaucrat: End Water Subsidies and the Bureau of Reclamation

Former Water Bureaucrat: End Water Subsidies and the Bureau of Reclamation

05/20/2015

Dan Beard used to be commissioner of the US Bureau of Reclamation. Now he's calling for the Bureau of Reclamation — the government agency that built dams throughout the west and controls water allocation to this day — to be abolished. The problem? He says that water subsidies and the lack of real prices in water are at the heart of it. He's now the author of the new book Deadbeat Dams

From his recent interview with Colorado Public Radio

"America is facing a water crisis and nowhere is this more evident than in the West where significant problems abound," he writes. "The western United States is struggling to survive a fifteen-year drought that is the worst in nearly a thousand years."

Beard pinned much of the blame on federal subsidies to agriculture. He said while farming has become more efficient, it still wastes a "monumental" amount of water because subsidies disincentive improvements. 

"We heavily subsidize the delivery of water to agricultural interests in the West from federal facilities. What do I mean by that? I mean it costs us $100 to deliver an acre foot of water and we charge the farmers $2. Who picks up the other $98? And the answer is, it's you and me. Generally, the water that is delivered to communities throughout the West, throughout the nation is not subsidized to the extent that it is for agriculture." 

"The single most-important change that we can make is to eliminate subsidized water. We will permanently alter the water world for the better if we do that. Policy makers at every level, that means local, state and federal level, have to begin to accept the principle that those who want to use a scarce resource like water should pay the full cost." 

"Every study that's undertaken shows that there is enough water. Problem is that it's just distributed incorrectly. And once you start pricing it, you will stop wasting it." 

"It is the most uncreative field I can think of. I mean, we sent men to the moon, put cell phones in the hands of billion of people across the globe, and yet ... the primary things we're using to deliver water are surface storage and gravity. At some point we're going to wake up and adapt new technology and new tools and new ideas to the delivery of water. And I think the key to that is when it's priced correctly." 

Naturally, growers and other agricultural rent seekers would vehemently oppose such a move. As I've noted here and here, the whole allocation system of water in the west is based on politics, and not at all on market pricing. The growers who have political clout — who Beard calls "the Water Nobility" get cheap water, and everyone else (i.e., the taxpayers and city dwellers) picks up the tab.

Beard zeroes in the basic problem behind allocation, which has been discussed repeatedly here at Mises.org: water is not priced in any meaningful way. He  notes in the interview that "once water is priced anywhere near its real price, then we've begin to see real change. Yes, the crop mix will change, and some farmers will go out of business. but other farmers will make more money."  

Author:

Contact Ryan McMaken

Ryan McMaken (@ryanmcmaken) is a senior editor at the Mises Institute. Send him your article submissions for the Mises Wire and Power and Market, but read article guidelines first. Ryan has a bachelor's degree in economics and a master's degree in public policy and international relations from the University of Colorado. He was a housing economist for the State of Colorado. He is the author of Commie Cowboys: The Bourgeoisie and the Nation-State in the Western Genre.