If farmers paid the full cost of water, they concluded, they would irrigate more efficiently. Some cities pay exorbitant amounts of money for just enough water to get them through a shortage, while farmers enjoy plentiful, cheap water supplies. The current water rights system was developed during the frontier days when there were fewer people, and most of them were farmers. The problem is it's still used today, in a century with extremely different water needs. Water supplies are rarely located where they are needed the most.
Current regulations encourage inefficient water use.
These regulations discourage farmers from practicing water conservation. As a result, in many areas municipal water users suffer chronic water shortages and governments enact severe water restrictions. Researchers Terry Anderson and Pamela Snyder estimate that if farmers could transfer just 5 percent of their agricultural water to municipal use, the needs of urban areas would be met for the next 25 years. Unfortunately, not every state allows transfers of surplus water - and in those that do, farmers are required to go through burdensome regulatory hurdles. Some government regulations intended to reduce agricultural waste have inadvertently contributed to urban water shortages.