• water economics;
  • irrigation;
  • institutions;
  • water policy;
  • water conservation;
  • sustainability

Abstract:  The Rio Grande basin shares problems faced by many arid regions of the world: growing and competing demands for water and river flows and uses that are vulnerable to drought and climate change. In recent years legislation, administrative action, and other measures have emerged to encourage private investment in efficient agricultural water use. Nevertheless, several institutional barriers discourage irrigators from investing in water conservation measures. This article examines barriers to agricultural water conservation in the Rio Grande basin and identifies challenges and opportunities for promoting it. Several barriers to water conservation are identified: clouded titles, water transfer restrictions, illusory water savings, insecure rights to conserved water, shared carry-over storage, interstate compacts, conservation attitudes, land tenure arrangements, and an uncertain duty of water. Based on data on water use and crop production costs, price is found to be a major factor influencing water conservation. A low water price discourages water conservation even if other institutions promote it. A high price of water encourages conservation even in the presence of other discouraging factors. In conclusion, water-conserving policies can be more effectively implemented where water institutions and programs are designed to be compatible with water’s underlying economic scarcity.