When Water Picks Winners: Irrigation Rights and Farm Structure

Farm consolidation is often attributed to the possession of unique resources that increase productivity and reduce production risk. Water rights are an example of such a resource, increasing revenue generating potential while mitigating production risk. Using administrative groundwater records from Kansas spanning 1990–2021, we evaluate how groundwater rights influence correspondent survival and consolidation. Flexible parametric survival models indicate that correspondents holding larger and more senior groundwater rights experience lower hazards of exit. A 100 acre foot increase in groundwater allocation reduces the hazard of exit by 1.98%, while a ten-year increase in water right seniority reduces the hazard by 3.87%. Consistent with these survival patterns, groundwater ownership has become increasingly concentrated through time, with the top 10% of correspondents now controlling 38% of water rights and 55% of authorized groundwater allocation. These findings suggest groundwater rights confer a competitive advantage that contributes to consolidation dynamics.