Private and Institutional Adaptation to Water Scarcity During the California Drought, 1987-1992

This Staff Paper documents the responses of water users and water managers to the 1987-- 1992 drought in California, based on surveys of irrigation districts and irrigation equipment dealers in late 1991 and additional anecdotal information. The findings are consistent with predicted behavior as suggested by economic theory. The main findings are: (1) The use of water-storage reserves delayed necessary reductions in water deliveries. (2) Farmers responded to reduced water supplies in various ways, including increased ground-water pumping, adoption of more costly water-conserving irrigation technologies and management practices, and changes in land use by switching to higher value crops or fallowing low-value field-crop acreage. (3) The continuous drought led to institutional changes at the Federal, State, and waterdistrict levels, such as introduction of incentives for water conservation, establishment of a framework for water trade, and provisions for agreement between water suppliers and water users concerning actions to be taken by each. The nature and intensity of the response varied by the agro-climatic region within California, since soil and weather conditions affect cropping patterns and the ability of farmers to adapt existing water management practices to drought conditions.