The Cotton Club

Posted on February 17, 2006
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Next time you read about Arizona’s looming water “catastrophe,” take a drive south on I-10 and look at all the cotton farms. In 2004, the federal government spent $64 million subsidizing cotton in Arizona, a water-intensive crop better suited to Mississippi than the Sonoran Desert.

The problem is that political meddling keeps the free market from directing the water supply to the right place at the right time. Government subsidies keep water prices artificially low for farmers, encouraging over-consumption and inefficiency. In Arizona, between 70 and 80 percent of available water is poured into crops like cotton, corn and apples, rather than homes and industry.

Ending water welfare would solve possible water shortages. By letting water prices rise, farmers would be given an incentive to eliminate marginal crops and sell water to meet residential and business demands. One study found that shifting just five percent of agricultural water to municipal uses would satisfy urban needs for the next 25 years.

Wise water policy starts by allowing market prices to deliver water where Arizonans need it most, not by a government-run cotton club in the desert. Supply and demand will keep Arizona’s whistle plenty wet.

Key Links:

-Property and Environment Research Center: “Water Marketing”
-Gary Libecap: “The Problem of Water”
-Environmental Working Group: “Farm Subsidy Database”

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