The New Oil

Farmers in southern Alberta have always talked about water as the fuel that powers the quality, quantity and diversity of their crops. Now, however, competition is heating up for water. Towns, businesses and industries all want more, and in many cases they’re ready to pay for it.

Water isn’t just a crop input anymore. It’s becoming a potentially lucrative asset.

“Water has become a commodity,” says LeRon Torrie, a third-generation irrigation farmer from Grassy Lake, Alta., and chair of the St. Mary River Irrigation District. “In the long run I’m afraid water is going to be bid away from agriculture and we won’t be able to afford access.”

Although the St. Mary River Irrigation District has diverted its water for non-agricultural uses such as golf courses, Torrie has mixed feelings about the precedent that water transfers are setting. It hasn’t been a cash grab, he says. Instead, the district needs funds to keep its costly irrigation infrastructure up to standard.

In fact, for most irrigation experts, the best outcome is for farmers to maintain what they’ve got, let alone looking for more.

The dark irony, however, is that while farmers face an uncertain future, the outlook for the crops that irrigation can help them grow is booming.

“I’m hoping we will continue to see new processors coming to Alberta,” says Roger Hohm, head of the irrigation secretariat for Alberta Agriculture and Rural Development, “and that we will be able to access some of the crops that the southern U.S. can’t have anymore because of their population growth.”

Since 2007 the provincial government, in an attempt to manage the demand from Alberta’s growing population, has put a stop to issuing new water licences in the southern reaches of the South Saskatchewan River Basin.

That’s made municipalities and commercial groups go, cash in hand, to the province’s largest licence holders, including farmer-run irrigation districts, to buy a share of their existing water rights.

In some cases irrigation districts, many in need of funds to rehabilitate ailing infrastructure, have happily accepted.

This water transfer system — along with the province’s long-standing “first-in-time, first-in-right” system of water allocation that favours older licence holders — has opened the province’s irrigation sector to new scrutiny by those who say agriculture gets too much water. Farming accounted for 43 per cent of all water allocations in the province in 2007.

In response, the province’s irrigation farmers have aggressively adopted water efficiency practices. In fact, says Ron McMullin, executive director of the Alberta Irrigation Projects Association which represents the province’s irrigation districts, farmers have improved their water use efficiency by 40 per cent since 1970.

Still, farmers find themselves in a catch-22. The more efficient farmers get, the less water they use. But when farmers irrigate less, that leaves more water that can be used for non-farm purposes, which can in turn foster a feeling among non-farmers that they have a right to it.

Yet farmers need access to the water, even if they don’t always use it, because they have to meet tough standards demanded by crop processors.

A key challenge right now, says McMullin, is for irrigation producers and the provincial government to work together on ways of making water available to non-farmers, while ensuring that farmers get the water they’ll need now and in years to come.

“I think the irrigation industry will be very stable,” says Hahn. “I think we will see some minor expansion within the irrigated area.

Efficiency can backfire

Thanks to over a century of irrigation projects, Alberta calls itself the irrigation capital of Canada. The numbers back up the claim. Home to more than 8,000 kilometres of conveyance works servicing 1.6 million acres of both district and private irrigated acres, Alberta’s irrigated area represents 65 per cent of all irrigation in the country.

Virtually all of those acres are located between Calgary and the U.S. border. This region is home to 13 irrigation districts made up of farmers elected by district members to manage their irrigation works. Irrigation districts are also the key providers of domestic water to 48 Alberta communities and many farm water co-ops.

“The districts have always felt it was their responsibility to help supply the water needs of the rural communities in their district as well as the other agrifood producers such as the feedlots and food processors,” says McMullin.

Two major events led to the debate over water in the province today. The first was the province’s Alberta Water Act of 1999, which allowed irrigation districts to transfer their water to non-agricultural uses. In order to do this, districts must develop improved water management plans incorporating efficiencies intended to reduce water waste.

The second was the southern Alberta drought of 2001, which highlighted the water supply and which would eventually lead to the province’s decision to halt water licences in the South Saskatchewan River Basin six years later.

In terms of efficiency, McMullin says the irrigation community has adopted several practices in recent years to reduce water lost to seepage and evaporation. At the farm level, one of the most significant changes has been a switch from wheel moves and surface irrigation, in which a field is irrigated by flooding, to low pressure drop tube centre pivots.

Because of their large droplet size and proximity to the ground, these pivots, which are now used on over half of all irrigation acres in Alberta, have helped reduce evaporation and improve coverage.

At the district level, water efficiency has been improved by lining canals, replacing open ditches with pipelines and moving towards automated water flows.

Water the farm, or mall

Irrigation efficiency has improved to the point that, today, irrigation districts on average use just 61 to 65 per cent of their water licences. Some use as little as 52 per cent. Because of this, however, non-farmers are asking if farmers actually need their full allocation.

Pressure is increasing to share water with other users, including the irrigation of parks and other green spaces, but farmers argue in return that they can need their full allocations in dry years, and that when water can be saved and left in the river, it’s good for the environment.

“Averages are always good but you have to look at the extremes because those are the times you have to make some real management decisions in order to meet everybody’s needs,” Hohm says.

One of those extreme years was 2001, a year so dry that Alberta was barely able to meet its legally mandated 50 per cent minimum flow to Saskatchewan (in most years, 75 to 80 per cent of the water in the South Saskatchewan River Basin flows from Alberta to Saskatchewan). That year, the irrigation districts and Alberta Environment worked with municipal, commercial and other major water users to develop an assignment system in which senior users diverted some of their allocation to junior licence holders. The end result was that all users received 60 per cent of their typical water allocation.

“That hurt a lot of farmers in terms of not having a lot of water for crops but they were allowed to do some water trading within the districts to keep up yield and the quality of specialty crops like potatoes,” says McMullin.

Although that system worked well for one year, what would happen if the province had back-to-back dry years? That very question is driving Alberta’s review of its first-in-time, first-in-right system, as well as the irrigation districts’ ongoing efforts to develop policies to ensure that both domestic users and irrigation farmers are treated fairly.

The first priority of these policies, says McMullin, is to make sure that both humans and animals have access to drinking water in the event of a severe water shortage.

“The districts are not going to make it so you don’t have water to drink, water to brush your teeth or flush the toilet. It will never get to that point,” McMullin says.

However, once that base rate has been met, grey areas tend to pop up. “For example, should a processing plant get water before the producer?” asks Hohm. “It’s kind of a chicken or the egg thing. A processing plant hires about 300 or 400 people but if they don’t have any good-quality crops to process they won’t be open anyway.

“It all comes down to the fact that somebody has to make a decision as to what’s the best value of the water,” McMullin says. “That’s where it gets interesting.”

What price water?

With no new water licences, a water market has sprung up. The most prominent example of this was in 2008, when the Western Irrigation District sold a water rights for $15 million to the Municipal District of Rocky View to service a large mall and entertainment facility in Balzac, a hamlet located north of Calgary.

Environmental groups and others criticized the move, which they felt would set a precedent that would see water rights go to the highest bidder.

Water sales can be enticing for irrigation districts struggling to maintain old infrastructure. Although the provincial government provides 75 per cent of rehabilitation costs, McMullin says some districts still have infrastructure in fair to poor condition.

“The Western Irrigation District was way behind in the rehabilitation of its district and had very little resources,” says McMullin. “It now has significant funding to use government matching grants.”

Still, from his perspective as a farmer and as chair of an irrigation district, Torrie says that infrastructure rehabilitation will be a challenge. “The total we have in our annual rehabilitation budget with the 75-25 agreement is $10 million,” Torrie says. “That will put 20 kilometres of canal into pipeline. But we have hundreds of canals that require the same process.”

The real secret

With ongoing conservation, efficiency and productivity efforts, both Hohm and McMullin believe there is room for the irrigation sector to grow within its existing allotments over the next 10 to 15 years.

However, aside from the continuing debate over water licensing, the irrigation sector still faces some stewardship and efficiency challenges. One of these is water storage. Some in the industry would like to see more water stored during wet years to prepare for dry years, recognizing that any new storage would need to meet the water needs of communities, recreation, and wildlife as well as irrigators.

“That’s something that can be worked towards with policy in place,” says McMullin. “We have to work out what is good for Alberta, what is good for communities, the irrigators, the environment and the economy.”CG

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