Commissioner Mary Lou Peterson says without water rights, land is useless for agriculture.
In an agricultural county that’s already experiencing water shortages, it’s worrisome to see water rights sold downstream, local officials say.
In Okanogan County in north central Washington, there have been several instances recently, where orchards came up for sale and the water rights for the property were sold to developers or growers further south on the Columbia River. Gerry O’Keefe, Columbia River policy coordinator with the Washington State Department of Ecology, said when there are no new sources of water or new permits being issued, users are forced to rely on place-to-place transfers.
Scott Furman, Okanogan County assessor, said western water law allows water rights to be separated from the land and sold separately to other users on the same river. If this were to become widespread, the long-term health of the northern counties could be at stake, he said. "I believe if water continues to be sent south, we’ll just turn into a northern Nevada."
For example, in April 2006, orchardist Ray Colbert sold 80 acres of land at Tonasket, including about 60 acres of Red and Golden Delicious trees, to a company called Cal-Neva, LLC, of East Wenatchee for $121,000, according to the Okanogan County Assessor’s office. Two months later, Cal-Neva sold the same piece of property to Wallula Vineyard, LLC, in Grandview, Washington, for $220,000. Andy den Hoed, co-owner of Wallula Vineyard, said he bought the property to acquire additional water rights for his vineyards and has been leasing the property to a person who plans to buy it.
When Furman became aware of that sale, he alerted the county commissioners. "I think more people need to be aware of this," he said. "It doesn’t seem to be much of an issue to the southern counties, because they’re the ones that benefit from it."
Looking at the larger picture, it’s possible that water rights from the state of Washington could be transferred to users along the Columbia River in Oregon, he said. "It just keeps going south."
County Commissioner Mary Lou Peterson said property in Okanogan County that no longer has water rights either sits idle or is divided up for development with wells drilled for water. Without water, it is useless for agriculture. Water rights can be transferred downstream, but not upstream, and since Okanogan County abuts the Canadian border, there is no way for water rights to be transferred into the county.
"We’re at the end of the line," she said. "We have nowhere upstream to get future water rights for the county."
The Okanogan area has been losing orchards for a number of years. Although the economics have improved for fruit growers, some are still struggling because of labor shortages, higher costs, and weather damage, Peterson said.
"Farmers are struggling, so they see that the only way they can make some money off their property is to sell their water right and then try to sell their land separately."
She acknowledged that the property owners have a right to sell their property—and water rights—to the highest bidder, but the problem, as she sees it, is that when the water right is transferred from a piece of agricultural land, it is gone forever. The land can never be replanted without water.
Part of the problem, she said, is that the Department of Ecology has been allowing changes in use for the water so that water rights from agricultural land can be used for housing developments or golf courses.
Colbert said he believes people should be allowed to transfer water rights, although he understands why some people object to it. "I went through a lot of expense and trouble to get those rights and maintain them, and I think that they should be able to be transferable. It’s part of your estate, so to speak."
However, when he sold the orchard, he worked through a real estate company and did not know why Cal-Neva wanted to purchase it. He had looked into selling the water rights but found that they were not worth more than the value of the orchard and if he sold the rights he could nothing with the land without water.
Colbert said many of the water rights in Okanogan County are owned by irrigation districts, and there are few parcels of land that have independent water rights. "So, it’s not like they’re going to dry up the county."
During its last session, the Washington State legislature allocated $150,000 for an independent study on the issue of transferring water from northern counties to southern counties. Evan Sheffels, special assistant for water policy at the Washington State Department of Ecology, said there are upstream users who want to maintain their ability to sell their water right downstream unencumbered, while others are concerned about the tax base being eroded if the agricultural community declines and farmers stop doing business at hardware stores and implement dealerships.
As water gets more scarce, users downstream are looking for more water, and, generally, water markets are a good answer to water scarcity, Sheffels said. "This is just a question of how do you make them work in a manner that’s fair for upstream and downstream users. It’s a very complicated issue, and it’s got multiple sides to it."
The study will look at the kinds of mechanisms that other states have used to address similar issues, and the department will report back to the legislature before the 2009 session.
Peterson said if Okanogan County had a water bank system, it might be possible for growers to obtain water to plant new orchards. "There needs to be some kind of system in place to protect agriculture."
Furman, the assessor, said he does not think the practice of buying land for its water rights is widespread in Okanogan County. There was a recent proposed sale of water rights from a 120-acre orchard in Okanogan County to three different buyers, including the developer of a large, upscale residential development and resort in East Wenatchee. The sale fell through when the Farmer’s Home Administration foreclosed on the property.
Mike McDaniel, owner of John L. Scott Real Estate in Omak, Washington, said he doesn’t know of many cases where water rights have been sold to buyers elsewhere. "I think there’s been more talk about that than things happened. I think the county—because of the talk—is attempting to stop that because Okanogan County would totally dry up. Right now, water rights are almost worth more than the land is because the farming is not that great."