Saturday, February 21, 2009

Improving the Allocation of Water

California often has water shortages. California also provides water to its farmers much more cheaply than it provides to households and non-farm businesses.

Basic supply and demand reasoning tells us that this form of farm subsidy makes California's water problems much worse than they need to be.

Today it was reported that (for a while at least) water in California would not longer be allocated so freely to farmers. That is great news for conservation, and efficiency!