Katie Fisher
Published May 20, 2025
By Katie Fisher
“My name is Katie Fisher, and I have completed a Bachelor's degree in Economics and Environmental Systems Science in May 2025.
Thousands of lawsuits, arbitrations and negotiations regarding water rights are going on in the agricultural sector, and most of them come down to the ‘doctrine of prior appropriation’. Water rights in the Western United States are based on a system of senior and junior users. Senior users are those who established a piece of land or a water right earlier than those who are known as junior users, and the senior users have first call to that water, especially in times of drought. This system is also known as known as “First in time, first in right”.
In recent years the US government has backdated the appropriation rights for Native Americans, creating a lot of uncertainty and muddling the sequence of land ownership when it comes to prior appropriation. This is the result of the Big Horn adjudication, with 37 years the longest adjudication the state of Wyoming has ever seen. It affirmed tribal rights for water use on the Wind River Indian Reservation, which was granted an 1868 appropriation date. This backdating essentially guarantees water even in the face of drought or other interests. However, the water may be used only for agricultural purposes.
Wyoming’s Wind River Indian Reservation, home to the Northern Arapaho and the Eastern Shoshone tribes, is located in Fremont County, which irrigates 1.3 million acres annually. Irrigation systems are composed of thousands of miles of infrastructure, such as ditches, canals, and boxes. All these pieces and parts require regulation as the water that flows through the irrigation networks impacts water rights downstream.
Based upon surveys and consultations, within the reservation 344,000 acres were designated as practicably irrigable acres, essentially acres that could go into irrigation any time. It is estimated that only 30 to 40% of these are used every year. Complete use of the practically irrigable acres presents a huge opportunity for agricultural production and increase in land valuation. An additional 263,000 acres that were reserved for future use are also earmarked with the 1868 appropriation date, none of which have been used.
40,000 permits were designated due to the outcome of the adjudication. Most of them were granted, however, there has been little to no economic development. This is exemplified by two case studies on diverting water through tribal water uses, Left Hand Creek and Dry Creek. Left Hand Creek shows a rather constant rate of diversion since 1992. Given the allocation of the additional permits, an exponential increase in diversions could be expected, but there has actually been an overall 5% reduction in acres watered off of this ditch since 1992.
The second case study on the reservation is Dry Creek. It consistently faces dry conditions, which has been exasperated by poor infrastructure. The number of acres watered using this Creek has not changed since 2001. Any increase in water delivered, even if diversions were to be increased, are not likely to impact the yield or production of agriculture on in this area due to the stagnant acreage enrolment.
Despite the permits being allocated with an 1868 appropriation date, there has been no increase in the number of acres going into production based on these two creeks, which should be fairly representative of the entire reservation.
In a cost-benefit analysis of implementing infrastructure, increasing accessibility is a multi-faceted topic. One of the biggest issues is the initial implementation of infrastructure. Senator John Barrasso addressed this a decade ago when requesting federal funding for the Wind River Irrigation project. The first phase was approved, however, a Government's Accountability Office report found that construction was not completed, and by 2014, there was a $77.1 million maintenance backlog. A current estimate is $95 million to complete the initial stages of infrastructure implementation.
Today’s irrigated land on the reservation is almost exclusively surrounded by rangeland. Converting it to irrigated land costs an estimated $1,750 per acre. Taking into account typical irrigation practices and future revenue projections it's very likely that these areas could finance the annual operational efforts.
My baseline model for evaluating the benefits of water delivery contains some assumptions: The water will continue to be only for agricultural use. With the 1868 appropriation date, we can essentially guarantee water delivery. We can assume that water will go to the highest value use, in this case a specific crop.
Hay, mostly alfalfa, constitutes a majority of the crop revenue in Fremont County. Alfalfa is at a higher risk for their users running out of water, and there's an increased amount of labor and capital due to two to three annual cuttings. On the other hand, it does have a higher market value, an opportunity for revenue generation. Cost can be fairly high, but the five- to ten-year lifespan can reduce certain amount of investments leading to higher net income. Combining these factors and the guaranteed water availability, farmers have the opportunity to seed the most probable crop without concern for water.
If all of the practically irrigable acre water designated were to be used, an extra 64,000 acres could go into production, leading to a net revenue of over $36 million every year in crop production alone. By a fairly conservative estimate, there's a potential to recover initial costs by the end of year four.
The final piece of the benefit analysis is the value that's added to land parcels due to the attached water right. In 2023, an acre of irrigated cropland sold for $3,000 while non-irrigated cropland sold for just under $1,000 per acre. The rent of irrigated cropland was over four times that of non-irrigated cropland thanks to its increased productivity and profit. It's very possible for farmers to rent out their irrigated cropland and raise capital for farming expenses to become self-sustained.
Overall, there's a huge transformational potential when legally established water rights are used. $95 million is a substantial investment for the initial implementation. However, the 2006 Governments Accountability Office reported a construction deal by the United States government that was never completed, and it's very likely that this lack of follow-through has limited economic development on the reservation.”
Further reading: Katie Fischer. Evaluating Economic Outcomes: Big Horn Adjudication and Water Use on the Wind River Indian Reservation. Management summary written as part of the Summer Undergraduate Research in Economics (SURE) Program