Airbnb for Water

How an obscure startup could help solve California's water crisis.

Could the sharing economy help solve California's water woes? Don't laugh. A new tech startup has come up with a way to let farmers lease their extra water, much in the same way Airbnb enables homeowners to rent out their spare bedrooms. It's being tested statewide this month in a joint venture with Western Growers, a trade group whose farmer-members produce half the nation's fruits and vegetables.

"It is scarily similar to the sharing economy we've seen in other areas," says Kevin France, CEO of Sustainable Water and Innovative Irrigation Management (SWIIM), the startup behind it all. "You are in essence quoting the availability of water and providing it to someone who needs it."

By allowing farmers to sell their water more easily, SWIIM may have found a way to fix one of the most vexing problems with the California water crisis: Even as urbanites and some farmers have been forced to severely cut back, many other farmers, typically those who hold the most senior water rights, flood their fields with little regard for efficiency. SWIIM estimates that farmers in California and Colorado on average waste 25 percent of their water, enough to supply all of the city-dwellers, and then some.

Some farmers already sell their water during droughts, but they usually face a choice between completely fallowing a field while leasing out the water it would have needed, or continuing to farm it and leasing out no water at all. Using proprietary software and a network of soil moisture sensors, SWIIM offers farmers an attractive third option: They can keep farming while implementing efficiency measures such as drip irrigation or deprivation growing, and then lease out the water they save for profit—or, as SWIIM's promotional video puts it, they can boost income "by farming their water, as opposed to just farming their land."

The new software makes it easier for farmers to sell water they save, giving them an incentive to conserve.

If you're surprised that this requires remote sensors and software applications, well, welcome to the screwy world of Western water law. Under the doctrine of "beneficial use," water-rights holders can permanently lose access to whatever portion of their water that they don't consistently consume. That's one reason farmers are notoriously resistant to conservation. Conserving water does count as a "beneficial use," but calculating the amount conserved from, say, switching from flood irrigation to a drip system is incredibly complicated. The portion of the water that has historically seeped off the farm into an aquifer or river actually belongs to someone else and can't be counted as "conserved." In other words, slashing a farm's water use by 20 percent doesn't necessarily mean you can lease out that amount to someone else.

That's where SWIIM comes in. Using data from irrigation districts, field instruments, weather reports, satellites, and low-altitude flights, its software calculates in real time how much of a farm's water is consumed and how much returns to underground flows—ensuring that farmers don't jeopardize their rights if they choose to sell their conserved water. The software also crunches data on water prices and a farm's soil and crop types to recommend the most profitable mix of crops and leasing in a given year. In dry years when demand for is high, it might suggest freeing up water by installing drip irrigation, growing different crops, reducing the water allocation for certain crops, or fallowing the least productive fields.

Once a farmer plugs in how much water he wants to unload, that information becomes available to water managers, who can then offer the water to farmers, companies, or urban water districts. (SWIIM makes its money by taking a commission per unit sold.) The farmers earn $200 to $450 per acre-foot—the volume of water that would submerge one acre of land by one foot. "It provides an incentive for conservation," France says, and "that is probably one of the biggest things missing from this equation."

When "land comes out of production, it affects the sprinkler manufacturer, it affects the grocery store guy, it affects the local auto repair shop,"

France got the idea while working as a water broker in 2008, when he helped an investment group purchase permanent rights to a billion gallons of water from farmers in a small town in northeastern Colorado. The practice, known derisively in farming circles as "buy and dry," removed those fields from cultivation forever, devastating the local economy. More recently, large-scale farm-to-city water leases from California's Imperial Valley been equally contentious.

"When that land comes out of production, it affects the sprinkler manufacturer, it affects the grocery store guy, it affects the local auto repair shop," France says. "I saw it with my own eyes. I thought that there was a better way to do it. That's what led me to start SWIIM, to find a solution that wasn't black and white."

Developed in partnership with the US Department of Agriculture and Colorado State University, SWIIM started out in Colorado, where it's been deployed on about 10,000 acres. With the West Coast drought in full swing, the company is now putting some 80 percent of its resources into California. It will roll out pilot projects this summer in Kern County and in the Sacramento, Coachella, and Imperial valleys. As with Airbnb, the proof of concept will be in the paychecks: "The goal," France says, "is to get it deployed, use it, and allow these users to actually be paid."