California is in a severe drought, and the state’s famous agriculture industry–which uses about 80% of California’s water supply–isn’t helping. But you can’t necessarily blame the farmers; as in other states, California penalizes farmers who don’t use all of their allotted water rights, leading to a lot of waste.
A startup called SWIIM has a potential solution: a system that lets farmers lease water to other farmers–kind of like an Airbnb for water.
“Water is a real, tangible property right. It’s the highest valued asset on a farmer’s personal balance sheet,”says Kevin France, the CEO of SWIIM. Hence, there’s a real disincentive for farmers to conserve. If a farmer has say, 1,000 units of water and only uses a couple hundred of those units each year, over time the value of his or her water rights will decline. Here’s the hitch: Farmers don’t lose their water rights as long as the water goes to “beneficial use.” In this case, letting other farmers use the water counts as beneficial use.
One of SWIIM’s offerings is water optimization software that plugs in data about factors like crops and weather, asks farmers what they’re willing to do to conserve water, and spits out a response. Once the farmer knows how much water they’ll have left over, they can lease the excess water through SWIIM. “We provide protections to the farmer if he or she wants to conserve,” says France. “The farmers don’t lose water rights when they do this.”
You can see the apartment you’re renting on Airbnb, but you can’t see all the water on a farm property. Quantifying all of a farm’s water and figuring out how much is left to rent takes a lot of work on SWIIM’s part. The company charges for its services per acre-foot of water. And the farmers who rent out their water stand to make a lot of money, ranging from $200 per acre-foot to $450.
SWIIM is already operating in Colorado, and it just announced an arrangement with the Western Growers Association, which represents family farmers in California and Arizona who produce half of the country’s fruits and vegetables. As part of that arrangement, SWIIM services will be offered in water-starved areas like Coachella, where water will be leased back to the district, and the Salinas Valley. Ultimately, the association hopes that all participants will lease some of their excess water.
“This is going to be part of the solution to our water crisis,” says France.
Editor’s Note: The article originally stated that SWIIM has a partnership with the Western Growers Association. It actually has an arrangement.