What is a water subsidy?
A water subsidy is simply the difference between what a contractor is paying for water and how much this water is actually worth. But there are as many ways to calculate the value of a water subsidy as there are ways to figure the true cost of CVP water. We used three different definitions of “true cost:” • The Bureau of Reclamation’s “full cost” rate: Under the Reclamation Reform Act of 1982, farmers who receive CVP water for more than 960 acres of cropland are required to pay a higher rate than was originally stipulated in their contract. This rate is supposed to cover the “full costs” of water delivery, including CVP operation and maintenance charges, payments toward CVP construction costs, as well as partial interest on these capital costs. These rates vary significantly between each district, based on the distance the water must be transported among other considerations, and are calculated annually by the Bureau. In 2002 the average rate for all CVP districts overall was $38.93. D
