GIANNINI FOUNDATION OF AG ECONOMICS: Stuck in the mud: Groundwater markets struggle to gain traction under SGMA

By Liz Saunders and Ellen M. Bruno

Across critically overdrafted groundwater basins, groundwater market development has faced significant hurdles. These include challenges with determining allocations and resistance to trade due to fears of consolidation and the loss of small-scale farming.  As a result, we find that there has been minimal progress, despite the fact that trading could substantially reduce the costs of SGMA compliance and maintain more land in agriculture.