Thirsty cities routinely take obtain water from farmers either through market mechanisms (water sales) or through nefarious means, as in the notorious case of the city of Los Angeles capturing the entire flow of the Owens River. While cross sector allocation is an important strategy for overall water use efficiency, the opportunities for abuse also need to be addressed. Whose use takes priority? Is it simply "might makes right"? Or does water "flow uphill towards money"?
Water disputes are the domain of lawyers and, for international water disputes, of diplomats and skilled negotiators. Indeed, an entire branch of law -- water law -- has grown up around the need to bring clarity to the contested domain of water rights. The laws, and the interpretation of those laws, provide soultions to the inevitable disputes. But laws also change. People create laws and people can change those laws, albeit with great difficulty because of the complex vested interests involved. But where to laws come from? What is the basis of water law?
Lawyers might say the the basis of any law is a prior law, perhaps a customary law that was never written down. Anthropologists say that laws are expressions of social and cultural values about how things ought to be.
The water law found in the Western United States, including our home state of New Mexico, is based on the individual ownership of water rights, according to the principle of prior appropriation. The person who first lays legal claim to a certain amount of water, and who has regularly put that water to "economic use" (another value concept) is said to "own" that water and with the permission of the state authorities, he can also sell that water to someone else.
These concepts of individual water rights that can be sold to someone else, and put to a different purpose, had no cultural validity to Native American tribes. Water was part of nature and could not be owned by anyone. Today's American Indians are competing for water rights with their own lawyers, seeking to lay claim to water that was defined away from them long ago.
Resources
"Report on Agricultural Water to Municipal Use: The Legal and Institutional Context for Voluntary Transactions in Arizona" (from The Water Report, Dec. 15, 2008)