Climate change creates a vicious cycle for water: Increased temperatures and prolonged drought lead to less precipitation and increased reliance on groundwater; reliance on groundwater leads to over-pumping and results in using water faster than precipitation can recharge it; over-pumping can lead to aquifer depletion and extinction. In parts of the U.S., the long-term survival of aquifers is endangered by these circumstances and is compounded by population growth and water rights. In Texas, 40 percent of the state’s groundwater comes from the Ogallala Aquifer, but to meet demand, the aquifer is pumped at over six times the rate of recharge.[1] Growing water vulnerability has prompted certain nonprofit organizations and agencies to use water trades with farmers to conserve and extend water sources.

Water trades are not new but have been slower to gain traction in Texas. Although there are different types, the overarching premise of water trades is that they manage water supplies according to priority by encouraging voluntary reallocations in return for compensation to, “produce more with less, facilitate better environmental outcomes, and cope with drought and climate change.”[2] In Texas, organizations are crafting water trades to boost water supplies, paying farmers to use their water rights to trade their water, or leave it in the ground. The Aquifer Resilience Fund established by Texas Water Trade, a conservation organization, uses funds from several agencies to help farmers reduce groundwater usage through finance agreements and investments in water efficient technologies. The Edwards Aquifer Authority also offers incentive programs like the Voluntary Irrigation Suspension Program which provides financial compensation for suspending use of all or a portion of their water rights.

For many farmers who have seen economic losses due to the drought, water trades are becoming a more sought-after solution. This year, losses in cotton, Texas’s largest crop, is expected to be $1.2 billion after payouts of federal crop insurance.[3] The economic repercussions are huge for the state, but the shockwave of losses goes beyond farmers, extending to businesses that support the industry such as cotton gin facilities and warehouses, neither afforded the luxury of crop insurance. Additionally, reduced crops mean abbreviated hours and workload impact staffing.

As Texas continues to grow, so will its demand for water. The survival of many communities is in jeopardy as overuse and drought continue to deplete resources. The dire circumstances will likely result in increased use of water trades and any other available means of conservation to foster the delicate balance between supplies and demands.

[1] “Texas Groundwater Supplies in Danger, Reports Say | Waterworld.” Water World, 18 Nov. 2021,

[2] Young, Richael. “Trading Water, Saving Water.” PERC, 19 July 2021,

[3] Naishadham, Suman. “Drought Takes Toll on Country's Largest Cotton Producer.” AP NEWS, Associated Press, 7 Oct. 2022,