“Understanding Regional Ag Water Rates and the Impact on Farms”

Ag water rates

Ferndale, NY

Quick Facts

• Agricultural water rates vary depending on the region, crop type, and water source.
• The average agricultural water rate in the United States is around $2 to $5 per acre-foot.
• Water rates for agriculture can be significantly lower than those for urban areas.
• Irrigation districts and water cooperatives often provide water to farmers at a lower cost.
• Groundwater pumping rates can range from $10 to $50 per acre-foot.
• Surface water rates can range from $5 to $20 per acre-foot.
• Agricultural water rates can be affected by drought, water scarcity, and climate change.
• Water-saving technologies and practices can help reduce agricultural water rates.
• Agricultural water rates can impact crop selection, farming practices, and overall farm profitability.
• Government subsidies and programs can help farmers manage agricultural water rates and conserve water resources.

Table of Contents

• Ag Water Rates in Hawaii: A Guide for Buyers and Sellers of Agricultural Properties
• Types of Ag Water Rates
• Benefits and Drawbacks of Flat Rate Ag Water Rates
• Understanding Metered Ag Water Rates
• Ag Water Rates in Hawaii: The Impact on Buying and Selling of Agricultural Properties
• Tips for Buyers and Sellers of Agricultural Properties
• Frequently Asked Questions
• Resources and Links
• For Buyers and Sellers

Ag Water Rates in Hawaii: A Guide for Buyers and Sellers of Agricultural Properties

As a licensed real estate company in Hawaii, HawaiiEliteRealEstate.com has extensive knowledge about agricultural land and its unique water needs. In this article, we will delve into the world of ag water rates and explain how it affects the buying and selling of agricultural properties.

What are Ag Water Rates?

Ag water rates refer to the charges imposed by municipalities or counties on agricultural landowners for using water from their suppliers. These rates vary from one jurisdiction to another and can be influenced by factors such as water type, quantity, and location.

Types of Ag Water Rates

There are two types of ag water rates: flat rate and metered rate.

Benefits and Drawbacks of Flat Rate Ag Water Rates

Flat rate ag water rates can provide agricultural landowners with predictable financial expenses. However, they often come with one major drawback: excess water usage might not be fully cost-effective. Conversely, this rate can potentially give a much more stable financial market point vs variable rates. Here is a more in-depth look into flat rates.

Understanding Metered Ag Water Rates

Metered ag water rates, on the other hand, provide agricultural landowners with a more accurate representation of their water consumption. However, this type of rate can be associated with costly water meters and uncertainty. Here are some benefits and drawbacks of metered rates.

Ag Water Rates in Hawaii: The Impact on Buying and Selling of Agricultural Properties

Hawaii has a diverse landscape with various types of agricultural land. When it comes to buying or selling agricultural properties in Hawaii, ag water rates play a significant role in determining the market value of the land.

Current Situation on Oahu

On Oahu, the Honolulu City Council has established a flat rate of $35.16 per acre for agricultural water usage. However, when using a flat rate based upon pre-existing metering as opposed to an accurate water meter, landowners “cannot” be assured water will actually exist on land at any time prior to use. Conversely, the city will apply a per-gallon rate based on historical usage of $0.01154 when agricultural lands generate water usage that is above established basic rates – a matter we will talk about further below.

Current Situation on the Big Island

The Big Island has two different rates for agricultural water usage. For land in the South Hilo and South Kona districts, a flat rate of $45.86 per acre applies. In other districts, such as North Kona and Ka’U, agricultural landowners are subject to a metered rate of $0.05301 per gallon.

Current Situation on Maui

On Maui, the Maui County Council has established a tiered pricing system for agricultural water usage. For the first 10,000 gallons, a flat rate of $21.31 applies per acre. For water usage between 10,001 and 20,000 gallons, a rate of $30.49 per acre is charged. Usage above 20,000 gallons incurs a rate of $39.37 per acre.

Current Situation on Kauai

Kauai has a tiered pricing system for agricultural water usage as well. For the first 5,000 gallons, a flat rate of $50.74 applies per acre. For water usage between 5,001 and 15,000 gallons, a rate of $63.22 per acre is charged. Usage above 15,000 gallons incurs a rate of $75.94 per acre.

Tips for Buyers and Sellers of Agricultural Properties

1. Research is Key: Understand the ag water rates of the area you’re interested in buying or selling agricultural property.
2. Know the Costs: Consider not only the flat rate but also the potential costs associated with meters and meter maintenance.
3. Assess Water Needs: Evaluate the water needs of your agricultural land and make informed decisions about ag water rates.
4. Discuss Ag Water Rates with Your Real Estate Agent: As a buyer or seller, it’s essential to discuss ag water rates with your real estate agent.

Frequently Asked Questions:

• Q: What are ag water rates?
  A: Ag water rates refer to the cost of water used for agricultural purposes such as irrigation and farming
• Q: How are ag water rates determined?
  A: Ag water rates are determined by the water utility company or district and are based on factors such as the cost of water treatment and delivery the type of crop being grown and the amount of water used
• Q: What is the average cost of ag water rates?
  A: The average cost of ag water rates varies depending on the location and the specific water utility company or district but it can range from 10 to 50 per acre foot of water used
• Q: How do ag water rates compare to other types of water rates?
  A: Ag water rates are generally lower than municipal or industrial water rates because agricultural water use is considered a lower priority and is often subject to strict water conservation measures
• Q: Can ag water rates be negotiated?
  A: In some cases ag water rates can be negotiated with the water utility company or district especially for large agricultural operations or for farmers who are able to demonstrate significant water conservation efforts
• Q: What are some common billing methods for ag water rates?
  A: Common billing methods for ag water rates include volumetric billing where farmers are charged based on the amount of water used and flat rate billing where farmers are charged a fixed rate per acre or per month
• Q: How can farmers reduce their ag water rates?
  A: Farmers can reduce their ag water rates by using water efficient irrigation systems and practices such as drip irrigation and crop rotation and by implementing water conservation measures such as soil moisture monitoring and weather forecasting
• Q: What are some additional fees associated with ag water rates?
  A: Additional fees associated with ag water rates may include charges for water treatment and testing fees for water meter installation and maintenance and fees for administrative services such as billing and customer support

Resources & Links

• USDA Forest Service Watershed
• AG Water Wiki | AG Water Educational Wiki
• Streamflow alteration in the agricultural landscape
• Drinking Water State Revolving Fund Program | US EPA
• USDA – Irrigation Water Withdrawals
• Association of State Wetland Managers

For Buyers & Sellers

The Impact of Ag Water Rates on Home Buyers and Sellers
As a homeowner, navigating the complexities of agriculture water rates can be a daunting task. For home buyers and sellers, understanding these rates is crucial in making informed decisions when it comes to purchasing or selling a property with an agricultural water connection.

For Homebuyers:

• Hidden Costs: If you’re a homebuyer in an area with strict agriculture water rate regulations, you may face unexpected charges that can impact your monthly mortgage payments. In some cases, these costs can be substantial, making it challenging to qualify for a home loan.
• Reduced Space and Value: Agricultural water rates often emphasize the importance of efficient irrigation systems, which can limit the amount of space available for landscaping and outdoor living. This can negatively impact the resale value of the property, making it less attractive to potential buyers in the future.
• Opportunity Costs: The constraints on agricultural water usage can force homeowners to prioritize more traditional landscaping options, such as smaller gardens or lawns, which may not be as visually appealing to potential buyers.

For Home Sellers:

• Liability Concerns: As a homeowner, you may be liable for any agricultural water usage that exceeds the allocated amount. This can lead to costly fines and penalties, which can be a major deterrent for buyers.
• Marketability: Properties with high agricultural water rates can be less attractive to buyers, particularly those who prioritize water conservation and sustainability. This can impact the property’s resale value and marketability.
• Disclosure Requirements: Home sellers may be required to disclose agricultural water rate information to potential buyers, which can be a complex and time-consuming process.

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