Colorado farmers still own more than 80 percent of water flowing in the state, but control is rapidly passing from them as growing suburbs move to secure supplies for the future.

The scramble is intensifying as aging farmers offer their valuable water rights to thirsty cities, drying up ag land so quickly that state overseers are worried about the life span of Colorado’s agricultural economy.

“The status quo has been going to agriculture (interests) and buying and drying. That’s not good,” said John Stulp, a cattle rancher and former state agriculture commissioner who is Gov. John Hickenlooper’s special policy adviser on water. “We need to do it in a smarter way.”

Since 1987, Colorado farmers and ranchers have sold at least 191,000 acre-feet of water to suburbs, according to a review of water transactional data. (That’s enough water to fill Chatfield Reservoir nine times— and enough to sustain 382,000 families of four for a year.)

The shift has been especially abrupt north of Denver, where farmers sold water to suburbs at a rate of 2 to 5 percent of available water each year, according to the Northern Water Conservancy District.

State water courts in the South Platte River Basin, which includes Denver and Weld counties, approved farm-to-urban change-of-use petitions in 41 different cases between 2002 and 2007, state records show.

In the process, about 400,000 acres in Colorado dried up between 2000 and 2005, according to U.S. Geological Survey data. And Colorado natural resources planners anticipate losing another 500,000 to 700,000 acres of irrigated cropland by 2050.

Officials worried

Trading farmland for suburban lawns worries officials.

“Water and agriculture are critical for the rural economy to flourish,” Hickenlooper said. “Unlike many other states, and even some nations, we have the potential in Colorado to provide a sustainable food supply that is local and not imported. That’s an asset we need to recognize and support.”

Yet nothing is stopping the ownership shift. Long-envisioned cooperative transfers, with farmers leasing water to suburbs while retaining control, have not materialized.

Instead, suburban water managers — and their agents — are venturing as far as mountain valleys 100 miles away to acquire new water supplies, sometimes backed by state government agencies.

“It’s a good time to acquire water rights,” said veteran water broker Jerry Kessel.

Two Rivers, a company traded on the New York Stock Exchange and run by Colorado Springs real estate and water broker Gary Barber, recently purchased two old reservoirs and significant senior water rights from Arkansas River Basin farmers.

Barber said he aims to save farming by trapping water flowing off the Spanish Peaks and using it for its court-decreed purpose of irrigating crops.

Southern Colorado farming communities that died could now come back to life, Barber said, because booming nations such as China soon will be looking for new sources of grain.

“Look at the price of corn now,” he said. “It’s going up faster than the price of gold.”

Water for suburbs

State natural resources officials backed Two Rivers by granting a $9.9 million low-interest loan to support reservoir rehabilitation.

But farming groups immediately identified Two Rivers’ buy-up as a stealth move to shift more water to suburbs.

“You get kind of nervous when you have people who are on the New York Stock Exchange saying they’re going to put agriculture back into production,” said Jay Winner, manager of the Lower Arkansas Valley Water Conservancy District, devoted to retaining farming water rights across a five-county area.

“I’m skeptical,” Winner said, “because from the amount of money they’re sticking into this project, it looks like it’s a big agriculture-municipal transfer.”

When pressed, Two Rivers’ Barber acknowledged that the $27 million deal was indeed done with an eye toward eventually selling water to suburbs.

The stealthy and not-so-stealthy shifting of control over Colorado water has continued despite economic doldrums and may be gaining momentum. Farmers often are willing participants, cashing in as relative scarcity makes water more valuable.

Among recent deals:

• Pueblo bought the Bessemer agricultural canal.

• Aurora, Thornton, Brighton and Adams County invested in the Fulton Ditch northeast of Denver.

• Cherry Creek and Arapahoe County water authorities, though still facing court scrutiny, have staked claims to water once allocated for farming.

Also, in the Colorado Springs area, the Donala Water and Sanitation District, which bought a 711-acre ranch near Leadville for its water rights, now is pursuing a change-of-use ruling in state court so that farming water could be harnessed for Front Range housing and lawns.

Similarly, satellite cities Fountain and Widefield spent $3.5 million to acquire developer Mund Shaikly’s 480-acre H2O Ranch at the base of the Sangre de Cristo mountains. The plan is to sustain an anticipated military housing boom by using mountain creek water that once irrigated hayfields.

Fountain will let the creek water flow into the Arkansas River, then trap it in Pueblo Reservoir, said Fountain water engineer Curtis Mitchell. “Certainly we’re not in the land business.”

North of Colorado Springs, Woodmoor’s new 1,900-foot-deep municipal wells appear uncertain enough that suburban leaders are mobilizing to buy water rights from farmers in the Arkansas River Valley and plan to construct a delivery pipeline.

Along the Arkansas River, state records indicate suburbs petitioned courts at least 116 times over the past decade to convert agricultural water for municipal use.

State court administrators say they didn’t track outcomes in those cases. However, the impact in the Arkansas basin has been clear: One in six of the 450,000 acres that was irrigated in 1970 no longer produces crops.

Colorado has reached a turning point, some water authorities say, because there’s no longer enough water available to sustain both farming and an expanding suburban population.

“It’s a big mistake”

State planners project a shortfall of up to 1 million acre-feet of water by 2050 if Colorado’s population of 5 million doubles as expected.

“It’s a big mistake to be doing massive transfers. We’ve got to produce food,” said Pat O’Toole, president of the Colorado-based Family Farm Alliance. “Denver’s going to double, and so is India and China and everybody else. What are we going to do to feed people if we keep taking agricultural land out of production?”

One solution Stulp and Hickenlooper are pushing is so-called “alternative transfers.” The idea is that farmers who still own water band together and lease some of that water to suburbs each year. A few fields would have to remain unplanted each year.

The sticking point has been that suburban water suppliers contend they must own water outright to guarantee supplies sufficient to sustain population growth.

“If the farmers own it, and you have to rely on getting the water from farmers, what security do you have?” said Rod Kuharich, director of the South Metro Water Supply Authority, which represents 15 Denver-area suburbs that currently draw 60 percent of their water from groundwater wells.

“You would need to own the water and lease it back to the farmers,” Kuharich said. “Then, you know water is there when you need it.”

So the upshot is that suburbs and water brokers are scrambling, offering willing farmers up to $15,000 per acre-foot of water.

Sometimes brokers must be persuasive. But sometimes farmers and ranchers in their 70s, seeing no children poised to take over their operations, are the ones proposing to sell out.

Regardless of who initiates the deals, “we’re drying up agriculture,” said T. Wright Dickinson, a northwestern Colorado rancher and former Moffatt County commissioner.

Dickinson pointed to the example of Arizona, which had 500,000 acres of irrigated cropland after World War II but today — after using water to enable suburban development — has one tenth that acreage to grow food.

“I don’t believe that it was a good or sustainable choice, because it’s important to be able to feed and clothe people in this world,” Dickinson said. “The people of Colorado get this.”

Bruce Finley: 303-954-1700 or bfinley@denverpost.com