Editor's note: This reporting was supported by the Institute for Journalism and Natural Resources. It was published in collaboration with The Daily Yonder.
Steven Fulstone knows what it means to move water on and off farmland. It’s September, nearing the end of the irrigation season for the Walker River, and the sixth-generation rancher is driving his blue truck around Smith Valley. Fulstone describes the bright green alfalfa field in front of us as the valley’s “heartland,” with good soils that he wants to keep in production. “I had enough surface water rights to transfer it onto this property,” he says.
But over the past year, he’s participated in transactions that have gone in the other direction. On the other side of the valley, Fulstone stops in front of a parcel covered in golden-hued vegetation. Take water away from an irrigated field, and you see a dramatic change. “You’re looking at 116 acres of land where the primary underground water rights were relinquished,” he tells me.
The patchwork of irrigated and fallow land foreshadows a difficult future for agricultural valleys across Nevada and the West, where policymakers and irrigators are looking for new ways to address water overuse. For decades, irrigators in Smith Valley and elsewhere have pumped groundwater far faster than it could be replenished, causing declines in water storage and depletion of river flows.
Across the state, the declines have prompted officials to threaten shutting off wells — and farmers and communities to engage in costly legal battles. They’ve also given rise to locally based efforts to conserve and test once-unthinkable ideas as solutions to use less water.
It’s one of the main reasons Fulstone, with generational ties to farming in the valley, participated in a pilot program to reduce the amount of groundwater that could be pumped in Smith Valley.
“You don’t want to mine water,” he says. “Number one, we’re in the business for sustainability, and regenerative, sustainable practices mean you want to be able to sustain that aquifer.”
SMITH VALLEY SITS at the western edge of Nevada and the Great Basin, where rivers such as the narrow Walker drain into closed “terminal” lakes. Farming here already faces water stress from a legacy of overuse that has pushed Walker Lake to the ecological brink. Water demand is not only coming from agriculture. Housing and industrial development have created new pressures, too.
Beneath it all are the cumulative effects of groundwater pumping.
Groundwater is what some scientists call a blind resource, making it difficult to manage. With advancements in drilling technology and the proliferation of rural electricity after World War II, groundwater pumping increased dramatically across Nevada and the rural West in the 1950s and ’60s. Facing political and economic pressure, Nevada water officials issued more rights to pump groundwater than was sustainable in many parts of the state. The effects of groundwater overuse were evident even a few years later, but Nevada regulators often avoided taking action to curtail use.
In 2023, the state tried a new approach. It used federal funds to launch a $25 million pilot program to facilitate the purchase and retirement of water rights. It was seen as a win-win, and the demand exceeded expectations. Irrigators, including Fulstone, received compensation for voluntarily giving up groundwater rights — an asset more valuable than land for many farmers — while state water officials achieved a pressing goal of reducing groundwater overuse.
The Walker Basin Conservancy received $4 million to retire groundwater in Smith Valley. The remaining funds went to pilot programs in the Humboldt River Basin, Central Nevada, and Southern Nevada, all areas where conflict over groundwater aquifers has simmered for years.
Where once Fulstone held a permit to apply groundwater to the dry land he showed me, it is now marked on the state’s water rights ledger with the simple abbreviation “RET,” for RETIRED.
Overall, the state has used the federal funds to retire about 22,500 acre-feet of water, roughly the same amount of water Nevada was required to cut from its Colorado River allocation last year.
“Across these different pilot programs, we received significantly more interest than we were anticipating,” says Brandon Bishop, a program manager at the Department of Conservation and Natural Resources, which houses the Division of Water Resources and oversaw the program.
There was so much demand that two bills, passed unanimously by the Democratic-controlled Legislature and signed by Republican Governor Joe Lombardo in 2025, allow for the expansion of the program.
Carlie Henneman, water program director at the Walker Basin Conservancy, was shocked by the interest in the pilot program. In the Walker River Basin alone, the conservancy received 16 applications to retire water valued at about $35 million, far exceeding the funding available.
In early September, Henneman gives me a tour of Sutter Ranch, the conservancy’s Smith Valley headquarters, which doubles as demonstration land for nursery facilities, native seed plantings, and restoration projects. The sales surprised her, she says, because “groundwater is a valuable asset, especially in these places where surface water can vary so much from year to year.”
DEMAND FOR RELINQUISHING groundwater was especially high in areas of the state where diminishing supplies have led to conflict over water use. One of those hot spots includes Diamond Valley, where Denise Moyle farms alfalfa.
After skepticism and hesitation — and asking many, many questions — Moyle, who farms with her sisters Deanne and Dusty, sold back several groundwater permits to the state.
“It’s been a very positive experience,” Denise says. “We have had neighbors come to us and say, ‘I really wish we would have done it.’”
Denise grew up in Diamond Valley and was appointed the family’s “water person” several years ago as state officials focused on reducing use in the valley, where irrigators pumped more than two times the volume of water set as a sustainable cutoff by the state. In 2015, the state designated Diamond Valley as a Critical Management Area, which required farmers to develop a plan to cut back or face state action — a curtailment of wells through a system that many worried would put many farmers out of business.
The valley’s irrigators ultimately voted on and adopted a groundwater management plan. The plan aims to reduce use through a shares-based system that spreads cuts out over time and includes all the valley’s irrigators. Since the plan was implemented and irrigators have had to operate with tighter budgets, they have looked for ways to reduce use while keeping land in production, some applying new tools, such as more efficient sprinklers. But when the opportunity came to sell groundwater back to the state for $800 an acre-foot, many applied to participate.
“There are a lot of people looking at that in terms of like, how can I use this to pay down debt,” Denise says. “If I sell a little bit of water and I pay off debt, do I have to farm as hard? Do I have to pump as hard? Do I have to go for three (alfalfa) cuttings? Can I just do two cuttings?
“So those conversations, I think, are starting to pop up around the valley,” she adds.
Farmers, like Fulstone and the Moyles, have found ways to sell a portion of their groundwater rights and still irrigate. Because they have larger operations, they can move around other water rights they own. The Moyles, for instance, used provisions in the Groundwater Management Plan that allowed them to apply water as a credit for having conserved in previous years. When I talk to Denise and Deanne, they’re just starting their last cutting of the season. Although they are looking forward to a break after the growing season (“We’re going into easy street pretty soon, here,” Denise says), they are continuing to invest in — and diversify — the business. They used money from the groundwater buyback to invest in a feed store in Washoe County. Now they have a place to retail their hay.
The program, Deanne says, is a way to not only halt overuse but also ensure “that if there are family farms that want to stay, they’re going to get to stay because the people around them will have the opportunity to retire their water versus sell it out to something else that comes in and ruins the area.”
While some farmers have continued to operate through targeted fallowing and becoming more efficient, some used the program to transition away from farming full-time, keeping the land for other uses like dryland grazing, agrivoltaics (the dual use of land for agriculture and solar energy), or as a place to retire in an industry where retirement plans can be a question mark.
In 2024, when I interviewed Leo Damele, who participated in the Diamond Valley buyback program, he told me that if he were 20 years younger, he would not have done it. But because he did not have a family member interested in taking over the operation — and he wanted to keep the land to live on — selling the groundwater rights back to Nevada was a good option.
“It’s a way for the state to get out of a jam that they put themselves in,” he said.
A FEW HOURS AFTER driving around Smith Valley with Fulstone, I meet with Rex Hartwick, an agent for Far West Real Estate. His home office is attached to his house, at the end of a dirt road that runs by the valley’s “heartland.” He tells me to beep loudly when I back up because there are a lot of cats.
Hartwick is a full-time hay buyer for an export company, in addition to his job selling water and land as a real estate agent. As part of the pilot program, he facilitated a groundwater retirement deal for clients who needed to sell their water rights so they could dissolve an estate in Smith Valley.
According to Hartwick, there is an active market for groundwater in Smith Valley. To subdivide land for new homes, developers must bring water to the table. “Two, three years ago, the water was selling for $2,500 per acre-foot,” he says. “Now, the state came in and paid $3,500 an acre-foot and kind of set the price. Now, people who have it are asking for $4,000, so it’s pushing the price up.”
Given the high cost of water in some overtapped basins across Nevada, questions remain about who will fund the water rights retirement program, now that this year’s legislation has extended it. And the state has other options to reduce use beyond using public funds to buy back water. Existing law allows regulators to curtail water rights using a first-come, first-served priority system. While water rights are a form of property, they can only be used on the condition that water is available.
It’s an approach the state tried once in the Walker River before. In 2015, the state tried to cut off wells and curtail groundwater use. As Hartwick puts it, farmers “were fiercely opposed.” The courts struck down the effort, but for irrigators, the threat of curtailment looms.
The 2025 legislation provided no state funding for future transactions, although it did contemplate accepting donations and federal funding. Such funding could target a specific area or ecosystem in need of protection from groundwater overuse, says Laurel Saito, Nevada water strategy director for the Nature Conservancy, which supports the buyback program. But state funding, she adds, would help to raise matching federal dollars and maximize the program’s value.
“We are the driest state in the nation,” Saito says. “If we use up all our groundwater, we’re not going to be in very good shape. If we really want to think about the population, the economy of the state moving forward, we need to figure out a way to make sure there’s enough water. And this is one of those tools for that. I would think the state, ideally, would have an interest in that.”
As big and important a question as funding is, the question of what the land may look like after retiring groundwater rights is potentially even bigger. The pilot program gave funding priority to projects that included proposed mitigation strategies for noxious weeds, dust, and other impacts of transitioning irrigated land to dryland.
It’s a transition that the Walker Basin Conservancy has thought a lot about. The conservancy’s main goal is to restore Walker Lake at the river’s terminus. To do so, it has bought agricultural land and water rights. In the long term, it means taking some fields out of production. And the conservancy wants to do so in a responsible way, investing in restoration work and field trials. “That’s a big part of our program already,” Henneman, the water director, says.
During my visit to the organization’s offices, Henneman shows me a nursery stocked with native plants outside. Milkweed, bitterbrush, aspen, penstemon, globemallow. “It’s hard to take fields that have been in alfalfa for 20 to 50 years and bring them back to desert scrub habitat,” she says.
But the Walker Basin Conservancy is trying, and Fulstone says it always needs to be a priority for anyone who sells their water. “It’s actually criminal, as far as I’m concerned, to walk away from a piece of property and you don’t convert it into an ecosystem for the environment, for wildlife,” he says, pointing out areas where he has restored land through a combination of grassland seedings, brush introduction, and grazing. “The wildlife, they love this stuff.”
“You want that ecosystem to transition to a new dryland ecosystem,” he adds.
We stop and get out of the car at what was once a cornfield. Fulstone is proud of the restoration work he’s done here, under contract with the Walker Basin Conservancy. Where there was once a monocrop with no bacteria in the soil, he is now seeing more biodiversity in the vegetation.
“It’s all about the soil,” he says. “It’s all about the bacteria in the soil.”
