On May 9, 2003, the U.S. Department of Agriculture announced that 17 western states hardest hit by chronic water supply problems will receive an aggregate of $53 million to help farmers and ranchers implement technologies and practices to conserve water and mitigate the long-term impacts of drought. Each state's allocation is based upon total irrigated acres and total withdrawals of surface and ground water, with the largest allocations going to California ($11.6 mil), Texas ($7.1 mil), and Nebraska ($5.6 mil). Other states receiving funds are Arizona, Colorado, Idaho, Kansas, Montana, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Utah, Washington, and Wyoming.

States receiving these funds will provide cost-share and incentive payments to producers who undertake eligible water conservation activities -- including irrigation system improvements, conversion to less water intensive crops, and dryland farming -- that result in a net savings in groundwater or surface water resources in the agricultural operation of the producer. Each state develops its own schedule of available incentives and sets its own priorities for ranking specific projects based on local resource concerns. Typical incentives include 50 percent cost-sharing for irrigation system upgrades.

The funds are provided by the USDA's Natural Resources Conservation Service (NRCS) through the Ground and Surface Water Conservation (GSWC) provision of the Environmental Quality Incentives Program (EQIP), authorized in the 2002 Farm Bill.