Like most Western states, New Mexico's water law is based on the prior appropriation doctrine. This doctrine gives preference to those with the oldest water rights in times of shortages. If there is a shortage, the senior water rights holders can demand that more junior water rights holders reduce or stop their water diversions for the senior appropriators to get their full share.
As the Southwest's two decades of drought deepens, there is an increased interest in finding tools to minimize the impacts of these sharp water delivery restrictions, known as curtailments. These restrictions can disrupt agricultural operations and cause economic and social harm. Water shortage-sharing agreements can be an alternative solution to prevent sharp curtailments during these drought periods.
Shortage-sharing agreements have been implemented for centuries in New Mexico. The main characteristic of these agreements is that during drought conditions, the way water is distributed shifts to prioritize that all users keep access to at least some water. This characteristic contrasts with the doctrine of prior appropriation, which allocates water by the chronological order in which the water was put to beneficial use.
New Mexico's water user communities have used shortage-sharing agreements since before New Mexico's 1907 constituent water code, which instituted the doctrine of prior appropriation, and the passage of the State's Active Water Resources Management (AWRM). These agreements have their roots in pre-statehood water management institutions, acequias , protected by the Treaty of Guadalupe Hidalgo and New Mexico law.
In 2004, shortage-sharing agreements were codified under state law in AWRM as a form of alternative administration.
