Colorado Public Radio, today, has an interesting story on the phenomena of "buy and dry" in the state, in which farmers sell their water rights (often for millions of dollars from farms that are marginally productive agriculturally and have no clear successors to farm them) to municipal water systems that need to water to support expanding urban populations.
The practice has virtually ended farming in some rural counties. Initially, there was a concern that simply cutting off water without considering the environmental impact of doing so would lead to swaths of infertile dirts that were a blight on the state and cause rapid economic collapse without warning in rural communities. More recent legislation in Colorado has mandated that the buyers of water rights in buy and dry transactions must establish and fund a thirty year mitigation plan that returns the previously farmed land to a state where it is a sustainable prairie and provides payments in lieu of taxes to the impacted governmental units to reflect the revenue losses that they experience as a result of the lost agricultural economic activity.
On balance, it is an example of property rights, accompanied by reasonable government regulation, protecting the legitimate interests of all involved while putting our arid state's scarce water resources to their highest and best uses.