Parametric linear programming was used to analyze the impact of negotiable water rights on cropping patterns and enterprise combinations. If the institution of water rights were changed so as to make annual allotments negotiable, market forces could be expected to move the resource into uses in which it has a higher value. Water price was varied from $9.60 per acre foot to $96.00 per acre foot. At a price of $9.60, which is approximately the present cost of irrigation water delivered at the farm gate, producers could profitably use almost 2,000,000 acre feet of water per year. The use of parametric programming with variable water pricing allowed the derivation of a value-in-use or 'conditional demand' curve for water. (Author)