Domestic water is probably overpriced not underpriced. It's the farmers who pay way too little (often zero!) for water. This has created screwed up incentives f

Domestic water is probably overpriced not underpriced. It's the farmers who pay way too little (often zero!) for water. This has created screwed up incentives for farmers. Many crops are worth less than the true cost of the water needed to grow them! This is what happens when you have a system driven by politics and not the market - it's prone to lose touch with reality (actual cost/value). Unfortunately it will be very difficult to get back to prices based on actual costs - smaller number of big losers (some farmers) and lots of small winners (consumers & taxpayers) as well as tons of interlocking, inflexible regulations and subsidies (local, state & federal).