In Central Oregon, drought didn’t just dry fields. It triggered a legal-and-economic squeeze that landed on farmers first.

Chris Casad, 38, wakes up before dawn on the Central Oregon property he bought nine years ago near Bend and Redmond. He once grew tons of potatoes there. Then water shortages forced him to fallow fields, and he took a job feeding someone else’s cattle on someone else’s land. Casad’s farm crisis started with drought: three summers when “starving grasshoppers descended,” reservoirs bloomed with toxic algae, nearly 1,000 Oregon wells went dry, and springs feeding the Deschutes shriveled to their lowest recorded flow. But the end of his crops came from Oregon’s century-old water law, which protects some water users at the expense of others.

In Jefferson County, where Casad lives, the state cut the community’s share of irrigation water from the Deschutes under that law. Farmers stopped cultivating a third of the county’s irrigated land. Casad described it as a life-threatening cascade, including “a number of suicides,” people closing up shop, and older farmers unwilling to waste their life savings and years of work trying to keep going.

Zoom out to the system, and you see why. The Deschutes River powers agriculture across Central Oregon through hundreds of miles of canals, pipes, and ditches managed by irrigation districts. Six irrigation districts take more than 90% of the river in Bend from May to September, but COID is the big lever. It is, by far, the most powerful. In the early 1900s, when the state carved up the river, COID lined up for senior water rights, securing a position that gives it protected access when drought hits.

In Western water law, that “senior rights” status matters because the rule generally means your share is protected during shortages. COID also benefits from a second part of Oregon’s century-old framework: it can keep taking water as long as it proves landowners in the district are putting it to “beneficial use.” Waste is forbidden in theory, and the fight shifts to definitions. During the drought years, ProPublica and OPB analysis of state-commissioned satellite data found a mismatch between diversion and crop uptake. Only 1 of every 4 gallons COID took from the river was absorbed by crops.

The reporting shared the analysis with both Oregon officials who manage water for the state and with COID. Oregon did not dispute the numbers. COID’s leaders, however, said they did not trust the state data, which Oregon lawmakers created to study water availability. COID also said the drought years were anomalous, but the analysis across wet and dry years showed crops drank a similar share of the diverted water each year.

What happened to the rest of the water is the uncomfortable part. Other records from COID and the state describe most of it percolating into the ground, evaporating into hot, dry air, or draining off fields into scrubland and desert. Some went back into the river downstream, where environmental regulators have found waterways warmed and polluted. And the gallon that did quench crops? Almost all of it went to grass and pasture.

That “beneficial use” question lands hardest when you look at who uses COID water. In Bend, canvassing the district’s geography means passing from neighborhoods where canals still wind toward single-family homes, then to estates, farms, ranches, and destination resorts beyond the city. Among the district’s wealthiest draws are landowners with high water consumption, including a horse ranch tied to Phil and Penelope Knight of Nike fame. The ranch raises “high-end” horses and sells hay, according to its website, and one manager declined to comment on how it manages water.

The pattern repeats with other gated properties. Cinematographer Byron Garth bought water rights through COID about a decade ago to irrigate part of a rocky hillside. The water helped transform it into an “exclusive compound paradise,” described in an auction listing last year as including a 6,300-square-foot mansion, radiant heated floors, three guest houses, a 10,000-square-foot garage, and a swimming pool, surrounded by soft green grass. For a few years, Garth used the rights to grow hay for about 15 alpacas and goats, but he said it was cheaper to “just mow it.” He also said he had reservations about using so much water during the drought, but reasoned that someone had to use it.

Real estate language makes the incentives plain. Realtor Jen Bowen discussed the “aesthetic value” of lush pasture, noting it is “nicer to look out over a lush pasture than it is the high desertscape.” Sprinklers keep the grass green around a pond and pool at a property previously owned by Garth. The land sits in COID, and Garth bought the water rights in 2016 while building out the multimillion-dollar estate.

For executives and board members, the strategic stake is the same one that crushed Casad: rules that are “legally consistent” can still be materially unfair, environmentally risky, and operationally destabilizing. Ranch at the Canyons, a gated subdivision of dozens of multimillion-dollar mansions, is another example. Its residents mutually own an equestrian center, a luxury wedding venue, a winery, and a nonprofit farm run by “dedicated ranch management and local farmers.” A development manager did not respond to requests for comment, but the website promises homeowners “the peaceful rhythm of agricultural life - without the work.” Another property listing for $15 million similarly sells a dream of land use rather than a tight accounting of water outcomes.

Across the district, the numbers are blunt. Analysis of the most recently available state data from 2015 to 2022 found more than 9 out of every 10 acres were growing grass. That includes pasture and hay fields for livestock and landscaping. Casad, by contrast, wasn’t one of the grass growers. He started farming in the district, leased land near his hometown in 2010, and within a matter of years was turning a profit growing thousands of tons of organic potatoes with a gargantuan harvester he called “the white whale.” He liked the idea of farming in a region once selling 1 of every 4 bags of potatoes in the state and even supplied a local brewery with spuds for fries and welcomed school field trips to show kids a working farm. Drought pulled at the crop side. The law pulled at the policy side. Together, they pushed him out.

The deeper implication for decision-makers is that disputes over water are not just environmental. They are capital allocation, risk management, and governance. When a quasi-municipal entity like COID effectively holds senior rights and battles the data used to define “beneficial use,” the downstream impact can show up as reduced cultivation, economic failure, and social harm. For leaders watching similar resource regimes, the lesson is practical: definitions and enforcement mechanisms matter as much as the headline right to take water.