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With little hay to sell, the bulk saved to feed his cattle over winter, southern Alberta rancher John Bland remembers well the dry conditions last year that threatened his livelihood.

"We've never had such a failure in hay ever - in 30 years - as we did last year," the 64-year-old farmer said. "We had hundreds and hundreds of acres last year that we never cut. There was nothing there to cut."

Fields failed to grow and fellow ranchers sold off their herds, unable or unwilling to pay to import feed. Now, Alberta is in the grip of a once-in-a-generation drought with the driest back-to-back years on record since the 1880s, poised grimly to drag into a third year with little snow over the winter and, according to Environment Canada, a long, hot spring and summer ahead.

"It's almost as if nature has forgotten to rain and snow in Alberta," says David Phillips, senior climatologist with Environment Canada.

Precipitation shortages, compounded by the increased demand of a booming economy and growing population, have left Alberta with an unprecedented water crisis - one that comes at a critical time, with the province conducting a review of its water-management system amid booming growth.

Alberta currently has a first-in-time, first-in-right (FITFIR) system that puts the longest-tenured water users at the front of the line, regardless of whether they're a municipality or a factory, whether they need their full allotment, and what conservation efforts a user is making. It allows the trading of surplus water, though that "uptake has been very limited," wrote Henning Bjornlund, the Canada Research Chair in Water Policy and Management, in a C.D. Howe report released this month.





In a drought, the system leaves new economic development and younger, growing municipalities in a bind. They are now scrambling to buy extra water rights.

One such municipality is Okotoks, a Calgary bedroom community that has exploded from 10,000 residents to 22,000 in the past decade. It drew 580-million gallons of water last year, just shy of its 608-million licence allotment. But since the province stopped issuing licences to draw more water, Okotoks is trying to find someone willing to sell theirs.

"One of the problems is this hasn't happened before, so nobody knows what they're worth," Mayor Bill McAlpine says.

The province needs to switch to a so-called share system that allocates water use based on need, says Joe Obad of the Water Matters advocacy group, which wants to see the province identify and protect minimum levels in each body of water, then split any surface water. (For instance growing communities can argue their expanding populations need more water, which may be taken from excess water of another user.)

"In the FITFIR system, some people fill their bellies but others go dry," he says.

The province has not yet decided whether to modify the FITFIR system or to overhaul it altogether, but it will hold public consultations before acting, says Alberta Environment spokeswoman Cara Tobin.

"We started this review before the dry years started. … We don't want to get into a situation that has been [the case]in other parts of the world, like Australia for example," Ms. Tobin says.

The effects of another year of dry conditions could be wide-ranging - this year is expected to bring more pests and more wildfires than last year.

But in a province with 60 per cent of the country's irrigation system, the shortages are hardest felt in the fields and pastures.

"I think times are as tough as we've seen them," says Mr. Bland, who normally grows about 1,400 hectares of hay and maintains 330 to 350 head of cattle at his ranch in Cheadle, east of Calgary. He harvested 8,500 bales in 2008, but watched that tally slip to just 1,300 in 2009 - a loss of about $720,000.

Last year, third-generation farmers Jennifer Busenius and her husband had 25 cattle and 65 hectares of hay on their ranch near Chipman, Alta., just east of Edmonton. Drought ravaged their hay harvest, leaving them with only a quarter of the normal yield and forcing them to whittle down their herd to just seven.

"If it continues to go the way it is, we'll have to sell everything," says Ms. Busenius, a mother of two young children. "I wouldn't encourage my kids to stay in it. If we don't start getting rain, water and help ... there's not going to be the family farm any more. It'll be a thing of the past."

A freak spring snowstorm recently blanketed much of Alberta, but with soil moisture now at critically low levels, and 70 per cent of the province declared a drought disaster last year, it won't make a dent.

Edmonton has had just 14 millimetres of rain and snow in the first three months of this year, or 27 per cent of its typical average. It's not much better in Calgary (47 per cent) and Red Deer (32 per cent).



If dry conditions persist, it will jeopardize farmers' seeding conditions, says Bruce Burnett, director of weather and market analysis with the Canadian Wheat Board.

"We don't have a lot of room for error this growing season. We are going to need the rains to come in a timely manner in order for us to have an average production," Mr. Burnett says.









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