Water rights are the legal entitlement for a farmer to divert water from a specific source for beneficial, non-wasteful use. Water rights allow farmers to use water in the best and most efficient manner. Specific water rights are based on jurisdiction, with high-drought areas like the southwest United States using strict water regulation.
If a farmer loses his/her water rights, it means they did not meet the standards of their local jurisdiction. In particular, it means they did not use the reasonable amount of water they were permitted, or they did not use the water for beneficial use—including using an appropriate irrigation system.
Water rights are beneficial not only to the local region, but farmers as well. By understanding local requirements on use, farmers can better plan what crops to plant. Should a drought or influx of water effect local waterways, the local water rights will change and farmers can adjust their crops accordingly.