Exactly. Best way to deal with drought is to privatize the water supply and raise the price of water. Higher water prices leads to low value agricultural production moving elsewhere, minimizing water consumption.
The state could raise the price, but the issues with water, particularly in the developing world, require substantial amounts of investment in distribution, cleaning, etc. Likely will require additional investment from private sector.
Also, a political entity like the state is unlikely to arrive at an efficient price. Likely to still be underpriced due to political pressure.
There's a really good book by Fedrik Segerfeldt called "Water for Sale". I highly recommend checking it out. It goes over some possible public-private partnerships that could help expand water access and minimize excessive water usage.
Does this plan theorize that in places like sub-Saharan Africa (and other places where similar nonprofits are active [1]), the people living on the land will pay true market prices for water out of their meager, subsistence agriculture-based incomes, instead of sending a family member to the well?
I can speak for Uganda at least, since several of my contract farmers lead fairly low income lives. Can't really speak for the rest of sub-saharan Africa.
One of the biggest costs a peasant family currently has is the time it takes for the woman of the family to get to the well and back with water (in Uganda, it is always women doing this). She usually spends several hours each day doing so. Obviously, this situation is improved greatly if they're near the Nile or another river, but for those who are further afield they spend hours of potentially productive time fetching water.
An increase in the price of water could incentivize development of closer wells, better delivery methods, etc. by profit seeking companies, minimizing the time she spends going back and forth between the well and her house. She can spend that time working and generating income instead.
This will not improve household wealth in all cases, but I'm betting that something like this would help improve several of these families lots in life.
That sounds like some Garrett Hardin argument -- privatization will not solve the water shortage issue. It would simply allow large industrial farms, which typically pollute local water sources through fertilization runoff, to buy up the water supply under an auction based system. What the government needs to do is adopt policies that enforce water conservation and remove obsolete laws, such as one that promotes farms to use up the amount of water allotted to them to receive the same share next season.
[0] http://yournewswire.com/nestle-ceo-water-is-not-a-human-righ...