[Work in progress]

Agriculture is a major contributor and vulnerable sector to increasing freshwater scarcity around the world. As climate change and increased human demand for water increasingly stress freshwater sources, understanding to what extent and through what channels agricul- tural producers adapt to this scarcity is crucial for understanding the impact that climate change will have on food systems. I use spatial and temporal variation in water market ac- tivity over both ground and surface water in Chile, where the privatized water rights system is arguably the most laissez–faire in the world, to provide causal evidence on how farmers respond to water scarcity in the context of well–defined property rights over water. I find limited evidence that water marketization induces investments in precision irrigation tech- nology, and that farmers’ principal channel of adaptation is through crop switching to less water–intensive crops.