Well, if you’re selling the water at rates that aren’t below cost farms will remove themselves. Desalination is cheap enough for humans to live and do most work things, it’s hard to imagine it ever being cheap enough for farming.

The problem is that the farmers own the water, its not about selling it to them but getting it from them.

Farmers do not own the water that flows through their property. This is a Riparian rights concern and is quite complicated.

Its definitely complicated. But the end of the story is that the government can not easily stop the farmers from using water in many of these drought stricken areas. Its going to be a big political battle

Then tax them at a rate equivalent to their environmental cost? I don't think this is complicated (except politically, of course). You just want everyone to carry the cost of their own externalities.

Two problems with that, typically unelected bureaucrats get to set the price, and political complexity is the worse kind.

Dubai has farms fed on desalinated water and the food they produce is still cheaper than imported equivalents.

Dubai is paying ~$2,450 per acre-foot of desalinated water. You generally need around 2 acre feet of water per acre of farmland assuming near zero rain, it varies by crop type but goes up with temperature and down with humidity.

Farms growing food crops don’t produce ~5,000$ in profits per acre, even 1/10th that is an extreme outlier. On top of this desalinated water still has significantly more salt than rainwater which eventually causes issues. Subsides can always make things look cheaper when you ignore the subsidy.

Is that just because imported Dubai food is insanely expensive? I don't believe the math on anything but maybe indoor farming here is going to work out if the water costs anything at all.

Indoor farming can be extremely water-efficient, often at the cost of energy inefficiency, but with low solar prices and the level of sun they have in the Southwest perhaps that can become economical?

I don't know, I just do know that water shortages are a problem, are going to continue to become more of a problem, and there's currently just one technology that's affordable enough that some nations currently use it at scale. So let's get started.