Final answer:
The permission for the farm owner to use a large body of water for irrigating his crops is granted through usufruct rights. These rights allow someone to use and gain benefit from property owned by another, within clearly defined property rights to avoid disputes and ensure legal responsibility.
Step-by-step explanation:
The permission for the farm owner to use a large body of water near his neighbor's property for irrigation is granted through what are known as usufruct rights. Usufruct rights allow a person to use and gain benefit from a property that is owned by another. The concept often applies in horticultural societies where land is held in trust by community leaders rather than owned by individuals. Usufruct rights also encompass the use of water resources, especially for agricultural purposes.
In legal terms, as emphasized by the economist Ronald Coase, resolving the use of resources effectively depends upon clearly defined property rights. These rights outline the legal boundaries of ownership and usage, ensuring that unauthorized infringements can be addressed and compensated for, avoiding lengthy disputes and ensuring responsibility is established.
If the government has given the farm owner permission to use the water, it suggests a recognition of sort of an official usufruct right or a specific legal agreement that grants the farmer the right to use water from the body of water adjacent to the neighbor's property line for irrigation purposes, without having ownership of the water source itself.