I doubt it is rancid this is something that happens to fats. If you mean why is it smelling how long has it been in the butt? Do you keep the butt covered so plant and animal life can't get into? The fact that the water smells will have no effect on your using it in the garden. If you want to completely empty the butt and clean out all the gunk from the bottom, adding it to your compost bin. Don't use any chemicals when cleaning though.