Posted on 01/26/2008 10:53:22 AM PST by LibWhacker
By GARANCE BURKE, Associated Press Writer Fri Jan 25, 4:15 PM ET
FRESNO, Calif. - With water becoming increasingly precious in California, a rising number of farmers figure they can make more money by selling their water than by actually growing something.
Because farmers get their water at subsidized rates, some of them see financial opportunity this year in selling their allotments to Los Angeles and other desperately thirsty cities across Southern California, as well as to other farms.
"It just makes dollars and sense right now," said Bruce Rolen, a third-generation farmer who grows rice, wheat and other crops in Northern California's lush Sacramento Valley.
Instead of sowing in April, Rolen plans to let 100 of his 250 acres of white rice lie fallow and sell his irrigation water on the open market, where it could fetch up to three times the normal price.
What effect these deals will have on produce prices remains to be seen, because the negotiations are still going on and it is not yet clear how many acres will be taken out of production. But California grows most of the nation's winter vegetables and about 80 percent of the world's almonds, and is the No. 2 rice state, behind Arkansas.
Environmental restrictions, booming demand for water, and persistent drought along the Colorado River have combined to create one of the worst water shortages in California in the past decade, and prices are shooting up in response.
The would-be water sellers include farmers who grow rice, cantaloupes and tomatoes around Sacramento and the San Joaquin Valley. Rice, in particular, requires a lot of water; the fields have to be flooded.
The farmers looking to buy water are generally farther south in the San Joaquin Valley and the Los Angeles area and grow such crops as pistachios, almonds and grapes. Because of the heavy capital investment they made in their trees and vines, these farmers cannot afford to stop irrigating their crops and let them die. In contrast, rice, melons and tomatoes are planted anew each year.
Individual farmers don't actually sell their water themselves. Instead, their local water districts represent them in negotiations with other water agencies.
"It's been a good decade since there's been this much interest in buying and selling water on the open market," said Jack King of the California Farm Bureau Federation. "We're prepared to see significant fallowing in several key parts of the state."
As for what this will mean for the cost of food at the supermarket, "it's still too premature to say where prices will settle, but I can say that virtually every agricultural district in the Sacramento Valley is thinking about selling their water this year," said Laura King Moon, assistant general manager of the State Water Contractors Association, which represents 29 water agencies.
Water from Northern California rivers irrigates central California's farm fields and keeps faucets flowing in the Los Angeles area. But it must be shipped south through a network of pumps, pipes and aqueducts, and that system recently developed a kink when a federal judge ordered new restrictions on pumping to save threatened fish.
At the same time, Southern California's other main source of water, the Colorado River, is in its eighth year of drought.
Because of the resulting shortages, Long Beach cannot run fountains, and restaurants there are not allowed to serve customers a glass of water unless they ask for it. Near Bakersfield, in central California, almond and pistachio growers will have to perform triage of sorts and decide which of their nut trees can be saved. And cities across California are drawing down underground supplies of water rather than buying it.
Water on California's open market typically sells for $50 per acre-foot in wet years. But now it is expected to go for as much as $200. Farmers, however, pay $30 to $60, rates that are set under state and federal policy. (An acre-foot is enough water to cover an acre to a depth of one foot.)
Because of rising costs, the huge water agency for the Los Angeles metropolitan recently proposed a rate increase for next year of 10 to 20 percent on the water it sells to cities.
Some environmentalists are troubled by farmers' efforts to sell their water, and warn that such deals don't begin to address the long-term problem.
"Essentially these farmers are getting water for a subsidized price and selling it to taxpayers at an elevated rate," said Renee Sharp of the Environmental Working Group.
that system recently developed a kink when a federal judge ordered new restrictions on pumping to save threatened fish.
Government of any sort attempts to influence for a positive (in the public view) outcome, but alas...
And this is Universal, recall immediately after WW2, the Allies supplied diesel to the French fishermen in hopes of increasing protein in the diets of post occupation nations.
Anyone want to venture a guess where the diesel went?
What the farmers want to do is exactly right. Water should be on the market as a commodity. It will then go where it is needed the most. Have the State and Federal governement negotiate the current water rights mess to allocate percentages of the available water supply in line with the current law, then let the owners sell it for all the market will bear. The market will allocate the water far better and more efficiently than any regulatory scheme could.
“Anyone want to venture a guess where the diesel went?”
Sure. If immediately went to the highest bidder, as it should have. The government is very bad at deciding what the greatest need at the moment is.
“Can’t eat money.
Farmers turn Corn into ethanol, Water into profit...
The prophecies of idolizing the golden cow, has arrived.”
Can’t eat money, but it can buy alternate foods or crops that don’t need valuable irrigation water. As food prices rise, the value of irrigation water will rise. It may not rise enough so that expensive water on expensive land in California can compete with dry farming in Kansas or Argentina, but it might.
The market is much more efficient at determining the best use of resources than the government.
If the farmers are no longer using the water for farming, then why can they still get the farmers subsidized water rate? Seems to me they stop farming, they stop getting the discount and find something else to do... I never heard of a water farmer anyway...
Growing rice in the desert with artificially pumped water - and the environmentalists are siding with the famers over densely populated Californians (ideal in their ideas of human living conditions)?
The water was stolen from Colorado through the force of government !
Its nice to live up here at the source. I live in Oroville, up here ion Northern California. We have Lake Oroville and ship water to LA...I am on my own well with water rights to the irrigation district too. The water tastes fresh and clean with no chlorine or fluoride. Maybe a little mercury and arsenic from the halcyon days of the gold rush, but hey? whats a little mercury between friends eh?
Not much. The dangers of tiny amounts of mercury are way, way, overrated. We obsess over trivial dangers, and ignore large ones. A little mercury is a trivial danger. Islamic Fanatics are a large one.
There is a measurable amount of mercury naturally occurring in most places. I don’t know how much above natural background mercury your water has, but probably very little.
The idea that they own the water and have a right to sell it is screwy on the surface
The idea that they own the water and have a right to sell it is screwy on the surface
Which one would you choose?
These farmers are choosing water to profit.
What's your preference?
That is wrong. I believe in an open market on all items except necessities. The water will go to the highest bidder. This means it will suck to be Bill Gates neighbor. The richest neighborhoods will have all of the water for pools while others thirst? Is that it? Now as far as cars, ATVs and caviar let the marketplace rule.
If there had been a free market for water in the first place, there’s no way anybody ever would have started commercial rice-growing operations in the desert. Way past time to shut down that idiocy.
Also, a number of the water districts have been systematically piping their delivery ditches. This has caused an increase in the amount of water the districts have available to use because open canals and ditches leak. They leak because of the natural porousness of the soil, mice, gopher and muskrat holes.
But the piping has caused consternation with the environmentalists. Why? Because a lot of the wetlands caused by the leaking ditches and canals dried up.
Exactly.
It isn’t theirs to sell.
Taxpayer money built the dams, reservoirs and delivery systems that provide the water.
Taxpayer money subsidizes the cost of the delivering water to farmers for the intended purpose of farming.
At the very least, if the water isn’t used for farming they should lose their quota or allotment.
But the best and fairest solution is to stop all farm subsidies and price supports and end all quota and allotment programs.
Let market forces set produce prices and it will probably end up costing the same or less.
In my state the State subsidizes corporate dairy farms, sets artificial price support levels and then restricts shipment of lower cost milk from other states.
Same with sugar and other agriculture products.
Guess what industry gives state politicians the biggest financial contributions.
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