How To Save California Agriculture from Itself
By Daniel P. Beard, Bloomberg News
You would hope the worsening drought in California would bring out the best in the state’s politicians, particularly those who profess to care about the waste of taxpayers’ money.
Alas, this isn’t the case when it comes to several important members of California’s congressional delegation. Take Kevin McCarthy, the House majority leader, who is using the dire conditions to call for projects to channel water to a select number of politically well-connected farmers.”I’m from the Central Valley,” the Republican congressman said, “and we know that we cannot conserve or ration our way out of this drought.”
In fact, we don’t know this because California hasn’t seriously tried it. Agribusiness has traditionally used dry periods to demand more diversions of water from the state’s already heavily tapped mountain rivers. These proposals include two reservoirs McCarthy and other California politicians want: The Temperance Flat Dam on the San Joaquin River and the Sites Reservoir on the Sacramento River would cost approximately $3 billion each. But neither project would supply a drop of water for 20 to 25 years. It will take at least that long to plan, approve and construct the reservoirs, and in the end it’s possible there won’t be enough water to fill them.
The growers and their political allies respond that if California’s drought is punishing them now, the shortfall could be worse in 20 years, meaning state and federal taxpayers should ante up now before it’s too late. To understand why this is a terrible deal, look at the financial arrangements and recall the saying in the West:
“Water flows uphill, toward money.”
This competitive advantage has been worth tens of billions
of dollars. All over the West, farmers served by federal
projects have benefited from 50-year zero-interest loans,
with generous repayment rates, plus low-cost power. And
about 45 percent of the farmers who receive irrigation
subsidies are growing commodity crops such as rice and
cotton that qualify for price supports from the Department
of Agriculture — a classic example of double dipping.
(Ninety-one percent of California farms didn’t collect
subsidy payments; of those that did, the payments
amounted to $10.3 billion from 1995 to 2012. )
In 2014, the federally run system delivered water to
140,000 operations farming 10 million acres of land. Onehalf
of those irrigated acres are in California.
Because some districts may have senior water rights, they
get preferential treatment during shortages. The so-called
junior rights-holders look for other means to firm up
supplies. Some plant less water-intensive crops, and others
idle land or buy water from other districts. And they try to
get Congress to force supplies to be delivered to them, or
give them compensation.
No group lobbies harder than the Westlands Water
District in the southwest corner of the Central Valley. Its
600 or so farms make up the largest irrigation district in
By one estimate, the yearly water subsidy to Westlands of
up to $110 millionwas the most profitable arrangement for
any water district in the U.S., until the current drought
forced cutoffs in the supply. A big part of that amount
came from the difference in the price farmers paid for the
water and the price the taxpayers could receive if it was
sold on the open market.
The federal Bureau of Reclamation, which built and
oversees the Central Valley Project, could have fixed this
imbalancewhen it renegotiated the contracts with
Westlands more than a decade ago. Instead the 25-year
contract the bureau negotiated would commit the
government to delivering more than one million acre- feet
each year, if water is available.
The problem now is that the bureau doesn’t have enough
water to meet the needs of farmers in Westlands and the
rest of the Central Valley Project, plus meet its obligations
to local cities and endangered species (meaning the state’s
rivers have to have some water left in them to sustain life).
So why did it commit to deliver more to Westlands for the
next 25 to 50 years when it knew there might come a time
when it couldn’t deliver it? One reason was to pressure the
taxpayers to pay for construction of new storage and
conveyance facilities because the government would be
“contractually obligated” to deliver the water. Luckily,
despite the efforts of McCarthy and Sen. Dianne Feinstein,
D, among others, this hasn’t happened yet.
The Bureau of Reclamation doesn’t question the rights of
the water nobility in the West, or even calculate the total
subsidy from the agency’s programs. (The last time the
subsidy was calculated, more than 25 years ago, the figure
was $116 billion.) Congress won’t let it.
These practices have meant that several generations of
farmers have had too little incentive to conserve. Yes, there
has been a movement away from more water-intensive
crops such as cotton and rice and greater use of more
efficient sprinkler and micro-irrigation methods. The cost
of water on the open market has risen, but water from the
federal government is controlled by contracts signed years
ago. As a result, the federally delivered water involves an
even greater loss.
It is difficult to calculate water savings from technological
improvements because the amount saved by a farmer with
senior rights is simply sold to someone downstream. And
even as the drought has forced the federal and state
governments to reduce the Central Valley farms’ supplies,
the largest water userin California is alfalfa and pasture
crops, which serve the meat and dairy industries and
compete with operations elsewhere in the U.S. No, we
aren’t talking about tomatoes and strawberries and
broccoli and the other crops California farmers say
Americans will risk losing if they don’t get “their” water
Rather than building more reservoirs, draining more rivers
and killing more fish, we should stop subsidizing the
delivery of water from federal projects. We need to
embrace the principle that those who want to use a scarce
resource should pay full price for it, not a fraction of what
it is worth. We should take the decision of which water
projects to fund away from Congress and adopt a process
similar to that used by the Base Realignment and Closure
Commission, which made tough decisions on military
So when you hear politicians and farmers complain of a
“man-made drought” and a “Congress-created Dust Bowl,”
they are right, just not in the way they intend it to mean.
The government has made the drought worse — by
pursuing policies for far too long that undervalue and
waste the West’s most precious resource.
_ Daniel P. Beard, commissioner of the U.S. Bureau of
Reclamation in the first Bill Clinton administration, is the
author of “Deadbeat Dams.”