Dan Beard: How To Save California Agriculture from Itself

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."