February 26, 1989
"Take Water from Low-value Agriculture"
San Jose Mercury News
By Timothy Taylor
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CALIFORNIA could not have avoided the drought of 1987-89. A drought is an act of nature.

But California could have avoided the water shortage of 1989, if sensible priorities for allocating water had been adopted a few years ago. In the future, water shortages will be created or avoided by acts of government.

In a normal, non-drought year, California has about 32 million acre-feet of water supply. In a typical year, California farmers use about 26.6 million acre-feet of water to produce $15 billion in farm products, while urban residents and industry use 5.4 million acre-feet of water to produce about $560 billion of everything else.

Clearly, if the game is to reduce water use in California, agriculture must be the main playing field. The chart below provides a breakdown of water use in California agriculture, ranked by crop. The figures are taken from 1986, before the drought would have caused significant cutbacks.

To understand how startling these figures are, consider a hypothetical plan for saving water. Simply stop growing the top four water-using crops: irrigated pasture, alfalfa, cotton and rice.

The economic loss from this plan would be $1.7 billion. That amount is only 11 percent of the value of California farm production, or one-quarter of 1 percent of the state economy.

The gain would be a 45 percent cut in state water use. The extra 14.3 million acre-feet would be enough for urban water use to increase by 250 percent. Or as Marc Reisner, author of "Cadillac Desert," recently wrote after performing a similar calculation, "There would instantly be enough water for 70 million more Californians... God forbid."

All the warmed-over ideas for more dams, reservoirs, even a Peripheral Canal, look crazy when judged against this hypothetical plan. What other proposal can guarantee the state 14.3 million acre-feet of new water, plus an environmental gain, at a cost of less than $2 billion?

But as a way to get more water this summer, this proposal is unrealistic. The main reason is that rural water districts have legal rights to water under longstanding state and federal agreements, and those contracts cannot be ignored.

In theory, the rural water districts could agree to sell off some of their water to urban districts. After three years of drought, however, the water flowing to many farms has been cut in half. Not many rural water districts will want to sell even a part of their remaining water this summer.

But even if this hypothetical plan is not much help this year, it should point the way for California's long-term water policy. After all, if this plan had been in effect the last few years, even the current three-year drought would not have led to any water shortages.

In "California Water: Looking to the Future," the Department of Water Resources predicted that agricultural water use in 2010 will be roughly the same as it is now. That prediction may be accurate, but it is the wrong goal. Instead, California should be aiming to cut agricultural water use by at least one-third.

That goal is not as far-fetched or as difficult as it may sound.

Given proper incentives and time, farmers can gradually shift from relatively low-value crops that use a lot of water -- like pasture, alfalfa, cotton and rice -- to relatively high-value crops that use less water. Grapes, almonds, tomatoes and citrus are a few of the possible replacement crops, and other likely candidates include avocados, broccoli, carrots, lettuce, peaches, plums, potatoes, strawberries and walnuts.

Some additional water savings might occur through more efficient irrigation in the San Joaquin and Imperial Valley.

Consumers have nothing to fear from this sort of shift in farm production. The United States has an oversupply of rice, cotton and wheat, built up by federal subsidies. The major benefit to California consumers is that they would never again have to worry about a water shortage.

The most direct way of encouraging farmers to save water is through the price system. Although water prices vary considerably, farm prices for water are generally much lower than urban prices; for example, a rural water district may pay $30 an acre-foot, while an urban district may pay $200 an acre- foot.

Charging farmers 10 percent more for water leads to about a 6 percent cut in water use, according to economic studies. If those results hold true, charging farmers, say, 50 percent more for water would just about achieve the one-third cut, while still letting farmers pay far less for water than urban residents. State and federal officials should push higher water prices for farmers, particularly when the water contracts come up for renewal.

Government officials should seize other possible ways of pressuring farms to use less water, too. For example, rural water districts should be encouraged to sell water to urban districts.

California's water shortage has not been caused by the drought, but rather by its outmoded way of misallocating its water resources.

AGRICULTURAL WATER USE

This chart shows the water usage and value of crops grown on irrigated farmland in California. Water is given in acre-feet; crop value is given in millions of dollars.

Crop Water use Crop value Irrigated pasture 4,192,000 $93 Alfalfa hay 4,092,000 $570 Cotton 3,424,000 $843 Rice 2,619,000 $204 Grapes 1,587,000 $1,412 Almond/Pistachio 1,088,000 $633 Corn 733,000 $118 Tomatoes 651,000 $485 Sugar Beets 620,000 $164 Wheat 567,000 $120 Oranges/Lemons 554,000 $848 Sources: Crop value estimates are from the "California Agricultural Data Base," published by the Giannini Foundation. Water use estimates are derived from acreage estimates in the "California Agricultural Data Base," multiplied by estimates of water use per acre that appear in "Crop Water Use in California," an April 1986 publication of the Department of Water Resources.

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