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March 30, 1990
"Half of California's Agriculturalwater Produces Pasture, Cotton, Alfalfa and Rice: Four Crops that are Either Low Value, or in Surplus, or Both. Reroute California's Water"
San Jose Mercury News
By Timothy Taylor
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I'VE been half-hoping for severe drought all during the rainy season, but the water districts and water projects have done their jobs and managed to ensure that most of California will scrape through another year with no more than what has come to be an ordinary level of water rationing. California has a system of water collection, storage and delivery that should enable it to snicker at drought, if the water itself is properly managed.

For yet another year, California's water system will continue to be environmentally destructive and economically inefficient.

The story of how the Hetch Hetchy Valley in Yosemite National Park was turned into a reservoir for Bay Area drinking water is relatively well-known, but damming the rivers to flood the valleys did a lot more environmental damage than hiding some scenery.

Marc Reisner and Sarah Bates describe some of the environmental costs in their just-published book, "Overtapped Oasis: Reform or Revolution for Western Water" (Island Press, 1990). They describe how the Friant Dam wiped out the salmon run on the San Joaquin River, and how Shasta Dam is now threatening the salmon in the Sacramento River.

By stopping rivers and lakes from their seasonal flooding, dams have shrunk California wetlands from 4 million acres to 400,000. As a result, wintering waterfowl populations have fallen from perhaps 40 million in 1950 to 10 million in the 1970s and about 3.5 million today. Disrupting the flow of water also poisoned wildlife refuges.

Of course, some environmental damage will occur with any water system that supports 30 million Californians. But 85 percent of the water in California (and throughout the Western states) is used by agriculture, not directly by people. Of that agricultural water, half produces pasture, cotton, alfalfa and rice: four crops that are either low value, or in surplus, or both. California is the top state for exporting farm products because of high-value crops like fruits, nuts and vegetables, all of which use less water.

It should be possible to strike a better balance by looking for ways to divert water from agriculture to environmental and urban uses. However, this sort of shift has been blocked by long-term contracts between farmers, water districts and the state and federal government. Under these contracts, farmers commonly pay $20 or $30 per acre-foot for water, while urban users pay $200 per acre-foot.

Overriding these contracts appears legally problematic and politically impossible. Like many vocal minorities, California farmers seem to have an effective veto power.

But their traditional water subsidy could also be the wedge that persuades farmers to voluntarily trade away water. This type of reform is advocated by Reisner and Bates, and by Richard W. Wahl in his recent book, "Markets for Federal Water: Subsidies, Property Rights, and the Bureau of Reclamation" (Resources for the Future, 1989).

For example, during the drought worries of early 1989, the East Bay Municipal Utility District bought 60,000 acre-feet and the Santa Clara Valley Water District purchased 90,000 acre- feet of water from the Yuba County Water Agency at $45 per acre-foot.

When the March rains hit, East Bay MUD ended up not using the water; instead, some was left in the Mokelumne River and the rest was resold to the Department of Fish and Game. But the purchased water helped Santa Clara County get over the drought hurdle last year, and half of the purchase is still available in San Luis Reservoir to ease this year's drought.

These purchases were useful and laudable, but they were also only one-time events. A more promising story is the deal cut between the Metropolitan Water District of Los Angeles and the Imperial Irrigation District east of the city. In 1988, Metropolitan agreed to pay for water conservation projects that will save 100,000 acre-feet of water per year, in exchange for the right to use that water. Given the subsidized price it was paying for water, conservation didn't make economic sense for Imperial. But Metropolitan was willing to pay $148 per acre-foot to assure itself the additional water.

This deal will help to limit irrigation runoff and ease the effects of drought, but it does little for environmental concerns. Still, the challenge for California (and other Western states) is how to encourage more trades.

Reisner and Bates, Wahl and the people I talked with in Yuba County agree that no explicit legal barriers exist to trading of water rights. However, they also all agree that the conditions under which trades will be permitted are unclear, and the administrative hurdles are high.

Any rural water district considering trading some water rights may be forced to renegotiate its entire water contract with the federal or state government. It will need to file an environmental impact report, which allows environmental activists and courts to enter the picture. And anyone who believes he would be adversely affected by the trade can protest. If a rural area already has long-term contracts for cheap water, why should it be interested in running this gauntlet?

What is needed is a change of emphasis: Instead of allowing water transfers to occur only in the cases where all parties are willing and eager to spend years working through all the obstacles, California needs to lower the administrative and legal hurdles and encourage water transfers.

Since rural areas would only be making trades that they are willing to make, they would benefit by definition. By trading conserved water or shifting from low-value crops, they need not even reduce the value of their agricultural production.

Urban areas will benefit from an assured supply of water. At a minimum, water trades between rural and urban areas will benefit the environment by reducing irrigation runoff and by making it less likely that additional dams will be built.

If the state takes an active role, the environmental benefits could be still greater. For example, voters might support a bond issue to allow the state to purchase water rights for the purpose of restoring wetlands and keeping rivers clean and free-flowing. Or the state might pursue an indirect method of requiring that a fixed percentage of each water sale between rural and urban areas (perhaps 10 or 20 percent?) be left in the stream.

The state Constitution "requires that water resources of the state be put to beneficial use to the fullest extent of which they are capable." At the beginning of the 20th century, it was plausible to claim that the most beneficial use was irrigation for homesteaders.

But today Californians live predominantly in cities and (at least claim to) have a deepened concern for their environment. It's time to start reshaping the water system to fit the new realities.

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