Water in the Farm Crunch

You know that times are tough for California farmers when they talk about giving up their irrigation water. That is what is happening in the San Joaquin Valley, the nation’s richest agricultural area. Dramatic evidence of the problem is contained in a letter from the manager of the Wheeler Ridge-Maricopa Water Storage District to the head of the association of State Water Project customers: “The present economic situation in agriculture is critical.”

The talk about selling water emanates from Kern County, where state water rates have risen dramatically because of higher energy costs for pumping. A government official from the Fresno area says that banks there are making contingency plans to handle loan defaults. The worst may come in early 1986, when farmers will go in for the annual loans required to finance spring and summer operating costs. The loans normally are repaid when the crops are sold, but farmers are having greater difficulty in selling. When they can sell, prices are depressed.

What began to happen in Iowa two and three years ago is now occurring in California, the Fresno official said. California agriculture has been the wonder of the nation. Many large farms in the San Joaquin Valley are run by large corporations that had the capital reserves to weather some of the economic storm. But now the pinch is on, aggravated by depressed export markets. Some of the large farms have undertaken dramatic cost-cutting programs to survive.

The cost of water is just one element of the crunch, but it is an important one symbolically. Since its inception in 1960, the State Water Project has been considered virtually as secure as gold bullion. Farmers purchase their irrigation water from a water district wholesaler, which passes on the funds to the state to retire the bonds issued to finance project construction.

One large district in Kern County reports that member farmers are $646,000 delinquent in water charges. Such arrearages have been made up out of district reserves, but the reserves will not last for long.

There are potential solutions that will not solve all of the farmers’ problems, but that may forestall any clamor for a government bail-out of the state’s corporate farming enterprises. At the Wheeler Ridge-Maricopa Water Storage District, Manager Arnold S. Rummelsburg suggested the sale of farmland to the Metropolitan Water District of Southern California. MWD could use the farm water in dry years when the district may run short of supplies for its six-county urban service area. In good water years the district could lease the land and the water to farmers for crop production. The cost of such water to MWD would be far less than that obtained through the development of new water supplies.

The Environmental Defense Fund has suggested that if large amounts of water come onto the market, some of it might be taken over by the state or other government entities for environmental purposes, such as protection of water quality in the Sacramento-San Joaquin Delta. This concept is bound to infuriate some farm groups, but it may be one way to rationalize the use of government funds to make up for lack of farmer payments. No option should be overlooked.

Some water experts have theorized for years that California’s growing urban areas always would have enough water because, at some point, the water would become too valuable to use on marginal crops. No one, however, expected the state to reach that point so soon.