COLUMN ONE : Are Farms Wasting Water? : Government subsidies make the supply cheap and plentiful for agriculture. But critics say it’s urban areas that are getting soaked.

At noon on a sweltering summer day, a torrent of irrigation water is cascading into a series of rice fields west of Sacramento. So much water is flooding the fields that it’s spilling into nearby ditches and onto a frontage road 10 feet away.

Bordering the fields is an expanse of straw-colored grass and dry thistle. In this setting, the lush rice fields, with up to two feet of standing water and lime green stalks breaking the algae-covered surface, appear strangely out of place, a flooded field from the tropics placed in the desert.

Take a drive through the state’s agricultural valleys and you’ll see fields being flooded, giant sprinklers watering pasturelands and irrigation furrows overflowing with water.

Although California has suffered through four years of drought, there still is plenty of water, some water experts say. The problem, they argue, is that agriculture gets too much and urban residents too little.

In California, agriculture uses 83% of the state’s water supply. And with government subsidies, farmers pay a fraction of what city residents pay.

Now many urban residents are asking why they are forced to ration water when farmers, weaned on taxpayer-supported cheap water, have little incentive to save. Critics of current water policy argue that the amount of water that cities can conserve is minuscule compared to agriculture’s potential for savings; residential use accounts for only about one-tenth of the state’s water comsumption.

As the competition for the state’s water intensifies, a growing alliance is forming between legislators in the urban north and the urban south, said Assemblyman Phillip Isenberg (D-Sacramento). These legislators are questioning why agriculture uses the vast majority of the state’s water, when it represents only 3% of the state’s economy, Isenberg said.

Although still relatively new, he said, the alliance has voted to defeat water projects that would have primarily benefited agriculture. And, in the future, urban legislators will be looking to agriculture for new sources of water.

The amount of water needed by California’s growing urban population during the next 20 years could be easily provided if agriculture conserved by 10%, according to a study conducted by Richard Howitt, a professor of agricultural economics at UC Davis.

“The point is, it doesn’t take that much movement of water from agriculture to urban use to solve a lot of the state’s problems,” Howitt said. “A 10% shift wouldn’t do any serious harm to the agricultural economy. And it’s certainly a lot cheaper and does less environmental damage than huge dam projects.”

But defenders of agriculture say that as the drought worsens, more Californians are simply taking the easy way out by “farmer bashing,” said Bill Dubois, director of natural resources for the California Farm Bureau.

“Yes, farmers use the majority of water . . . but it takes more water to raise food than to wash dishes and water your lawn,” he said. “There’s nothing you can do about that. If you raise the price of water, you’ll just be raising the cost of food.”

Many politicians and water experts who are scrutinizing agriculture’s use of water in California say, however, that there are ways of saving water without creating economic problems for farmers. They point to a number of areas that need reform:

Large corporate farms in California receive federally subsidized irrigation water--for only a fraction of the true cost--by using legal loopholes meant for family farmers. This costs the government millions of dollars a year and results in the squandering of great quantities of water, critics say.

Some large farms that receive subsidized water use that water to grow crops that the government considers surplus. And these farmers also receive federal price-support payments for their crops.

A number of relatively low-value crops are using up a significant portion of California’s water. Irrigated pasture for sheep and cattle, for example, uses about one-eighth of the state’s water during an average year, but represents only 1/6,000 of the state’s economy.

In the early 1900s, Congress decided to provide inexpensive, subsidized water to help struggling family farmers settle the West. But because this subsidized water is meant only for family farmers, and not agribusiness and speculators, Congress set a limit on acreage. In 1982, Congress raised the acreage cap to 960 acres, but stipulated that any farm beyond that limit would have to pay full cost for irrigation water.

But according to a study last year by the congressional General Accounting Office, corporate farms in California have circumvented the acreage limit by taking advantage of a loophole in the law. A number of large farms created partnerships or trusts and have reorganized--on paper only--into numerous parcels of less than 960 acres. “For all practical purposes,” according to the study, “these smaller landholdings continue to be operated collectively as single large farms, much as they were before being reorganized.”

The study reported, for example, that one 23,000-acre corporate ranch, owned by the J.G. Boswell Co., used the loopholes to reorganize into a number of “paper farms” and ended up receiving about $2 million annually in water subsidies.

The government pays about 85% of the cost of this water, according to a Senate subcommittee study. So not only is this loophole costly--it amounts to more than $135 million annually in the state--but it also results in the squandering of a tremendous amount of water. If corporate farms paid the true price of water, they would have the same incentive to save as those in the cities, some water experts say.

Farmers who receive water from the federal Central Valley Project--a huge network of dams and canals that provides water to 19,000 California farmers--pay a fraction of the rate charged to urban water districts. The farmers who receive federal water pay between $2.50 to about $19 an acre-foot. (One acre-foot of water is the equivalent of 326,000 gallons--enough to meet the residential water needs of two families for a year.) But the Metropolitan Water District, which services seven largely urban counties, pays $233 an acre-foot.

The Interior Department’s Bureau of Reclamation is responsible for enforcement. But in a hearing before a Senate panel last year, a former Bureau of Reclamation official, responsible for writing the rules on the 960-acre limit, said his superiors had yielded to pressure from agribusiness and overridden his recommendation to enforce the law as Congress had intended. The Bureau of Reclamation then disbanded the acreage limitation office.

“The big farms have great financial resources and tremendous political influence . . . the BOR (Bureau of Reclamation) has been completely co-opted,” said U.S. Rep. George Miller (D-Martinez).

The House of Representatives recently approved legislation proposed by Miller that would close the loopholes. Agribusiness, which opposes the bill, now places its hopes in the Senate, where similar legislation has been introduced.

The subsidized water was supposed to enable family farmers to compete with large corporate farms, but it has had just the opposite effect, said Tom Haller, executive director of the California Assn. of Family Farmers.

“Because of these loopholes, this whole thing has been turned around 180 degrees and the big farms reap all the benefits now,” Haller said. “Corporate farms can get all the cheap water they want, so they lower their overhead even more, charge less for their product and drive the little guys out of business.”

The Westlands Water District in the San Joaquin Valley is the nation’s biggest water district and serves numerous large farms. After Congress set the acreage limit for subsidized water at 960 acres, Judith Redmond co-authored a study, sponsored by the Ford Foundation, which revealed that 50 large farming operations in Westlands broke up into smaller entities “on paper only” to take advantage of the cheap water, she said. This represented 49% of all the acreage in the water district--about 300,000 acres.

These “paper farms” averaged more than 4,000 acres apiece--hardly family farms, she said. Many farms that Redmond studied, such as Vasto Valley Farms Inc., were not subtle about their reorganization. Vasto Valley, one of the largest farms in the district, simply broke up in 1987 into seven “paper farms,” Redmond said--Anderson Farms I through Anderson Farms VII. These seven entities were now eligible for subsidized water because they were considered by the government to be separate operations--but all seven had the same address listed with the water district, the same telephone number and same contact person.

Anderson Farms and many others receiving water subsidies also received government price-support payments for crops. Department of Agriculture economists estimated that the government paid about $380 million in crop subsidies in 1986, for example, to farms that also received water subsidies. And some of these crops that benefited from double subsidies--such as rice and cotton--are determined to be in surplus. Miller calls this the “Sovietization” of American agriculture.

A bill that would force growers to choose only one subsidy recently has been introduced in the Senate.

Dick Anderson, who was president of Vasto Valley Farms, acknowledged that the farming operation broke up to take advantage of the federal water subsidies.

“We need the water subsidies. . . . You take them away and hike up the cost of water and we’ll have a hard time raising a number of our crops,” Anderson said. “That’ll cause a lot of chaos for us . . . and for other farmers up and down the state.”

The top four water-using crops in California use in an average year almost one-third of the state’s water, according to the University of California Water Resource Center. Yet these crops--rice, alfalfa, cotton and irrigated pasture--represent less than 1% of the state’s economy. Alfalfa, for example, uses more water than all the people in the Los Angeles area and the San Francisco Bay Area combined.

Cut water use in just these four crops and enough water will be saved to get the state through drought years and accommodate future growth, some water experts say. And farmers who grow higher-value crops, such as tomatoes, grapes and citrus fruit, would not have to reduce water use at all.

“In a semiarid state, it’s crazy to devote so much acreage and water to these four crops,” said Marc Reisner, environmental writer and author of “Cadillac Desert,” a controversial history of Western water. “I’m not saying eliminate these crops . . . just reduce their water consumption. You do that, you’ve essentially eliminated the need now for rationing in the cities.”

Farmers should be encouraged to reduce acreage in these crops, Reisner said. They could then either grow crops that require less water, he said, or sell a portion of their water to urban water districts.

But Assemblyman Jim Costa (D-Fresno), a vocal supporter of California farmers, said those who want to take water from agriculture are oversimplifying a complex issue.

“These people never farmed a day in their life yet all of a sudden they’re experts,” said Costa, who grew up on a dairy farm. “If you don’t grow alfalfa, you’re just going to have to import all this feed from the Midwest. . . . That’s easier said than done. . . . And some of these farmers can’t switch crops so easily. They can’t just grow anything in their soil.”

Costa, who represents a section of the San Joaquin Valley where a number of the state’s largest farms are located, said that even though farmers obtain subsidized water, an increasing number now are conserving by installing drip irrigation systems and other low-flow methods.

And, he said, during the last year, because of the drought, state and federal water allotments to farmers have been reduced by up to 50% (although many farms made up the difference by pumping ground water).

“I think it’s simpleton thinking to say we can just take a percentage of agriculture’s water, give it to the cities and it will solve all our water problems,” he said. “This would cause tremendous disruption, not just in agriculture, but in the communities that depend on agriculture for their economy.”

And Costa argues that agriculture actually represents a percentage of the state’s economy several times higher than statistics indicate. The statistics, he said, do not take into account farm equipment sales, food processing businesses, fertilizer and chemical sales and other farm-related businesses.

Because government is no longer eager to subsidize huge water projects in California, and environmentalists are fighting the damming of rivers, the reallocation of existing water resources will be the only way to meet the state’s future growth, many water experts say.

Water, once taken for granted because it was so plentiful, now is perceived as a commodity to be traded. Urban areas, which need the water, are looking to agriculture, which has the water. If the urban areas offer sufficient incentive “water marketing” can take place that is beneficial to both areas, said Howitt of UC Davis.

The Metropolitan Water District recently negotiated a historic agreement with the rural Imperial Irrigation District that many experts say is the way of the future. The MWD agreed to pay for farmers’ conservation improvements in the Imperial Valley, in exchange for rights to the water that is saved. The project financed by the MWD includes lining earthen irrigation canals with concrete to reduce seepage and other methods that eventually will conserve enough each year to supply another 500,000 people with water.

But Central Valley farmers, who use the greatest percentage of federal water, are prohibited by the Bureau of Reclamation from transfering water out of the region. Legislation needs to be passed that would promote and encourage water marketing, some experts say.

Rural communities are often suspicious of water marketing, however, and point to the Owens Valley, which suffered ecological devastation after much of its water supply was diverted to Southern California. Environmental groups, though, support the concept and say, like the MWD arrangement in the Imperial Valley, it can benefit both urban and rural areas, and the environment. If there was more conservation by agriculture, environmentalists say, some of the water saved could flow into wetlands, rivers and streams.

“Even in these drought years . . . we’ve still got plenty of water. It’s just misallocated,” said Henry Vaux, an economics professor at UC Riverside and a water resource specialist.

WHO USES CALIFORNIA WATER

In California, most of he state’s water is used by agriculture, not industry or households. Residential: 11.05% Industrial: 2.38% Commercial: 2.21% Government: 1.36% Agriculture: uses 83% of the state’s water

California farmers who receive federally subsidized water pay much less than city dwellers. California farmers who receive water from the federal Central Valley Project pay between $2.50 and $19.31 for an acre-foot for untreated water-enough to meet the residential water needs of two families for a year. California farmers who receive water from the State Water Project pay from $22 to $47 an acre-foot. Metropolitan Water District pays $233 an acre-foot. One acre-foot of water equals 326,000 gallons Some crops in California require far more water than entire cities. (Figures are estimates) Alfalfa: 4 million acre-feet per year City of Los Angeles: 7000,000 acre-feet per year. City of San Diego: 250,000 acre-feet per year. San Diego County: 665,000 acre-feet per year. City of San Francisco: 100,000 acre-feet per year. Sources: California Department of Water Resources, U.S. Bureau of Reclamation, various water districts