State to Settle Suit by Farmers Over Loss of Water : Drought: Rich land is the first to feel effects of heavy exports, letting the sea flow in from San Francisco Bay.

In a dramatic sign of the mounting costs of the drought, the state has agreed to pay a group of farmers who lost one of the world’s most productive agricultural lands to harmful salts, a byproduct of heavy water exportation from the Sacramento-San Joaquin Delta.

The payment, said to be $3.6 million by a source close to the negotiations, includes compensation for crop losses and for leaving fields fallow in the future on Sherman Island, a once-fertile isle at the westernmost end of the delta.

With the cash settlement, the island’s farmers have agreed to drop a series of suits they brought against the state because of saltwater intrusion into their irrigation supplies.

A constant irritant to the state because of its weakened levees and vulnerability to saltwater intrusion, Sherman Island--though just a speck on the California map--has come to symbolize the economic and environmental problems associated with the demand of providing more water to a growing urban population.

“What’s been happening on Sherman Island is representative of what’s been going on with the delta as a whole, where more and more demands for water from the delta have been putting more and more stress on its traditional uses like farming and the nurturing of fish and wildlife, “ said John W. Krautkraemer, senior attorney for the Environmental Defense Fund. Historically one of the heaviest users of delta freshwater is the Metropolitan Water District, a major supplier to Los Angeles and much of Southern California.

Captured from the delta by a ring of fragile man-made levees erected for the most part by ancestors of its present-day owners, Sherman Island has for decades been an agricultural paradise. The rich peat soils of the 9,937-acre island have been tops in the nation in their per-acre production of crops like corn, wheat, barley, asparagus, alfalfa, safflower, tomatoes and sugar beets.

But its proximity to San Francisco Bay also has made Sherman Island vulnerable to the side effects of drought. Positioned at a point where the freshwaters of the Sacramento and San Joaquin rivers converge to meet the salty seawater of San Francisco Bay, its fields are the first in the delta to taste the brine when freshwater flows are not strong enough to hold back the saltwater of the bay.

“We’re the last ones to receive freshwater and the first ones to lose it,” said Larry Del Chiaro, a farmer and president of the Sherman Island Landowners Assn.

Consequently, by 1987, the first year of the current drought, the farmers of Sherman Island already were noticing a marked drop in their production. As the drought grew worse with each succeeding year, the irrigation water the farmers siphoned from the river became increasingly salty and the crop yield further declined.

“I used to average 5.5 tons per acre of corn,” said Everett Upham, a fourth-generation farmer whose family ties to the delta date to 1865. “Now we’re in a situation where we can’t grow corn because it is a salt-sensitive crop. We’ve completely zeroed out in production.”

No longer able to support his family by farming, Del Chiaro has stopped planting most of his lands and taken on part-time work in construction.

Like most of the 25 farmers who tilled the once-rich peat soils of Sherman Island, Del Chiaro and Upham blame the huge state and federal water projects for the crop-killing intrusion of salt in their water supply.

As the four successive years of drought reduced flows into the delta, they argue, the state continued pumping record amounts of water to thirsty cities and farms in Southern and Central California. As a result, they said, there was less and less freshwater flowing westward to hold back the sea.

“It started four years ago and I just tried to stay ahead of (the salt) but pretty soon it consumed my whole ranch,” said Morgan Johnson, who used to farm 1,000 acres at the western end of the island.

A farming group headed by Johnson and Del Chiaro finally sued the state for damages, citing a provision in a Department of Water Resources contract that requires it to maintain certain water quality standards in the rivers surrounding Sherman Island. A third group was contemplating legal action when the state agreed to the settlement.

Neither state officials nor the farmers will give the details of the settlement, saying only that it resolved two issues--the lawsuits and the state’s need for additional water.

“Right now it isn’t formally signed by anyone. It’s a handshake agreement,” said Robert Potter, a deputy director in the Department of Water Resources. Potter said he did not want to make specific provisions public at this point so as not to “jeopardize what could be a very desirable settlement for all of us.”

But he acknowledged that the agreement eliminates the lawsuits and provides payment to about 25 farmers for leaving their fields fallow and not drawing water out of the delta. The handful of farmers who participated in the lawsuits are expected to get higher settlements than those who just agreed to leave their fields fallow.

By paying the farmers for not planting, the state reduces the possibility of future lawsuits. Most of the farmers contend that the salt would have prevented them from cultivating their lands this year in any event.

In settling the lawsuits, state officials did not acknowledge blame for the change in water quality. But the settlement came just as the State Water Resources Control Board began hearings last week on a proposal to relax salinity standards throughout the delta. Still, state officials downplayed the importance of the settlement to their water quality negotiations.

Potter said the state simply needed to put aside the lawsuits so it could proceed to the next step in a more important agenda: the ultimate purchase of most of Sherman Island from the farmers. He said the state would seek to buy all but a few small areas where its 200 residents live and turn it into a wildlife preserve.

For the state, purchase of the island would have the advantage of absolving it of any need to maintain certain water quality standards in the rivers surrounding Sherman Island. Potter said state ownership also would make it easier to strengthen the levees, which weaken a little more each year as farming speeds the process of subsidence.

“From our perspective, an island that is 25 feet below sea level and levees which are about to fail is a lot bigger trouble than water quality,” he said. Weakened levees caused Sherman Island to flood in 1904, 1906, 1909, 1937 and 1969.

With their fields poisoned by salt, Del Chiaro said, most farmers probably will be willing to sell if the price is right. Even if the drought ends and California is blessed with a series of wet years, he estimated that it would take five years before the soil could be restored to is former productivity.

But the thought of selling leaves him bitter, particularly toward cities and farms in the south that he believes have usurped the water that rightfully belongs to the delta and its residents.

“Everyone thinks the delta is a bottomless pit that will always provide water,” he said. “But so much water has been exported that now we’re in a serious situation that affects the entire state. I just can’t see turning the delta into a desert and making an oasis out of the (Central and San Fernando) valleys.”