Taxpayers Get Soaked Under Federal Water Plan

Keep your hand on your wallet, Southern California. First, you have the Bush administration threatening to take away some of your Colorado River water supply. Then the same administration is simultaneously planning a massive water giveaway to California rice growers. In fact, the administration is offering even more free water than the growers need.

What will they do with the extra water? Don’t be surprised if the growers sell it to you for a handsome profit.

How can this be? Remember that California has taken more than its fair share of water from the Colorado River for decades. That has meant less water for Arizona and Nevada. As those states’ populations grew, they began to complain and insist that California live within its allotment.

The U.S. Department of Interior now says Southern California will have to cut back. The only question is whether you will be weaned slowly or lose the water all at once.

To avoid a sudden cutoff, officials are racing to meet a Dec. 31 deadline to negotiate a complex water sale. If the deal goes through, San Diego County will pay Imperial Valley farmers about $2 billion for enough water to supply 400,000 families. That’s how much people are willing to pay for this valuable resource, which brings us back to the rice growers and the very different deal that’s on their table.

The administration is quietly finalizing its offer to renew 40-year water contracts with the rice growers and other agricultural interests in the Sacramento River Valley. The contracts are for more than 2 million acre-feet (an acre-foot is the volume of irrigation water that would cover one acre to a depth of one foot) from the federally owned Central Valley Project. That’s three times what the entire city of Los Angeles uses each year and 10 times what San Diego will get from the Imperial Valley deal. Under the proposed contracts, almost all the water is free. A small portion will cost around $30 per acre-foot, about one-tenth of the unit cost that San Diego will pay Imperial Valley.

The rice growers’ deal gets even better. Not only do taxpayers subsidize their water, they also subsidize their crops. Many of these farms are huge agribusinesses receiving millions of dollars per year. The crop and water subsidies are corporate welfare. The subsidies encourage growers to raise low-value crops like rice and provide no incentive for water conservation.

Forty years ago, when the contracts were first negotiated, California had barely 10 million people. We didn’t realize that unchecked irrigation would devastate drinking water supplies, wildlife, the fishing industry and recreation. Today, the state’s population exceeds 34 million. We have dry rivers, contaminated ground water and salmon endangered with extinction.

Water is such a scarce commodity that ideas formerly considered outlandish -- like taking salt out of seawater -- are now considered potentially cost-effective. New times require new contracts. Yet while the rest of California is trying to wring out every last drop of precious water supplies, the rice producers are being offered more than they need. How much more? According to five years of Bush administration data, it’s an average of 560,000 acre-feet of federal water supply untouched per year.

What will the growers do with all the excess water? They will try to sell it to you, thirsty Southern California. And they’re watching to see how much San Diego pays the Imperial Valley farmers. If they charge the same price, then their profit could be in the billions of dollars.

There’s nothing wrong with developing a genuine water market. It can encourage farmers to conserve. But the Sacramento River rice producers are not acquiring their water on the free market; they are getting it at taxpayers’ expense and then trying to sell it back at a steep markup.

It’s nothing less than robbery when tax dollars are used to subsidize wasteful farming practices at the expense of our wallets, clean drinking water and healthy rivers.

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Michael Wall is an attorney with the Natural Resources Defense Council’s Western water project.