Water crisis squeezes California's economy

A recent federal ruling to reduce the amount of water that flows through the delta is likely to boost food prices and trim jobs in agriculture.

from the September 12, 2007 edition

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The announcement is already having an effect on the loans farmers receive to operate their farms during 2008.

"Ninety percent of these farms need to be financed, and lenders have made it very clear that without a water plan, there is no money for 2008 crops," Mr. Patricio says.

Eighty percent of the water in California moves from above the delta to farms and communities in the south of it via pumps. The environmental groups said that current use of water pumping through the delta endangered several species of fish, including two kinds of smelt (long fin and delta), steel head, green sturgeon, winter and spring salmon, and split tail.

"This ruling was essentially an agreement that we need to protect habitat in the delta more than we have been, and what state and federal agencies have been doing is likely to drive the smelt to extinction," says Barry Nelson of the NRDC. "For all the serious concern about how the state is now going to meet its water needs, no one is saying that the court got it wrong. Everyone has known for a long time that this was coming."

Water agencies, farmers, and scientists agree, saying the ruling will force a much-needed opportunity to fine-tune the use of water to avoid waste.

"This alarm as been sounding about the delta for 30 years, and we've been pushing the snooze alarm," says Peter Gleick, president of the Pacific Institute, a nonprofit think tank in Oakland, Calif. "This may lead to some of the first discussions ever on how we manage growth in the state, how people live, how much we waste, and what crops we farm."

He notes that farming just three common crops – rice, cotton, and alfalfa – as well as irrigated pastures for cows use about half of the agricultural sector's allotment but earn a fraction of agricultural income. "We can continue to have a healthy economy with less water, but there has been no demand to do that yet," he says. "This ruling may drive us to do things we ought to be doing anyway."

Anticipating the reduced water spigot from the delta as of January 2008, water agencies north of it are telling their clients to cut back on water use. They are already spending money in new ad campaigns to remind users to cut back or face the possibility of mandatory laws with fines.

"We are spending millions to get the conservation message out that we need to conserve as if we are in a crunch," says Jeff Kightlinger, of the Metropolitan Water District of Southern California, which serves agencies and 18 million residents in six counties. He says the new rationing will affect 2 of every 3 Californians.

"Farmers across the state know this will be very tough and not pleasant," says Dave Kranz, spokesman for the California Farm Bureau Federation. "To the extent that you take farmland out of production for whatever reason, it increases another problem, which is providing enough American-grown food to serve the US population as well as demand from other countries."

Solutions are now in the works. A commission appointed by Gov. Arnold Schwarzenegger is planning to make recommendations next month, including ideas for dams and more storage capacity.

State Senate President pro tem Don Perata (D) is pushing two measures. One provides $200 million for immediate safeguards of freshwater flows from north to south. The second is a $5 billion bond that includes $2 billion to fix the water supply, improve flood protection, and boost fisheries in the delta, and $2 billion for water storage projects such as dams.

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