CULTIVATING COMMON GROUND: Economic Analysis of Drought on California Agriculture

california drought

CULTIVATING COMMON GROUND: Economic Analysis of Drought on California Agriculture

August 22, 2016

Editor's note: We thank Aubrey Bettencourt for her contribution to California Ag Today's CULTIVATING COMMON GROUND commenting on the report, "Economic Analysis of the 2016 Drought for California Agriculture," released this week. Lead UC Davis author Josué Medellín-Azuara's response can be read below. 

 

By Aubrey Bettencourt, executive director, California Water Alliance (CalWA)

 

Josué Medellín-Azuara, Duncan MacEwan, Richard E. Howitt, Daniel A. Sumner and Jay R. Lund of the UC Davis Center for Watershed Sciences, ERA Economics and the UC Agricultural Issues Center reported their views on the economic impact of California’s continuing drought on agriculture this week. The study, "Economic Analysis of the 2016 Drought For California Agriculture," proved to be uncommonly riddled with errors, questionable metrics and inaccuracies; it’s a continuation of a disturbing recent trend.

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The authors claim that about 78,800 acres of land might be idled due to the drought, but a quick Google search shows a single water district that had more than 200,000 acres of fallowed land in 2016. There are more than a hundred other water districts throughout the state, and most are reporting idled acreage.

 

In another irrigation district in Yuba County, more than 100 agricultural users have been cut off entirely, leaving their nearly-mature crops and fruit and nut trees without water.   [North Yuba Water District (NYWD)]

 

This year the federal and state water projects announced they would provide agriculture with 55% of their water. Two months ago, they reduced the estimate to 5% south of the Delta, and they are struggling to even deliver that amount.

 

Across the state, water prices have increased dramatically, whether pumped from the ground or bought on the faltering water-exchange market. Water that costs less than $250 per acre foot in 2012 now costs up to $750 or more.

 

It doesn’t take a doctoral or economic degree to understand that when the price of water goes up, the cost to produce food also goes up. Farmers may be getting more money for the produce they grow, but they are watching their bottom line shrink because it costs more to grow it. Even water from their wells isn’t free; pumping takes energy, and energy costs money too.

 

Adding to rapidly increasing costs are the new minimum wage, capped work hours, and hundreds of regulatory mandates from the 80+ local, state, and federal agencies that oversee every aspect of California farming and bury farmers in paperwork and red tape. Compliance takes time away from growing food, and it costs money.

 

Take a look at rice farmers. Growing rice today is a losing proposition. After the labor, cost of rice plants, fuel, fertilizing, care, harvesting, drying and milling, growers pay substantially more to grow rice than they can charge for their crop. Many have converted rice paddies to other uses, and some sell their water or take money from federal agencies and conservation groups to create wildlife habitat in order to simply stay afloat. Some are selling off their land to developers, a lose-lose decision affecting everyone.

 

On main street, consumers are another group taking a second, alarmed look at their grocery, water and sewage bills. All are rising far faster than inflation. Whether you are talking about the price of fruit, bread and eggs or the cost of taking a shower, all have been increasing over the past five years because of the drought.

 

To really understand what’s happening, take a drive out of the city and into the countryside where your food is grown. Stop at a roadside produce stand or park your car and strike up a conversation with some ranchers and farmers in a small town cafe.

 

After you hear their stories, you may realize that almonds and pistachios are not as labor intensive as strawberries, tomatoes, cucumbers, grapes, beef, lamb or many others out of the nearly 450 crops grown in California. Some crops are thirstier than others, too. This doesn’t diminish the value of these fruits, nuts, vegetables, and proteins. The value of water is what it provides us: in this case, safe, local, and hopefully affordable food.

 

But commonsense interviews and case studies of actual operations — once the heart of any competent agricultural economic study — are virtually missing from the report’s statistical models built on university computers, research hypotheses and tables of statistics.

 

The drought has hurt California farmers, and it is hurting Californians wherever they live. Gross income may be up, but net profits are down, and the rate of decline hasn’t hit bottom yet. 


Aubrey Bettencourt is the executive director of the California Water Alliance (CalWA), a leading educational voice and authority on California water. CalWA advocates for the water needs of California families, cities, businesses, farmers and the environment.



Editor's note: California Ag today thanks Josué Medellín-Azuara, senior researcher, UC Davis Center for Watershed Sciences, and lead author of "Economic Analysis of the 2016 Drought For California Agriculture," published this week, for his response to several claims made by Aubrey Bettencourt (above).

UC Davis Center for Watershed Sciences
Josué Medellín-Azuara told California Ag Today, "I will not go over debating the comments which I very much welcome and respect, but I would like to provide some thoughts instead."

 

1)  "Through remote sensing," Medellín-Azuara said, "we estimated summer idle land in Westlands by the end of the irrigation season to have been 170K acres in 2011 and just above 270K acres in 2014," based on NASA data. The difference can be explained by some drought effects and other conditions, according to Medellín-Azuara, "so idled land differences should be taken with a grain of salt. As a point of interest, most of the fallow land we estimated was on the Westside of the south San Joaquin Valley."

 

2) In addition, Medellín-Azuara clarified, "My understanding is that there is a cost issue and a cutoff issue. We estimated about 150 TAF (Thousand Acre-Feet) of [water] shortage in the Sacramento Valley in our study. At current conditions for North Yuba Water District (NYWD) agriculture is no more than 3 TAF from my reading of the attached document. I am not saying the cutoffs are not hard for the more than a hundred users, but [I] also want to put numbers into perspective."

 

3) "From what I've heard and read," Medellín-Azuara stated, "the timing [of] more than quantity of the projected releases is unfortunate. One of the things we highly encourage in this and past reports is easing of low environmental impact water transfers among users."

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