Water shortage stares local farmers in the face
SAN DIEGO NEWS NETWORK - Eric Larson | June 9, 2009

For many farmers the water shortage could mean a change in livelihood.

As San Diegans face up to the reality that our water supplies are stretched thin, we are learning that changes in water-use habits will be in order.  Soon, water customers will also realize that the water we do use will become much more expensive.

But for local farmers, the water shortage is more complicated than a lifestyle change. For many, it could mean a change in livelihood.

San Diego County weather allows farmers to produce a wide variety of crops 12 months a year.  While there is a rich local history of farming dating back to the arrival of the Franciscan missionaries, the crops that drive the farm economy today became abundant only after 1947. That’s when water was imported from the Colorado River, followed by water from the Sacramento Delta a few decades later.

San Diego’s Water Crisis: An SDNN Special Report

Leading crops in San Diego County are nursery plants, avocados, tomatoes, cut flowers, strawberries and oranges.  When compared with the more than 3,000 counties in the nation that have agricultural production, San Diego County stands near the top of the class as the 12th-largest in crop value.


Broken Harvest II - California water crisis (By the California Farm Bureau Federation)

Farmers’ relationships with the imported water supply worked well, until the cost of securing a reliable supply to provide for an ever-growing population drove the price of water up.  Because farmers receive their water from the urban supply, they were riding the same price elevator.

In an effort to mitigate the damage to farmers from rising prices, the Metropolitan Water District (MWD) of Southern California adopted the Interim Agricultural Water Program (IAWP) in 1994. The San Diego County Water Authority (CWA) also established its own Special Agricultural Water Rate (SAWR) in 1998.  Both programs relied on the premise that water for farmers would be considered “surplus,” and farmers would pay less for water in exchange for a lower level of service.

The farmers voluntarily agreed to take cuts during times of drought or emergency outages, in order for residents and commercial water customers to use that water.

In January, 2008, the IAWP and SAWR were put to the test.  Farmers were directed to cut their usage by 30 percent in response to a poor water supply. The outlook was grim, due to successive dry years in California and a federal court order to restrict the pumping of water to protect fish in the Sacramento Delta.

At their formation, the IAWP was seen as a program that would be used only occasionally during dry weather or after a catastrophic event such as an earthquake.  With the recognition that the state’s water system was in for years of reduced supplies, the MWD board of directors decided last year that there was no surplus water to be sold at a discount.

It voted to end the IWAP agreement over the next four years.

That hits farmers with the double-impact of rising water prices and the end of the IAWP discount (see chart).  The SAWR has been extended for two years, but accounts for less than one-half of the discount farmers once depended on. As a fixed amount, it is becoming a smaller percentage of the overall water bill.

When farmers received orders for a 30 percent cut in use last year, the concern was supply and how soon it would be restored.  In just a few months that concern has shifted to price.

Growers of crops that are most sensitive to water pricing are now looking hard at the future. They are trying to figure how they can survive as a profitable business, as water becomes their dominant expense.

Avocado and citrus growers will be most vulnerable. They account for about 60 percent of the irrigated farm acres in San Diego County.  Some have the fortune of access to well water, but most do not.

Fundamentals changed

As farmers look at the uptrend of water costs, they ask what is driving such a steep incline.  The answer is that the fundamentals of water supply and pricing have changed.

When imported water first came to San Diego County, it was relatively inexpensive Colorado River water.  California was able to draw more than its allotted supply from the Colorado system, because of a lack of demand in Arizona and southern Nevada. Water was plentiful and cheap.

Even after the arrival of the more expensive northern California water, water from the Colorado remained the base supply and the blended costs were tolerable.

That changed with the adoption of the federally-ushered Quantitative Settlement Agreement in 2001 that reduced California to its true, fixed allotment of Colorado River water.

That action effectively switched the base supply from the Colorado River to the Sacramento Delta, and costs began to rise.  Now the court-ordered pumping restrictions have reduced the amount of water flowing south from the Sacramento Delta.

New replacement sources are even more expensive and add another element of expense to the water bill.  In addition, the water system is composed of mostly fixed-cost infrastructure. When the amount of water sent through the system is reduced, each gallon that is purchased must cover more costs, and the price rises again.

Whether the issue is supply or price, farmers are in a bind.  Reducing the amount of water they use means reduced production, and business suffers.  Using the full amount they need can destroy their bottom line.

As producers of a perishable crop, they cannot set prices to cover their costs since the marketplace sets the daily price for their commodity.  Because of the rising price of water, farmers have already invested heavily in irrigation upgrades to maximize their usage.  While technology and research may lead to some additional water use savings, it is becoming apparent that the next big water-saving technique might be taking acres of farmland out of production.

Individual farmers are now making plans for a future that does not include easy access and use of their most critical input.  Some will figure out how to economize and stay in business, while others will decide that the bottom line is just too thin to support them.

Eric Larson is executive director of the San Diego County Farm Bureau.