California Drought Challenges

OMAHA (DTN) -- California's agricultural economy is still looking strong even as farmers increasingly find themselves in battles over water rights.

Despite the challenges of a prolonged drought, data reported last week from USDA shows California farmers had just under $54 billion in cash receipts for crops and livestock in 2014. Of those totals, $38.7 billion came from crops, of which fruits and nuts accounted for $21.3 billion. Livestock production accounted for $15.3 billion in cash receipts.

Overall, the $54 billion in gross receipts is 5% higher than 2013 and is considered a record. Paul Wenger, president of the California Farm Bureau, noted those numbers likely would lead to more media criticism about agriculture in California.

"The media is going to hit that and say that farmers are getting rich off the drought," he said.

Wenger was on a panel last week at a leadership retreat hosted by the American Soybean Association just outside of Lake Tahoe. Wenger said that despite the fact California is the country's largest overall agricultural producer with more than 400 different crops, few people associate California with farming.

"It's funny because people in California don't even think we're an ag state," Wenger said.

Yet, Wenger noted media attacks against farmers flared up last spring after Gov. Jerry Brown signed an executive order requiring cities to reduce their water usage, but exempting farmers. Articles cropped up regarding how much water it takes to produce almonds or avocadoes. The articles often failed to mention how much land has been fallowed in recent years because of declines in surface-water allocations to farmers.

Farmers around Modesto, Calif., where Wenger farms, are part owners of the Don Pedro Dam, which was built by the City of San Francisco and farmers in irrigation districts around the cities of Modesto and Turlock, California. Wenger notes the dam has more water in it now than following the drought that stretched from 1988-93. Still, water allotments have been ratcheted down over the last few years. Wenger said water allocations on his farm have gone down from 42 inches an acre foot to 16 inches.

"Our rights to that water have been extricated at a phenomenal rate," Wenger said. "But the government didn't pay one iota for that dam."

A.G. Kawamura, a former California agriculture secretary, said farmers and agricultural groups have to be more engaged with state and federal officials about the impacts of political decisions or risk further regulatory challenges during the drought. "When you have a state of emergency, you can bet the state and the feds are coming after your rights in a lot of those areas," Kawamura said.

The shortage of water supplies also is partially a function of poorly managing infrastructure built for roughly half the state's current 39 million people. Another challenge is that environmentalists are demanding protection for a few fish without developing better strategies to help the fish adapt, Wenger said.

"We are not managing correctly what the good Lord is giving us," he said. "We can provide for the environment. We can provide for people to drink water, manufacture and for people to grow the crops that people are going to eat, but we have to do a better job managing that infrastructure."

The focus now is the fight over groundwater, Wenger said. The state has approved a tighter groundwater law, but the law did not come with any new investment in water storage, he noted. The way the new groundwater law is being implemented also will translate into more farmer versus farmer battles over senior water rights, Wenger said. Property values will be hurt for those with declining access to surface water and restrictions on groundwater access.

Overall, Wenger said, "Agriculture will be OK, but some people will be hurt," he said.

Josette Lewis, associate director of the World Food Center at the University of California-Davis, cited figures comparing water efficiency and crop production now back to the 1960s. Lewis noted the amount of water applied is down 14%, but the amount of crop produced per acre foot of water has increased 85%, she noted.

"We have seen incredible gains on crop per drop (of water)," Lewis said.

Lewis also noted the drive to shift crops such as almonds will continue because of the value proposition of those crops. At the same time, a lot of the investment going on right now in California farmland is being driven by hedge funds, Wenger said. Investors are buying land at high prices, drilling ground wells and planting almond trees.

"They are making decisions farmers generally would not make," Wenger said.

When asked what farmers in other states can learn from California, Wenger responded that political action is needed. Farmers need to connect more with lawmakers in urban areas who in a lot of cases likely are not as wired into farming.

"We have got to be more politically active," Wenger said. "We can't go down to the coffee shop and complain and then think we can solve all the world's problems because we haven't."

Wenger said California farmers are learning they have to reach out to urbanites, particularly regarding water issues. "We're the people who put food on your table, but that strawberry took a lot of water," he said. "That peach took a lot of water and that hamburger took a lot of water."

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

(CZ/BAS)

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