In a sign of this dry time, Sacramento Valley rice growers offered to fallow some of their fields and sell a more valuable harvest: Feather River water.
Farmers in the parched western San Joaquin Valley bid for the water as they fight to keep almond and pistachio trees alive.
They lost to a consortium led by Metropolitan Water District of Southern California that included the Kern County Water Agency, Kings County, and water districts on the Central Coast and in the Santa Clara and Napa valleys.
Metropolitan Water District itself agreed to pay $700 per acre-foot, or $71 million, for up to 100,000 acre-feet, enough water to cover 100,000 football fields a dozen inches deep.
Although some farmers paid more than $1,000 per acre-foot to keep their trees alive last year, the price approved by the district’s directors last week is the most costly water purchase of its type to date.
In 2010, MWD agreed to spend $26 million for 100,000 acre-feet, a third of today’s prices. In 2003, the district was prepared to pay $125 an acre-foot.
As scarcity persists, the $700 price won’t stand as a record for long, and that raises significant questions. Fish, wildlife and irreplaceable habitat cannot be an afterthought as the water market turns more competitive. Without water, the economy would crater, on the farms and in the cities. Water is a commodity, but not like pork bellies. It is vital to everything we do.
Taking a cue from the Public Policy Institute of California, which has studied the California water market for years, some lawmakers are mulling creating an entity like the California Independent System Operator, which oversees the supply, demand and delivery of electricity across the state.
If that discussion turns serious, as it should, California could learn from Australia, which began implementing a market system in the 1980s. Using an electronic trading platform, Australian farmers buy and sell water based on their needs.
Australians had to overcome serious cultural and political concerns. People in some regions feared losing water rights, and creating water barons. Hurdles to creating such a market would be formidable, given California’s history of water competition.
In the latest dusty skirmish, farmers whose land lies within the Westlands Water District acted on their own to seek their own supply. Their identities have not become public; their representative, an Orange County water broker, declined to discuss the matter.
“Our biggest competition was farmers in the Westlands Water District … who were seeking supplies for permanent crops such as pistachios or almonds,” Steve Hirsch, an MWD staffer, told the board last week.
Sacramento River Valley rice grower Bryce Lundberg, an executive of Lundberg Family Farms, sits on the Western Canal Water District Board, among the nine water agencies that intend to sell the water. His assessment makes sense:
“When a group representing 18 million people come to call, it is important to listen to them,” Lundberg said, referring to the Metropolitan Water District-led group. “Being able to spread (water) to the most critical needs is good policy. A very targeted or directed use doesn’t make as much sense.”
Many San Joaquin Valley farmers have invested heavily in conservation in recent years. But many also have hardened their demand for water by switching to almonds and other permanent crops, away from annual crops.
Growers of almonds and other perennial crops reap the benefits of high prices for their bounty. But there’s a trade-off. Unlike growers of rice and other annual crops, they have less flexibility in time of drought. They cannot fallow their fields. Without water, their trees will die.
Mid-March temperatures hover in the mid-70s. Farmers and city dwellers will bid up the price of water. If climate change means dry conditions are the new normal, as some experts believe, $700 per acre-foot will seem like a bargain.