The Water Kings of California

by DAN BACHER

A small group of wealthy farmers receive the vast majority of water and subsidies from the federal Central Valley Project, concludes a groundbreaking report issued on December 15 by the Environmental Working Group (EWG).

The study was issued as Indian tribes, anglers, commercial fishermen and environmental groups are challenging the negotiation of long term contracts between the U.S. Bureau of Reclamation and CVP growers because of their disastrous impacts upon salmon and other fish populations.

The EWG investigation is the first to name individual recipients of water subsidies in California. It concludes that the CVP, authorized in 1936 to support family farmers, is providing up to $416 million of subsidized water at the expense of fish and the environment.

It dispels the erroneous notion that many people still have of agriculture being made up of individual yeoman farmers in the Jeffersonian tradition right out of the classic Grant Wood painting of a farmer holding a pitchfork, with his wife standing steadfastly beside him.

"It confirms that large agribusiness operations not the small family farmers that federal projects were intended to benefit are reaping a windfall from taxpayer-subsidized cheap water," according to the report, written by Bill Walker and others.

In 2002, the largest 10 percent of the farms received 67 percent of the water, for an average subsidy worth up to $349,000 each at market rates for replacement water, according to the study. Twenty-seven large farms each received subsidies each worth $1 million or more at market rates, compared to a median subsidy for all recipients of $7,076.

The report contends that one farm Woolf Enterprises of Huron, Fresno County–received more water by itself than 70 CVP water user districts, for a subsidy worth up to $4.2 million at market rates. Woolf Enterprises is a member of the huge Westlands Water District, a district that Craig Tucker of Friends of the River describes as the "Darth Vader of California water politics"

Other revelations of the report include:

* CVP farmers get about one fifth of all the water used in California, at rates that by any measure are far below market value

* In 2002, the average price for irrigation water from the CVP was less than 2 percent of what LA residents pay for drinking water, one tenth the estimated cost of replacement water supplies and about one eighth of what the public pays to buy its own water back to restore the San Francisco Bay and Delta.

The report says, "The original intent of the federal water projects, set out in the Reclamation Act of 1902, was to encourage Western settlement by small family farms. Today, artificially cheap irrigation water in the Central Valley has led to a host of problems, including the inefficient use of water, devastation of fish and wildlife habitat and severe toxic pollution"

George Miller (D-Martinez), the author of the Central Valley Project Improvement Act that made fish and wildlife a purpose of the project for first time, hailed the release of the study. Miller has been very critical of attempts by the Bush administration to "fast track" Central Valley water contract renewals without sufficient public notice and comment regarding the impacts of increased water diversions on endangered and threatened fish.

"We have known for years that the Bureau of Reclamation rewards its favored customers with cheap water at the expense of everyone else, including the American taxpayer," he said. "Now the Environmental Working Group has calculated that price tag and at over $400 million, it is staggering"

"What is especially outrageous is that the Administration is secretively negotiating long-term water contracts worth billions of dollars that would provide these same handouts to these same special interests for decades to come, while the rest of California is either running short of water or paying top dollar for it. I wrote a water reform law in 1992 to end these costly giveaways, but the Bureau of Reclamation is ignoring the law and the public and trying to lock in these subsidies for generations"

Tupper Hull, spokesman for the Westlands Water District, blasted the study, claiming that the report "completely cooks up a fanciful description of the subsidies."

He said the actual cost of water to individual farmers in the district is not 7 to 8 dollars per acre-foot, as the study contends. "That’s the cost to the irrigation district, he stated. "The individual farmer in the district will actually pay $20 to 90 per acre foot."

He was particularly critical of the report’s conclusion that the average price of irrigation water was less than 2 percent of what LA residents pay for drinking water.

"First off, LA is paying for taking the water twice as far, twice the cost of conveyance. Then they have to pump the water over the Tehachapi Mountains, all at enormous cost." he said. " Then the water is treated with chlorine and then shipped through water systems to homes all of that, too, at enormous cost. To make this comparison doesn’t make much sense. This is junk economics."

However, Walker emphasizes that CVP farmers are receiving between $60 million and $416 million in water subsidies each year, depending on how the "market value of the water is defined. The subsidy amounts are the difference between what should have paid for the water minus what they actually paid. The subsidy was calculated at three different rates the Bureau of Reclamation’s "full cost rate ($60 million), the State Environmental Water Account rate ($305 million), and the Replacement Water Rate ($416 million).

The State Environmental Water Account rate is the difference between the average CVP rate and the price paid for CVP water by the Environmental Water Account, a state-federal joint agency, to restore fish and wildlife habitat in the Bay-Delta. The Replacement Water rate is obtained by comparing the average price for CVP water to the estimated coast of replacement water supplies from proposed dams and reservoirs on the San Joaquin River.

"No matter what market value is used for comparison, the total subsidy to CVP farmers exceeds the actual amount they paid in 2002, about $48 million. That means that CVP water users are getting a minimum discount of 55 percent below market value, ranging up to almost 90 percent, for the water they receive, the report states.

As a solution, the study advocates far-reaching water policy reform. "Reforms to make details of water subsidies public, limit the amount and value of water subsidies to large farms, and encourage conservation by pricing water at rates closer to market value are needed to end the disaster for taxpayers and the environment by the Central Valley Project, the report advises.

I commend Bill Walker and the other writers of the Environmental Working Group study for doing the first real in-depth analysis of federal water subsidies and their impacts in the Central Valley. For years, fishing organizations, environmental groups and California Indian tribes have complained about the cost of federally subsidized irrigation water projects on fish and wildlife, especially on salmon and other anadromous species. This report documents with hard data how a project meant to benefit small farmers has in fact mainly served the needs of the Westlands Water District and other large Central Valley agribusinesses with enormous costs to the taxpayers, fish and the environment.

To read the full report, go to: http://www.ewg.org

DAN BACHER can be reached at: danielbacher@hotmail.com


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