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How Big Ag gamed California's drought

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AH, NUTS Almonds are one of California's most water-intensive crops. Why haven't officials cracked down on farmers?
  • AH, NUTS Almonds are one of California's most water-intensive crops. Why haven't officials cracked down on farmers?

'I've been smiling all the way to the bank," said pistachio farmer John Dean at a conference hosted earlier this month by Paramount Farms, the operation owned by Stewart Resnick.

Resnick is the Beverly Hills billionaire known for his sprawling agricultural holdings, controversial water dealings and millions of dollars in campaign contributions to California politicians including Gov. Jerry Brown, former governors Arnold Schwarzenegger and Gray Davis, and U.S. Sen. Dianne Feinstein.

The record drought has alarmed the public, left some rural communities without drinking water and led Brown last week to impose the first mandatory water restrictions in the state's history. But the governor's executive order required cutbacks only from the urban sector that uses roughly 20 percent of California's developed water; the agricultural sector, which uses 80 percent, was required only to formulate "plans" for coping with future drought.

Responding to criticism about letting agriculture off easy, Brown and his aides pointed out that farmers have already been cut back. In February, U.S. officials announced that agriculture's allocation of federal water supplies in California would be cut to zero in 2015. State water allocation to agriculture will be only 20 percent in 2015. And these reductions come on top of earlier cutbacks in 2014.Yet despite such cutbacks, large-scale farmers are enjoying record profits—and increasing the acreage planted in almonds and other water-intensive crops—thanks in part to infusions of what experts call dangerously underpriced water.

Agriculture is at the heart of California's worsening water crisis, and the stakes extend far beyond the state's borders. Not only is California the world's eighth largest economy, it is an agricultural superpower. It produces roughly half of all the fruits, nuts and vegetables consumed in the United States—and more than 90 percent of the almonds, tomatoes, strawberries, and other specialty crops—while exporting vast amounts to China.

Agriculture consumes a staggering 80 percent of California's developed water, even as it accounts for only 2 percent of the state's gross domestic product. Most crops are produced in the Central Valley, which is, geologically speaking, a desert. The soil is very fertile, but can only thrive if massive irrigation water is applied.

Until recently, agriculture's 80 percent share has rarely been mentioned in political and media discussions of the drought. Instead, coverage concentrates on its implications for people in cities and suburbs, which is where most journalists and their audiences live.

The other great unmentionable is that water is still priced more cheaply than it should be, which encourages overconsumption. "Water in California is still relatively inexpensive," says Heather Cooley, director of the water program at the Pacific Institute in Oakland.

One reason is that much of the state's water is provided by federal and state agencies at prices that taxpayers subsidize. A second factor that encourages waste is the "use it or lose it" feature in California's arcane system of water rights. If a property owner does not use all the water to which he is legally entitled, he relinquishes future rights to the unused water, which may then get allocated to the next farmer in line.

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