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HEADLINES
Rice over water
Editor's Note: See link below to comment on this article.  | High rice prices have farmers keeping their water instead of selling it to California's Water Bank.
AP Photo/Rich Pedroncelli |
For some in California, it's rice vs. water
California's water picture — never a pretty one — is even more complicated than usual this year, and for a reason many didn't foresee: the price of rice. High rice prices have many farmers in the Sacramento Valley spreading water 6 inches (15 cm) deep, over hundreds of thousands of acres. That's water that many downstream were hoping would be available to farmers in the San Joaquin Valley, not to mention urban areas downstate. But now, rice prices are at their highest in almost 30 years, thanks largely to a drought in Australia, the California rice industry's biggest competitor. Those high prices, along with the tangle of state and federal regulations farmers feared they might have to negotiate to sell their water, have many keeping it to themselves. "Some farms, with low operational costs, are finding it more profitable to grow rice than to sell the water right now," says Teresa Geimer, who runs the state Water Bank at the Department of Water Resources. "And that's good; we don't want the most productive land to go unused." California's 2009 Drought Water Bank was established by Gov. Arnold Schwarzenegger last fall to buy water primarily from local water agencies and farmers upstream of the Sacramento River Delta and make it available for sale to public and private water systems expecting to run short of water this year. But a host of problems, including pumping restrictions, environmental lawsuits and concerns over increased groundwater pumping, has kept the Water Bank from transferring as much as was planned. In April, US Interior Secretary Ken Salazar announced that the Obama administration had cleared the way for large amounts of federally controlled water to be put into the water bank. But even as more supply has become available, there has been less demand than expected, as buyers from the water bank must pay the state's administrative expenses and the cost of moving the water they purchase — on top of the $275 per acre-foot ($223/ML) base price. Geimer says the Water Bank will probably move about 80,000 acre-feet (98,000 ML) this year. The original target was around 600,000 acre-feet (740,000 ML). That leaves water suppliers farther South in the unhappy — if by now all-too-familiar — position of scrounging around for water and waiting for a resolution to Delta water issues. Steve Arakawa, manager of the water resources management group at the Metropolitan Water District of Southern California, says that his district is still in the Water Bank for a "modest amount," about 30,000 acre-feet (37,000 ML) of supply. But MWD's plans would allow them, if necessary, to manage without buying from the bank. "We do have different sources that we can draw on, and we're encouraging our customers to push the message of conservation to their customers," Arakawa says. "The allocation picture has changed somewhat [from earlier this year], so we are doing better than we might have." Arakawa says his district hopes that state and federal issues surrounding water from the Delta can be resolved soon — if not to increase the supply downstate, at least to make it more predictable. "We'd like to see some decisions on the Delta from the state over the next year," he says. "What we'd like is some reliability so we can go forward with our planning. We're hoping that a resolution will restore us back to [pre-2005] levels." Additional AWWA Resources:
Dave Plank, Senior Writer
Posted: 05/26/2009
Comments
Yes, it's too bad that DWR did not establish a real market, where price would fluctuate above/below its arbitrary, bureaucratic level of $275/af.
Don't blame the farmers for a lack of supply or demand, blame DWR for preventing the market from operating.
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