Federal Water Subsidies Under Local Scrutiny

The federal government has paid over $687 million in water subsidies to hundreds of California and Arizona farmers over the past two years, according to U.S. Department of Agriculture data. Subsidy payments continue to flow even as municipal water restrictions in both states take effect to address drought conditions and low water levels.

The two main programs subsidize water for farmers who plant crops like rice and cotton, both of which require massive amounts of water for field-flooding, the other for cut-rate irrigation water.

Because they are subsidies, the programs become an incentive for farmers to plant crops that require a lot of water rather than cultivate crops that require less water. In essence, the federal government is paying farmers to not conserve water.

“With our weather patterns, with climate change, and our population growth, we’ve got to look at how we use every drop. We need to take a serious look at policies that encourage economically inefficient and unsustainable uses of our limited clean water supplies,” said Representative George Miller, a San Francisco Bay area Democrat.

At stake in the rising battle over water is the nation’s food supply, water allocation, thousands of jobs and hundreds of millions in local tax dollars.

California Farm Irrigation System
California Farm Irrigation System

Many farmers pay less than half what some cities pay for water from the federal Central Valley Project. California’s agriculture generates over $36 billion and grows the majority of fruits and vegetables in the United States.

“Lots of farmers are already saying that these government programs aren’t enough to make them stay in the business. I just don’t think that taking the No. 1 ag state and drying it up is a good long-term answer for our country. I mean, people need food,” said Jim Hansen, co-owner of Hansen Ranches, the state’s fourth-largest recipient of crop subsidies.

In 2006 federal budget analysts asked whether cheap water and money should be sent to farms with growing needs for animals and urban areas.

“If farmers’ business model depends on getting taxpayer-subsidized water to grow taxpayer-subsidized crops and they still say they have a hard time making it, there’s something wrong. Why do we let them buy water so cheap?” said Bill Walker, campaign director for EarthJustice, an environmental law firm in Oakland.

USDA officials acknowledge that the subsidy system encourages farmers to grow high-water-use crops, even during a drought. By comparison, an acre of cotton requires 25% more water than an acre of wheat: an acre of rice requires double.

“We’re concerned about the availability of water in the West, but we were growing rice and cotton in California long before this problem started. We’re trying to use our resources to produce the most food we can, and that by itself is not a bad objective,” said the USDA’s chief economist Larry Salathe.

Local officials say that they may lower water pressure this summer on taps for Sacramento suburbs- this would be the second year such action is required.

“We still haven’t gotten into a situation where we’re fighting directly with agricultural users over the same bucket of water, but I think we’re going to see that in the future,” said John Coppola, principal engineer for the Sacramento Water Agency.

With farms and urban areas jockeying over less water to produce more food for a growing population, there is no certainty how much water there will be or where it will flow.

For now, the Bureau of Reclamation announced significant water cutbacks in March of 2009. Many farmers are facing no federal government water for irrigation.

“Everyone is going to have to give something up,” said third-generation Fresno County farmer Daniel Errotabere.


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  1. I was not aware of the different view points surrounding this issue. Thanks for a well balanced article covering all perspectives.

    It would be nice to see stats on rice and cotton demand and the cost associated with it for users.
    Look forward to future posts here.

  2. Hey Scott:
    Good article and excellent subject matter. I’m sure your focus will be mostly on California/West Coast but if you really wanna get your hands dirty, start looking at the water issues in the Gulf Coast Region. They need all the help they can get down there.

    I’m an OLD friend of your mom and dad’s.

  3. The Senator in arizona seems to support wasting resources rather than conserving them . I do not even like the sound of a nulclear power plant in th desert ?

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