Sunday, 21 February 2016

Farms and Water: Refuting irrelevant facts with even less relevant facts

Karen Ross, CA Secretary of Agriculture, and Dan Sumner, and agricultural economist from UC-Davis, defend the agriculture industry’s water use in a widely circulated op-ed in the LA Times.  Their target is the often-cited fact that agriculture uses 80% of California’s developed water supply and is only 2% of California’s GDP.  This fact is often used to support arguments that drought-related water cutbacks have not been strong enough for farms relative to those suffered by cities and the environment.

Ross and Sumner respond to this argument by highlighting the many connections between agriculture and the other 98% of the economy.  While their facts are correct, they are even less relevant than the 2% of GDP fact is to the serious question of how to allocate water in a drought.  Their closing argument about the special and unique characteristics of California agriculture is also common among defenders of the state’s agriculture industry.

“unlike most other segments, California’s agricultural productivity and diversity are not readily duplicated elsewhere. Our soils and climate are what have made it possible for us to supply so much of our nation’s and the world’s food.”


Much of this statement is also correct, but irrelevant.  And I think their statement that it is easier for California to substitute in areas other than agriculture is false.

Why are these statistics and arguments on both sides irrelevant?  Because the decisions about water allocation are about the margins of water use.  For example, what would happen if 2 million acre feet (less than 10% of agriculture’s water supply) were reallocated to environmental and/or urban uses?  One million acre feet to the environment would restore what the state water board has already reallocated away from the environment, while one million acre feet to urban users would be enough to half the urban water cuts.  Are the marginal uses of water in these sectors easily substituted?

Looking at the statistical guides produced by Ross’s department, I see that the most valuable commodity in California agriculture, by a very large margin, is milk/dairy, not something unique to the state’s special climate.  These same reports also show that millions of acres of California farmland are in relatively low-value field crops despite the drought, more land than in almonds or grapes, and that all of the roughly 500,000 acres taken out of production during the drought were in field crops such as hay, corn, cotton and rice that are grown in massive quantities in places that do not have California’s unique Mediterranean climate.

While there are costs to reducing agricultural water, the relevant margin for California agriculture is not the parts of the State’s agriculture industry that “are not readily duplicated elsewhere."  In addition, Sumner and Ross are wrong in stating that the non-agriculture uses of water are more readily duplicated elsewhere than California’s agriculture.

Let’s start with the environmental uses, are these easily duplicated?  The primary competing environmental use for water is endangered species habitat.  The term "endangered species” and the concept of preventing extinction makes it pretty clear that there is no easy substitute for this water.  While it is not in line with my values (or the law), I think smelt haters ranting “who cares about a stupid fish” is a more relevant expression of values than Ross and Sumner’s extolling the wonderfulness of the unique aspects of California agriculture that are not at risk of loss - and in fact continue to grow in the face of drought.  

And what about the urban uses?  Are primarily urban economic sectors in California like real estate, government, and health care easily duplicated elsewhere like Ross and Sumner state?  A California cow can substitute imported feed for California feed, and a California resident can easily substitute Wisconsin cheese for California cheese.  Californians can not easily substitute real estate, doctors, nurses, and schools in Wisconsin or any other state?  It’s a lot easier to import cheese from Wisconsin than to go there for surgery, or countless other services that are not unique to California.  If California real estate and industries like professional services had good substitutes, the state's cost of living wouldn’t be so damn high.  While urban areas should continue conservation efforts, there is no denying that the real estate is expensive and that landscaping is a significant part of the value of most properties.  Many families are spending a lot of money repairing drought damage that they would rather spend elsewhere.

I have a high value for agriculture, the environment and cities.  All need to be healthy for the Valley and California economy to prosper and improve.  But this article did nothing to change my opinion that California’s drought management would be improved at the margin if the state was more favorable to environmental and urban interests and a little less favorable to agricultural users.

I suppose it is an improvement to have a fact based water discussion, but it would be better to discuss more relevant facts and compare the marginal uses of water.  These are fallowed field crops, brown lawns, and endangered species habitat.

About the Author

Ethan Jacob

Author & Editor

I am Ethan Jacob Executive Director of the Center for Business and Policy Research at the University of the Pacific, where I have a joint faculty appointment in the Eberhardt School of Business and the Public Policy Program in the McGeorge School of Law..

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