13 May 2008

Offshoring Food

A reader says:
I do think that marketizing water will inevitably fallow land, because us farmers can't pay the way the cities can. That might be okay if there was not an externality involved - i.e., re-orienting water from ag to urban does not make things more "efficient"; what it does is send ag offshore to places where it can be done more cheaply, which also (usually) means without the framework of environmental protections that California-grown crops live with. In other words, we run the risk of standing up monoculture in third-world nations where there ain't no ESA, there ain't no water quality laws, there ain't no instream flows to worry about.
This perspective combines two opinions: Farmers cannot afford to pay city prices, and (because of this), they will be displaced in the market by cheaper, foreign, less-"earthy" competition.

Let's take these opinions in order. Will "marketizing" water fallow land? Probably yes -- the worst (marginal) land will be fallowed/turned into conservation areas or parking lots when it makes more sense to sell water to cities than grow low-value crops. If farmers have water rights (a likely scenario) and are selling them, this is no bad thing for either side.

Is re-orienting water from ag to urban "less efficient"? No, not if you equate market outcomes (willingness to pay) with efficiency on the domestic side or if food can be grown more cheaply in foreign countries.

Is foreign ag cheaper because of lax environmental safeguards? (Not according to this.) What if locals are willing to bear the environmental costs of growing food for gringos? That will not keep US farmers from claiming that it's wrong to buy goods from producers who are willing to employ kids/pollute land and water/work in "unsafe" conditions in exchange for the economic benefits they receive. Although this moral argument is appealing (as well as self-serving), it is also patronizing. After all, who are we (who am I?) to say that such and such a job is "undignified, unsafe, un-whatever"? I, for one, cannot understand why people sit commute for hours in their cars, but I do not have the right to condemn their judgment or humanity in pursuing their choice.

Bottom Line: Environmental considerations are a matter for those who are suffering fromenvironemntal damages (thus, global warming is a global problem). They should not be used as a means of preventing willing sellers from contracting with willing buyers. After all, the alternative ("picaresque poverty") is hardly a laudable outcome.


  1. Please comment on increasing efficiency of water use in both ag and the urban sector, which would (might, could?) also come with a true water market.

  2. It is important to remember that municipal water is treated, distributed in a vast and complicated network, is available instantly and always, and has its drainage treated. All of these factor into its cost per acre foot, and are a substantial component of the difference between ag and urban water costs. Another consideration that is largely overlooked is volume. All the existing and projected urban/industrial users in our State could never use the entire existing developed water supply. If they had to pay the whole cost, their water bill would skyrocket. In the 60's LA had to beg Kern County ag. to buy into the State Water project, and lure them with fairly low rates, and no acreage limitations, in order to make the scheme work.

  3. FC -- see tomorrow's post.

    Philip -- I agree that treatment, distribution, and reliability costs are higher with urban water. (Treatment costs are -- generally -- a separate expense.) You are right that urban users could not absorb the total water supply but these facts do not justify subsidies from urban to ag. "Making schemes work" probably indicates that such schemes are a bad idea.

  4. Well, the CVP/SWP may or may not have been bad ideas (although one has to consider what the environmental consequences would have been had our population centers grown around our water supplies, instead of what we built, which moved the water to where the people wanted to live and work--near transportation hubs like seaports). But if you accept the idea that municipal users could never use the system's full capacity, it is interesting to consider who is subsidizing whom.


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