31 May 2008

Rice, Water, Luck, Wisdom

Each year, rice farmers choose between growing rice or selling the water that they would use to grow rice. This year, both water and rice are valuable, so they face the pleasant task of choosing whether to make a lot of money or more money (article).

On the rice side, prices per hundredweight (100 pounds) are forecast at $25 for the crop going into the ground -- up from $20/cwt now and $13.50/cwt in 2004.

On the water side, cities are offering $200/AF instead of $130-150/AF of past years.

Rice farmers are always sensitive to the charge that they are growing the most water-intensive crop in a dry place, they have too many water rights and/or they pay too little for water.

Although rice does use a lot of water, the farmers grow it on heavy-clay soil that could not be used for other crops. Their water rights are old and abundant, but that's common with farmers in the west who received their water rights through prior appropriation laws from 100+ years ago. They do pay very little for their water: One farmer told me they pay about $7/AF -- basically the cost of pumping the water.

This good fortune makes others want to stop rice cultivation, take away water rights or make the farmers pay more (or sell for less) -- all bad ideas that farmers sometimes diffuse with even sillier nationalist claims, e.g., "I would hate to think the day will come when we're depending on foreign nations to feed us."

Bottom Line: The rice farmers are probably one of the best groups for managing their economic resources. There are many groups (urban, enviro, federal) who could learn a thing or two from them.

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