28 Jul 2008

Don't End Our Subsidies!

A San Diego county farm representative pleas for the continuation of favorable pricing to farmers:
Ironically, while our growers are taking costly actions to reduce water demand and help shield their urban neighbors from mandatory reductions, some MWD-member water agencies are pushing to significantly modify or end the current agriculture pricing program.


As that effort unfolds and options are formulated, it should be remembered that for over five decades agriculture has been a valuable and loyal financial and political partner to MWD and many water agencies throughout the region.

It should also be recognized that when called upon in the past and today, through its sacrifice, local agriculture has and will come through with its end of the bargain: delivering a 30 percent reduction in demand, thus providing a critical water supply resource for urban users in a time of shortage.
On the one hand, I think it's fair for farmers to pay less if they get less-reliability. OTOH, the only reason that ag is so big in San Diego is that they have received water at lower prices than urban dwellers. Their consumption, as a result, reduces water availability for higher-value uses. [In related news, urban users reduced demand by 1.3 percent, which looks bad in comparison to farmers' 30 percent cuts -- unless you think that farmers who were wasting water could reduce use pretty easily...]

What will happen if the drought gets worse? Can farmers be cut back even further, or have they done "their share"? The problem is that it's hard to set a balance between lower prices and lower reliability.

I suggest the end to preferential pricing to farmers. Let them buy water at the same price as everyone else. If there's less water to go around, let them compete for that water (subject to my typical caveats on basic needs to people first) by bidding more. It's much easier to manage fluctuating water supplies by changing prices as quantities fluctuate -- not by setting prices a year in advance and then hoping to be right.

Bottom Line: Put farmers into the same pricing and quantity system that everyone else faces. If they can grow valuable crops in San Diego, they will. If they cannot, that water belongs elsewhere.

hattip to DW

1 comment:

  1. All "farmers" are not equal. Some crops, like cotton or rice (not grown in SD) use lots of water for little value. Subsidies all around. Table crops do create value, and generate benefit per gallon. The system needs to distinguish and price more specifically. Generally, if a crop gets governement price supports, it should not get subsidies water.


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