11 Aug 2008

Numbers You Need to Know

Lloyd Carter just takes off the gloves:
In a typical year the California agricultural industry uses about 34 million acre-feet of water or more than 80% of the developed water consumed by urban and agricultural users in the state. Between 30% and 50% of that water is used to grow four low value, water-intensive crops: cotton, rice, alfalfa and irrigated pasture.

Those four low value, water-intensive crops contributed about $2.5 billion to California's economy in 2005. All of California agricultural production was about $32 billion in 2005. Gross state product in 2005 was about $1.62 trillion. Thus, the contribution of all agriculture to the state's economy was just under 2% of gross state product (1.975 %)and the contribution of cotton, rice, alfalfa and irrigated pasture was an infinitesimal 0.15 of 1% (fifteen one-hundredths of one percent). Westlands claims an annual gross in excess of a billion dollars which would be considerably less if all the public subsidies were factored in (cheap water, power subsidies, crop subsidies, interest free construction loan). Westlands is not even a blip on the state economy's radar screen, only about three percent of California's farm gross and a tiny, tiny fraction of one percent of the state's whole economy.
I'd like to have a source on the water consumption of those four crops. Besides that, all these figures match my understanding.

Bottom Line: If there was a functioning water market, we'd be getting more value from our water.

via WaterSISWEB

Addendum: Carter's post today (lies and dam lies) is awesome. He takes apart pro-dam comments by Schwarzenegger and others, with footnotes.


Anonymous said...

These numbers have their value in providing perspective. Our food supply does indeed constitute the bulk of out water footprint.

On the other hand, the implication of the post is that because agriculture is a very small part of our overall economy, its "disproportionate" use of water is shocking. Not so. Each industry has its primary inputs; nobody complains, for example, that the kite industry is unfairly using too much string. And agriculture, no less than other systems which mix dirt and water to create green - for example, California's forests and grasslands, which nobody seems to point the finger of "water waste" at, not to mention salmon or smelt - just happens to use water. But water is what all the newcomers to the scene need - and unfortunately, they didn't bring it with them - from Mexico, from China, from Pittsburgh and Shreveport, and all those other places that California's burgeoning population are arriving from.

A lot of things are not factored into the "lots of water, little output" eyebrow-raising here. One, the fact that the demand for food and fiber is not going to go away just because we "dry up" California agriculture - it's just going to move the new "savannahs" in Brazil, with arguably a great deal more environmental baggage. If people need cotton, or alfalfa, trust me, they'll get it.

Two, the endgame of a "reformed" water system in California may be a extremely dry landscape, punctuated by a few green urban oases. And the "dry" landscape I'm talking about here is not the natural, pre-European landscape, which had its own marvelous cycles of wet and dry, but a desertified California that is altogether bleak to pass through. Because that water is not going to be re-applied to the original landscape - it's going to continue to be funneled through our artificial system of reservoirs and conveyances, and the only thing that will have changed is that now the cities get it, and not the landscape.

See, the funny thing about having water for agriculture here in California is that it leaves you with a balanced landscape. Ag provides a lot of habitat values. Ag also allows you to "eat local", as opposed to Chilean blueberries. Maybe the question ought to be, should we address urban growth instead?

Francis said...

If there was a functioning water market, we'd be getting more value from our water.

Morning, David.

Who's "we" in your sentence quoted above? What's the value we're getting?

What's preventing Central Valley farmers today from taking advantage of the water exchange statutes? Why isn't there a water market, since the law appears to provide for one?

One component of the answer is, presumably, that subsidies are interfering with market pricing. I've never been a fan of ag. subsidies, but figuring out who in California is getting a subsidy and what the size of the subsidy is can be hard.

For example, will the Reclamation Reform Act work to elimate the subsidies within the Central Valley Project? What is the effect of the San Joaquin River settlement? What about the QSA?

What market-distorting effects exist within MWD's pricing structure? Since MWD has such a complex public governance structure, how does one get MWD to eliminate those effects?

Should MWD exist at all? Assuming MWD was dissolved by initiative, what would take its place?

Bobby said...

Its kind of disingenuous to say that its agriculture consuming all that water. Yes, agriculture consumes water, but who is consuming the agriculture? It's the people in the cities.

If people would stop eating food, farmers wouldn't need to use so much water to make it grow.

David Zetland said...

@CF -- Good points, but I don't buy the "irrigated ag for scenery" idea. As you will have noted elsewhere in this blog, I am opposed to sprawl that results from cheap (urban) water policies. If crops move to places where there is more *natural* water, that would be better. That change will happen when the price of water rises (i.e., by removing subsidies/allowing markets).

@Francis -- Morning. We, as in We the People, the ones who own the water. The major barriers to markets are overly-complex laws restricting trade. (I am sure that you could name 50 different ways to block trades.) As far as MET is concerned, you are right that their pricing is not so good. It's a legacy of cost-based, average-cost pricing. I get into all the distortions that result in Chapter 4 of my diss. (Did you see my replies to your replies at Angry Bear, btw? I was a little late in getting back to you.) I do not advocate breaking up MET, since it's a useful organization. I advocate auctions for water among MET members (see Chapter 7 of my diss).

@Bobby -- I agree that water goes into food. The OP was about the LOW VALUE uses of water in ag, which commentators above are trying to defend. I doubt that we'd see very much alfalfa of ag water cost $100/AF, but we'd probably see SOME pasture and SOME rice...

Anonymous said...

David, I'm definitely buying the market idea. Infinitely better than the "times have changed" and "we're going to change the entitlements" folks that don't want to put their money where their mouth is.

Long term, I see Westlands and the Imperial Valley probably drying up. Alfalfa and cotton acreages drastically reduced. Efficient irrigation, and high-value crops will be the watchwords. All of that will happen whether it is economics or politics that forces those changes.

Urban growth is a tougher nut to crack. This state is going to 50 million people. I'm not sure there's a real way to avoid that, although some decent urban planning (and application of CEQA) can definitely help. Less sprawl, less water and oil.

I still have the concern about externalities, though. We "reform" water use in California, where does the alfalfa and cotton go? Somewhere else. Water scarcity is an issue most places; there are just not that many areas of temperate climate with abundant rainfall and all the other right conditions, so we come around to the same problem in a different place, don't we? Pick one battle at a time, I guess...

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