Water sales not a windfall but will help the farm and allow for investments in the future
by Tim Johnson
There are a lot of headlines these days proclaiming that rice farmers are making killing this year by selling water and not planting a crop. The facts tell a different story.
First, it is important to understand what a water sale really means. In nearly all cases, farmers will be making a decision to sell a portion of their water in the face of reductions to their own farms of 25 to 50 percent. These are acres they won’t plant to rice or any other crop. Revenue on the farm this year will be off by the same amount.
If the farmer decides to sell some of the remaining water, they have the opportunity to generate some additional revenue on the increased acres that will be fallowed. This will increase the total farm revenue over what would otherwise be the case in this fourth year of drought.
Another fallacy is that all of the farmers will be selling all of their water. That is simply not the case. Water sales are nearly always highly limited by the water district. Some allow only one field per farmer to be idled. Impacts on endangered species must also be considered. Considerations for giant garter snakes require that fields be fallowed in a path work so that the snakes can have access to the flooded rice fields where they hunt.
Finally, the magnitude of the water transfers is grossly overstated. As of today, it looks like less water will be transferred this year than last, simply because there is less water projected from the snowmelt. The sales in nearly every media report refer to the amount of water others would like to buy not the amount of water that will be offered for potential sale. Further, many water districts will prohibit water sales altogether unless they receive close to the amount they do in a normal year, which is hardly likely.
What will farmer do with the revenue they receive from the limited water sales this year? Most will use it to offset the far greater loss in revenue from the water cutbacks they face regardless of the sale. Again, we expect most districts to realize a 25 to 50 percent cutback before any water sales. Others will take a portion of the sale revenue and invest in fish screens and other projects in the water districts to improve the environment including salmon habitat restoration.
Finally, where does the water that is sold go? Most goes to other farmers – our neighbors with orchards next door and farmers in the San Joaquin Valley with even less water than the north this year. Some water will also go to our urban neighbors. This is what neighbors do when the person next door is struggling – they help.
So when you hear about farmers selling water at unbelievable prices, understand that the reality is far different. This is the fourth year of a difficult drought. Everyone is suffering and the suffering will increase as the hot summer settles in and it becomes a dry and cracked land.