How to manage drought: Ask an economist

faceshots2.pngThe economics of water scarcity is crucial to sustainable water management, particularly during droughts. California has long benefited from the insights of economists, though their ranks in state water agencies are thinning. Luckily, California has a wealth of young, talented economists already active in public water policy and who will be around for future droughts. California WaterBlog asked five of them what California should be doing to prepare for a fifth year of drought and beyond.


Get inside consumers’ heads

By Kurt Schwabe

Does a lawn use more water than a pool? How much water will be saved by replacing turf with drought-resistant landscaping? Will it be cost-effective? What will be the effect on residential water use if a water agency incentivizes customers to use water more efficiently (adopts a budget-based tiered water rate)?

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Kurt Schwabe, UC Riverside

It depends. That is, these questions are difficult to unpack since they are intricately tied to human behavior.

For example, the degree to which drought tolerant landscaping saves a household water relative to turfgrass will depend on, among other factors, how they irrigated their lawn before and after replacement. Alternatively, the relative water use of a pool versus turfgrass also will depend on, among other factors, their irrigation habits prior to installing the pool. Unfortunately, restricting water use to fewer days a week – as some research shows – doesn’t necessarily save water, nor does refilling one’s pool every other day rather than every day (as one customer tried to convince me of during a recent trip to the barbershop). 

Historically, California’s management of severe drought has centered on engineering solutions. In the current drought, however, understanding human behavior and the demand side of water management is beginning to share the center stage.

Forward-looking water agencies are overcoming the stigma that investments in understanding human behavior are somehow less worthy than augmenting water supply in addressing drought. Indeed, these agencies are systematically evaluating numerous ways to improve demand-side management through analyses that identify:

  • Factors determining participation in conservation programs
  • Factors influencing residential water demand
  • Effectiveness of price and non-price conservation programs
  • Revenue and cost implications of alternative conservation options
  • Possible synergistic effects across conservation programs

Such efforts can lead to more informed, targeted and cost-effective conservation programs.

Kurt Schwabe is associate professor of environmental economics and policy at UC Riverside.


Increase role of water markets

By Katrina Jessoe

Economists have long recognized well-functioning water markets as a valuable tool for reducing the economic costs of drought.

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Katrina Jessoe, UC Davis

They involve voluntary transfers of water between parties, usually from higher priority to lower priority water-rights holders, at a negotiated price. They offer an opportunity to transfer water from lower value to higher value uses, regardless of whether those uses are for agricultural, urban or environmental purposes.

Water transfers in California have been occurring since the 1976-77 drought, but their role in managing droughts should be increased. Reducing transaction costs and expanding groundwater markets could do this.

The former does not imply that the environmental impacts of transfers should be ignored. Environmental costs are real and should be taken into account before approving a transfer. However, the current transfer process is cumbersome and drawn-out. A more streamlined approach could reduce transaction costs and encourage market activity.

The recently enacted Sustainable Groundwater Management Act, requiring local agencies to manage underground pumping and recharge sustainably, may encourage groundwater banking and borrowing.

Groundwater markets would allow for trading to occur over time with increased pumping during times of scarcity and the replenishment of aquifers during wet years. These transfers would introduce further flexibility in managing water resources.

 Water markets will not prevent droughts but they offer a feasible and flexible pathway to lessen their economic costs.

Katrina Jessoe is assistant professor of agricultural and resource economics at UC Davis.


Tiered water pricing works – and it’s legal

By Kenneth Baerenklau

What happens when there is a disruption in the supply of oil or some other commodity? The price tends to go up and demand tends to go down. The demand for water is no different.

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Kenneth Baerenklau, UC Riverside

There is an abundance of empirical evidence demonstrating that consumers reduce their demand for water in response to higher prices. In the residential sector, demand tends to fall by about 4 to 6 percent for every 10 percent increase in price (albeit with significant variability across circumstances).

But the difference between water and other commodities is that the prices charged by water agencies typically aren’t very responsive to disruptions in supply. That is, when water becomes increasingly scarce, prices don’t necessarily rise to reflect this scarcity, and thus demand doesn’t fall.

There are some good reasons for maintaining price stability related to the essential nature of water and the lack of good substitutes. But pricing nonetheless remains a very effective tool for managing water demand.

A recent court decision in an Orange County case may have left the impression that a particularly popular and effective “tiered” approach to water pricing is unconstitutional in California.

On the contrary, the court stated clearly that tiered pricing is not unconstitutional and furthermore makes good sense. Debate remains over the types of costs that can be passed on to customers as higher water prices. Californians nevertheless should expect their water suppliers to rely more heavily on pricing to achieve conservation goals as this drought continues, and even more so when the next one comes around.

Kenneth Baerenklau is associate professor of environmental economics and policy at the UC Riverside School of Public Policy


Keep closer tabs on crop water use

By Josué Medellín-Azuara

Agriculture in California, as in many other parts the world, has the lion’s share of water use. The industry uses 80 percent of the water consumed in the state in a normal year. Yet the state’s method of tracking all that water use has not kept pace with the needs of modern water management.

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Josué Medellín-Azuara, UC Davis

Estimating farm water use requires data on cropping patterns, land use, water deliveries and irrigation methods. At best, this information is available annually. It takes county agricultural commissioners and state agencies that long to collect it.

Effective water management calls for timelier water-use accounting, especially during droughts.

Modern measuring methods using multispectral satellite imagery make it possible to estimate farmers’ “consumptive” water use — the amounts of irrigation water crops transpire and evaporate from the nearby soil.

Consumptive water-use estimation using satellites in combination with ground-level weather data and land-use surveys can greatly improve the timing, accuracy and effectiveness of this information.

Other western states use this remotely sensed measurement technology to quantify consumptive use and manage their water rights system. The technology is relatively inexpensive (just cents per acre in Idaho).

A consortium of federal and state agencies can make this endeavor possible. A concerted effort to organize, document and distribute this wealth of information is needed.

Josué Medellín-Azuara is a senior researcher specialized in hydro-economic modeling at the UC Davis Center for Watershed Sciences


Monitor and manage our groundwater

By Duncan MacEwan

The ability of California growers to offset shortfalls in surface waters supplies with increased groundwater pumping is critical to avoid costly crop losses during droughts. Growers pumped an additional 5.1 million acre-feet (maf) of groundwater in 2014, offsetting 75 percent of the surface water shortage that drought year.

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Duncan MacEwan, ERA Economics

But mining groundwater this way carries costs that undercut agricultural productivity in the long run.

Pumping groundwater water faster than nature replenishes it results in depletion of the groundwater in a basin. In the last decade, California’s Central Valley overdrafted its groundwater reserves by more than 20 maf. Average annual overdraft ranged from 0.4 maf in average water year conditions to more than 1.4 maf in dry years [1].

The standard cost of groundwater overdraft is the additional energy required to pump from a lower water level. But there are two additional, and perhaps more important, economic costs: the buffer value and stranded capital costs.

The buffer value is the value of having groundwater stored and available for use during drought years. It is reflected in the ability to irrigate higher-value crops in dry years by planting fewer acres of lower-value crops in wet years. The stranded capital cost is the present value of the remaining useful life of assets such as wells and orchards that were lost during drought as a result of insufficient groundwater.

California’s Sustainable Groundwater Management Act of 2014 paves the way for conjunctive rather than extractive groundwater management. That is, groundwater pumping may exceed the natural rate of recharge during dry years, but must be replenished in wet years to avoid additional economic costs.

The current drought has highlighted the value of our groundwater reserves to agriculture. We have learned that we must monitor and manage our groundwater to preserve the marginal pumping cost, buffer value and stranded capital costs. The new groundwater laws move us in that direction.

[1] Author’s calculations using DWR’s C2VSim model data.

Duncan MacEwan is managing partner at ERA Economics in Davis, Calif., specializing in water resources and agriculture.

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Making the most of little water — with spreadsheets

Photo by Jenny Ta/UC Davis

A dam on Mill Creek diverts water for irrigation of nut orchards and pasture in the Tehama County community of Los Molinos. The stream routinely goes almost completely dry during irrigation season, preventing threatened spring-run Chinook salmon from reaching one of its few remaining spawning areas.  Photo by Jenny Ta/UC Davis

By Jenny Ta and Joshua Viers

It seems inevitable that increasing numbers of California farmers will see their claims to surface water suspended this growing season as the drought persists into a fourth year.

The State Water Resources Control Board said as much Friday (June 12) when it extended drought-related prohibitions on river diversions to irrigators with rights dating to 1903 in the Sacramento-San Joaquin Delta and its watersheds. The order marked the first time California has limited water use for senior water rights holders since the 1976-77 drought. 

The prospect of such draconian cutbacks convinced about 200 Delta farmers with priority dates earlier than 1903 they would be better off giving up water before they began planting. In May, they negotiated an agreement with the water board to voluntarily surrender 25 percent of water supplies (from 2013 levels) this June – September growing season.

Across California, other farmers and ranchers with senior water rights will likely seek similar deals to pre-empt potentially steeper mandatory cuts. Common ways to reduce diversions from streams include voluntary curtailments, water exchanges, conjunctive use and water purchases.

The UC Davis Center for Watershed Sciences recently developed a tool to quantitatively evaluate these water management options. Working with the Nature Conservancy, we designed the model to assess strategies for restoring populations of native fish on Mill Creek, a tributary of the Sacramento River.

Mill Creek Watershed

Source: Google Maps

Mill Creek hosts one of the highest elevation salmon-spawning habitats in California and is one of the few streams that still support threatened spring-run Chinook salmon. It winds southwest from Mount Lassen through a narrow canyon until it reaches the Sacramento Valley. Before joining the Sacramento River, the creek flows through the small Tehama County community of Los Molinos, where landowners with senior water rights divert flows to irrigate nut orchards and cattle pasture.

Tehama County Superior Court adjudicated Mill Creek water rights in 1920, allocating the stream’s entire discharge during low summer flows. As a result, the stream routinely goes almost completely dry during irrigation season (June through mid-October). At the request of state and federal fisheries regulators, local irrigators voluntarily agreed to provide flows for the spring and fall salmon migration this drought year and last. This year’s curtailment orders have not affected these senior water rights holders — so far.

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Lower reach of Mill Creek where it flows through Los Molinos and is diverted for irrigation. Source: UC Davis Center for Watershed Sciences

Stream flow is critical to sustaining riverine plants and animals, many of which have adapted to historic flow patterns. These species include the foothill yellow-legged frog, whose reproduction is timed with the annual spring snowmelt, and Pacific salmon that migrate up the Sacramento and spawn in the creek.

Our water management tool is an easy-to-use spreadsheet model that calculates and identifies environmental-flow shortages based on seasonal diversion demands and water management scenarios, such as water exchanges, water-rights purchases and substituting groundwater for creek water. 

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Water shortages to fall and spring fish passage flows for a critically dry year, 2008 (above) and for a wet year, 2006 (below). Source: UC Davis Center for Watershed Sciences

For example, we analyzed strategies for providing fish-passage flows during the spring and fall migration of Chinook salmon and steelhead trout, species of particular interest to wildlife managers.

The model identified late October as a period of water scarcity for irrigation and fish passage in both dry and wet years. Fish-flow shortages ranged from 1,600 to 2,450 acre-feet of water annually from wet to dry years, as illustrated above.

Our analysis showed that if irrigators left their water in the stream a few weeks during fall migration (late October through early November) — in return for the conservancy availing its share of creek water to irrigators from July to early October, shortages to fish-passage flows would be reduced by about 60 percent. (See table below, under “Agreement”.) If, in addition to the water exchange, irrigators pumped more water from wells instead of the creek, the passage flows could potentially be fully restored.

Environmental flow shortages and percent reduction in shortages for different water management options. Source: UC Davis Center for Watershed Sciences

Environmental flow shortages and percent reduction in shortages for different water management options. Source: UC Davis Center for Watershed Sciences

We did not address all factors that need to be considered in reducing water diversions, such as groundwater-river water interactions, water quality and economic trade-offs. But the tool is a useful first step in deciding how to address environmental water shortages in diverted creeks and rivers. Other salmon-bearing streams such as Deer Creek in Tehama County and the Eel River in northwestern California face similar water management challenges.

Fish-water needs aside, California landowners with senior water rights are on notice this drought year that curtailments are likely if not imminent. Those looking to pre-emptively cut a deal with the state water board, as many Delta farmers did, may benefit from quantitatively evaluating their water management options.

Jenny Ta is a graduate student of hydrologic sciences at the UC Davis Center for Watershed Sciences. Joshua Viers is an associate professor at UC Merced and co-director of the UC Water Security and Sustainability Research Initiative.

Further reading

Grantham T and Viers J. “California water rights: You can’t manage what you don’t measure.” California WaterBlog. Aug. 20, 2014

Ta, Jenny. “Decision support tool for water management and environmental flows: Mill Creek case study.” Masters thesis. UC Davis. May 25, 2015

Willis A, et al. “A salmon success story during the California drought.” California WaterBlog. Jan. 20, 2015

Yarnell S. “How dam operators can breathe more life into rivers.” California WaterBlog. Feb. 1, 2015

Yarnell S. “Life springs in Sierra Rivers as springtime flows recede.” California WaterBlog, May 4, 2013

Yarnell S. Sierra frogs breed insights on river management. California WaterBlog. Oct. 3, 2012

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Drought killing farm jobs — even as they grow

Despite the drought, jobs and revenue in 2014 continued to grow in some parts of California agriculture. Workers shown here in 2013 are harvesting cauliflower on the Central Coast, which was less affected by the drought. Photo by John Chacon/California Department of Water Resources.

Despite the drought, jobs and revenue in 2014 continued to grow in some parts of California agriculture. Workers shown here in 2013 are harvesting cauliflower on the Central Coast, which was less affected by the drought. Photo by John Chacon/California Department of Water Resources.

By Josué Medellín-Azuara, Richard Howitt, Duncan MacEwan, Daniel Sumner and Jay Lund

With all the news about the drought drying up farm jobs, it seems paradoxical that California agriculture actually came out a bit ahead on employment growth last year.

The industry gained a monthly average of more than 4,000 jobs, up 1 percent from 2013, according to the latest state Employment Development Department statistics.

How could this be?

The drought has caused growers to fallow hundreds of thousands of acres and forced ranchers to sell off livestock. But some parts of agriculture have continued to grow in revenue and jobs (albeit at a slower rate because of the drought).

Workers harvesting

Workers harvesting swiss chard on Central Coast, winter 2013. Photo by John Chacon/California Department of Water Resources

The growth in labor is largely from farmers shifting to more profitable, permanent crops that usually take more hands to produce, a trend that has been going on for many years.

Global markets are favoring tree fruits and nuts, vine crops and vegetables with high prices, such as almonds pistachios and grapes. This is feeding conversion of farmland from annual crops and pasture to orchards and vineyards that are too valuable to fallow.

Despite the drought, growth in these more labor-intensive crops increased overall agricultural employment last year to a monthly average of 412,300 jobs, the state labor data show.

Last summer we estimated the 2014 drought would result in the loss of 17,100 jobs across California’s economy, with 7,500 of these jobs directly related to agriculture. The fallout has been harsh on many farm communities already suffering from high unemployment, particularly in the San Joaquin Valley. But it is not inconsistent with the longer-term increase in total farm employment.

Blossoms appear on the trees in the many orchards of the San Joaquin Valley.

A San Joaquin Valley almond orchard in bloom, winter 2013. California growers are shifting to more profitable permanent crops such as almonds, which usually are more labor-intensive than the lower-value annual crops such as alfalfa.

Consider the stock market and suppose you own stock only in Google. If Google goes down, but the market as a whole goes up, no one will question that you have lost money. The same idea applies to the 2014 California drought: Total statewide farm employment (stock market) increased because of strong specialty crop prices and other factors unrelated to the drought. The drought (Google) nevertheless led to significant fallowing and farm job losses in many parts of the state.

Aggregate employment statistics can be misleading, especially in agriculture, with its high proportion of undocumented, seasonal, part-time and contract jobs.

Drought impacts on farm employment are estimated by going directly to the cause, namely water shortages. These shortages are then expressed in lost jobs using economic models that link water to farm production to farm jobs. This gives an estimate of the incremental effect of drought on agricultural employment.

The drought-related job loss estimates from our models do not account for the compensating effects of regional shifting of jobs or water trades. But they do give a good indication of areas most vulnerable to drought.

Richard HowittJosué Medellín-Azuara and Jay Lund are with the UC Davis Center for Watershed Sciences; Duncan MacEwan is with ERA Economics in Davis, Calif.; and Daniel Sumner is director of the University of California Agricultural Issues Center.

California's agricultural workforce grew slightly in 2014, largely because growers are shifting to more labor-intensive, permanent crops with higher prices, such as almonds and grapes. However, the drought sharply decreased employment in contract farm labor and other support jobs during the irrigation season. Source: California Employment Development Department

California’s agricultural workforce grew slightly in 2014, largely because growers are shifting to more labor-intensive, permanent crops with higher prices, such as almonds and grapes. However, the drought sharply decreased employment in contract farm labor and other support jobs during the irrigation season. Source: California Employment Development Department


The San Joaquin Valley saw the largest farm job losses in California during the 2013-2014 irrigation seasons, with modest gains in some areas. A similar trend occurred in the South Coast. The Sacramento Valley saw job increases in the hundreds – far less than would have been expected with no drought. The Central Coast, which is less affected by drought, had increases in all job categories. Source: California Employment Development Department

The San Joaquin Valley saw the largest farm job losses in California during the 2013-2014 irrigation seasons, with modest gains in some areas. A similar trend occurred in the South Coast. The Sacramento Valley saw job increases in the hundreds – far less than would have been expected with no drought. The Central Coast, which is less affected by drought, had increases in all job categories. Source: California Employment Development Department


Year to year growth in California’s agricultural employment during this five-year period peaked in 2013 at 15,000 jobs, then in 2014 plummeted to 117 jobs. Source: California Employment Development Department

Year to year growth in California’s agricultural employment during this five-year period peaked in 2013 at 15,000 jobs, then in 2014 plummeted to 117 jobs. Source: California Employment Development Department

 

Further reading

California Employment and Development Department. 2015. “Agricultural employment in California.” Last visited June 3, 2015

Howitt R, Medellín-Azuara J, MacEwan D, Lund J and Sumner DA. 2015. “Preliminary analysis: 2015 drought economic impact study.” UC Davis Center for Watershed Sciences. 9p

Howitt R, Medellin-Azuara J, MacEwan D, Lund J and Sumner DA. 2014. “Economic analysis of the 2014 drought for California agriculture.” UC Davis Center for Watershed Sciences. 20p

Lund J. “Why California’s agriculture needs groundwater management.” California WaterBlog. May 26, 2014

Medellín-Azuara J, Lund J and Howitt R. 2015. “Jobs per drop irrigating California crops.”California Water Blog. April 28, 2015

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Harsher drought impacts forecast for California agriculture

Ground view showing drought conditions in agriculture field.

Drought conditions in crop field near Woodland, Calif. Source: California Department of Water Resources

By Richard Howitt, Duncan MacEwan, Josué Medellín-Azuara, Jay Lund and Daniel A. Sumner

The drought is expected to be worse for California’s agricultural economy this year because of reduced water availability, according to our preliminary estimates released today.

The study, summarized below, estimates farmers will have 2.7 million acre-feet less surface water than they would in a normal water year — about a 33 percent loss of water supply, on average. The impacts are concentrated mostly in the San Joaquin Valley and are not evenly distributed; individual farmers will face losses of zero to 100 percent.

Expanded groundwater pumping will offset more than 70 percent of this surface water deficit, according to our modeling of how farmers are likely to respond. This leaves a shortage of 2.5 million acre-feet — 9 to 10 percent of the amount normally applied to crops — compared with a net water shortage of 1.5 million acre-feet in 2014.

The estimates, prepared for the California Department of Food and Agriculture, also show that farmers will fallow roughly 560,000 acres or 6 to 7 percent of California’s average annual irrigated cropland.

Estimated Drought Impacts to California Agriculture, 2015

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Source:Howitt RE, Medellín-Azuara J, MacEwan D, Lund JR and Sumner DA. 2015. “Preliminary Analysis: 2015 Drought Economic Impact Study,” UC Davis Center for Watershed Sciences.

Economically, the drought seems on track to reduce crop, dairy and livestock revenues by $1.2 billion this year. Pumping costs are expected to reach nearly $600 million. Overall, the drought is estimated to cause direct costs of $1.8 billion — about 4 percent of California’s $45 billion agricultural economy. When we account for the spillover effect of agriculture on the state’s other economic sectors, the total cost of this year’s drought on California’s economy is $2.7 billion and the loss of about 18,600 full- and part-time jobs.

California Agricultural Jobs and the Drought, 2013 -2014Pages from 2015Drought_PrelimAnalysis copy

Agricultural employment increased from 2013 to 2014, but substantial losses of irrigation-season jobs occurred in areas particularly hard-hit by the drought.
Source: Authors’ calculations using California Employment and Development Department data

The drought induced job losses even while total agricultural employment continued to grow. We estimate further job losses will occur in 2015.

As with last year, groundwater, global markets and water markets are greatly reducing the economic impacts of the drought on California’s agriculture and consumers worldwide. Still, considerable local suffering will remain in harder-hit areas.

We will update our estimates in the coming months as additional data become available.

Richard HowittJosué Medellín-Azuara and Jay Lund are with the UC Davis Center for Watershed Sciences; Duncan MacEwan is with ERA Economics in Davis, Calif.; and Daniel Sumner is director of the University of California Agricultural Issues Center. 

Further reading

Howitt RE, Medellín-Azuara J, MacEwan D, Lund JR and Sumner DA. 2015. “Preliminary Analysis: 2015 Drought Economic Impact Study,” UC Davis Center for Watershed Sciences. 9p

Howitt RE, Medellín-Azuara J, MacEwan D, Lund JR and Sumner DA. 2014. Economic Analysis of the 2014 Drought for California Agriculture.” UC Davis Center for Watershed Sciences. 20p

Lund, JR, Medellín-Azuara J, Harter T. Why California’s agriculture needs groundwater groundwater management.” California WaterBlog.May26,2014

Lund, JR et al. “Taking agricultural conservation seriously.” California WaterBlog. March 15, 2011

Medellín-Azuara J and Lund JR. “Dollars and drops per California crop.” California WaterBlog. April 14, 2015

Sumner DA. “Food prices and the California drought.” California WaterBlog. April 22, 2015

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Ten ways the feds can help ease drought in the West

Lake Oroville showing The Enterprise Bridge looking from the South Fork on September 5th, 2014.

South Fork of Lake Oroville, California’s second largest reservoir, on Sept. 5, 2014. Photo by Kelly Grow/California Department of Water Resources

The AuthorsSince the onset of California’s drought emergency 16 months ago, federal agencies and Congress have been seeking to help the state through funding and new and existing legislation.

Here are 10 recommendations for new federal actions. Although many focus on California, they are relevant to other western states facing similar challenges. Because droughts are a recurring — and increasingly likely — feature of the western American climate, we also address water management actions important for longer-term support of a healthy economy, society and environment.

Federal drought support for the near termthefeds

The drought has revealed different challenges in different sectors. (For a summary of drought impacts in California, click here.) Modest federal actions could support drought resilience in each of these sectors, in many cases without additional funds.

Rural communities: Some smaller, rural communities whose wells are running dry because of falling water tables need financial support for alternative sources, such as new wells, pipelines to other systems and, in the short-term, trucked-in water. Relaxation of federal funding rules could help.

(1)  Waive the 15-connection limit for federal support.
Safe Drinking Water State Revolving Funds are available to support such communities, but only if their water systems serve at least 15 connections, the threshold for regulation under the Safe Drinking Water Act. Many California communities rely on smaller systems and domestic wells where these funds cannot be used. Waiving the connection limit would likely be helpful in California and other western states.

Cities and farms: Federal action can lessen the socio-economic impacts of drought in urban and farm areas by enhancing the flexibility of water market and storage operations for federally owned water projects. Easing rules on allocation of federal matching grants could speed the process significantly.

(2)  Allow carry-over storage.
Many federal water projects in the West restrict the ability of contractors to carry reservoir water over into the next water year. For instance, the Central Valley Project (CVP) owns any water that is not taken out of reservoirs by March 1 (with the exception of San Luis Reservoir south of the Delta) [1]. This practice encourages potentially wasteful “use it or lose it” behavior and results in lower reservoir levels. During droughts, the U.S. Bureau of Reclamation should allow carryover. Those storing water for the next year would take on the risk of spillage if late-season rains make it necessary to release water for flood management. To minimize spillage, reservoir operators (including the Army Corps of Engineers) should experiment with real-time forecasts to inform flood releases.

(3)  Facilitate water trading.
Although federal projects such as the CVP accommodate water trading, the authorization process is often so cumbersome that it slows and even prevents trades. Legislation could direct the Secretary of the Interior to facilitate water transfers during drought emergencies and make available any excess infrastructure capacity for this purpose.
 For single-year transfers, legislation could also exempt trades of project water from the National Environmental Protection Act (NEPA), as California does under the California Environmental Quality Act (CEQA). As described below, water users could contribute to an ecosystem restoration fund in exchange for this regulatory flexibility. In California, it would be especially useful for CVP exchange and settlement contractors to develop long-term contingent contracts with more junior contractors, especially those lacking other water sources for permanent crops.

(4)  Facilitate the distribution of federal cost shares for local projects. Both cities and farms can build drought resilience through development of non-traditional water sources, such as capture of recycled wastewater and stormwater. Flexible federal cost-share programs — which allow agencies to directly fund states for certain purposes (for example, capture of recycled water and stormwater, groundwater recharge and smart meters) — would speed distribution of federal matching funds by allowing states to directly apply for them. In California, the federal government could usefully support drought-resiliency projects by directing CALFED funds to cost-share on projects supported by state bond money.

Ecosystems: In California — and elsewhere in the West — more deliberate approaches are needed for environmental stewardship during droughts. This includes actions that safeguard species and help fund these efforts. Federal land and water resources can also contribute to these actions.

(5) Develop and implement a drought biodiversity strategy.
Along with the state, the federal government could support development of a biodiversity plan that guides federal and state actions. The Australians made great strides in ecosystem management by taking this route during their decade-long Millennium Drought. Such a strategy should include:

a.  Identifying aquatic refuges for at-risk species, with an initial focus on public lands for immediate special management; work with NGOs to identify and acquire refuges and water rights on private lands
b.  Identifying investments for conserving cold water, particularly in federal reservoirs
c.  Identifying and buying emergency water supplies for in-stream flows and wildlife refuges
d.  Acquiring water rights for the environment and giving water managers the flexibility to engage in short-term trades of this water
e.  Designating watersheds rich in native species as high priorities for conservation, especially those with spring water sources
f.  Building conservation facilities or repurposing existing hatcheries to rescue fishes whose habitat has disappeared [2]
.
g. Fostering a “Delta Science Center” for government and academic scientific work on the Sacramento-San Joaquin Delta — similar to federal science efforts for the Chesapeake Bay and the Great Lakes — with objectives that include improvement of the region’s resilience to drought 

(6)  Augment ecosystem restoration funds to build drought resilience.
Mindful of the need for any new federal funding proposal to identify a funding source, we propose the expansion of the ecosystem restoration fund model now used for the CVP. The project charges an ecosystem restoration fee of approximately $10 for irrigation users and $20 for municipal and industrial (M&I) users for each acre-foot of water delivered. During droughts, revenue collection would fall with deliveries, but the government could borrow against future revenues. This fund could also be augmented with a surcharge based on the fixed M&I rate or a percentage of the water price on transfers that use federal facilities or benefit from NEPA exemptions on short-term transfers proposed above. Such a small surcharge would amount to a minor price compared with the costs of water traded during California’s current drought. Finally, when environmental-flow regulations are relaxed during droughts for the benefit of urban and farm water users, those users could be charged for this water — similar to a market transaction — and the proceeds could go to this restoration fund [3].

(7)  Speed the ability for emergency listings of species threatened with extinction.
Numerous species not already listed under the Endangered Species Act are at risk, but the U.S. Fish and Wildlife Service (USFWS) does not have the resources or procedures to list them. Part of the problem is that the agency depends almost entirely on its own in-house work for this purpose, even when scientifically rigorous analyses are available from state fish and wildlife agencies and other sources. USFWS could be required to supplement its own work with studies by other agencies to create emergency listing packages.

Statewide water operations: The federal government can improve the measurement, monitoring and forecasting information needed to manage scarce water resources fairly and efficiently.

(8)  Direct expertise and investments toward information systems.
U.S. Geological Survey and National Weather Service expertise and programs should be reinforced and directed toward (a) helping states improve gauging and modeling for water allocation and use, (b) investments in new technology to improve water-use measurement and accounting — such as metering and satellite remote-sensing for agricultural water use — and (c) groundwater modeling to expedite implementation of California’s new groundwater management law.

Longer-term federal actions for drought resilience

The above actions would work within existing institutional frameworks to improve the capacity of water systems to cope with droughts. As the U.S. Bureau of Reclamation’s study for the Colorado River basin and other studies show [4], water scarcity is expected to become increasingly common in the West. Institutional changes can increase the capacity to support the economy, society and environment.

(9)  Create an Independent System Operator (ISO) for water.
California in particular would benefit from creating an ISO for water — similar to the one for the state’s energy system. This would involve merging the federal and state water projects and operating them as a single public utility, with an ISO overseeing overall grid operations. The federal and state governments could seed the foundation of an ISO by charging it first with facilitating voluntary water marketing [5].

(10)  Promote regional integrated water management. Federal and state governments recognize the value of more coordinated, integrated water management to achieve multiple benefits, such as managing floodplains to simultaneously reduce flood risk, improve habitat and recharge aquifers. But an institutional framework is needed to truly coordinate the actions of the numerous federal, state and local agencies involved in water management. A promising approach is to organize by hydrologic regions or large watersheds. A law similar to the federal Coastal Zone Management Act would empower states to develop integrated watershed plans that federal agencies would then follow. This structure could be useful for more effectively addressing a host of challenges in managing water supply, water quality, drought, floods and ecosystems [6].

California’s drought highlights challenges facing water managers throughout the West. The challenges are likely to increase with a growing population and changing climate. Modest federal investments and policy changes can help reduce the economic, social and environmental impacts of the current drought. These same actions, along with long-term improvements in integrated water management and water trading, can help California and other western states prepare for inevitable future droughts.

For a PDF of this blog, click here.

Notes and further reading

[1] California’s State Water Project allows contractors to carry over their water from the prior year.
[2] A model is the Dexter National Fish Hatchery & Technology Center in New Mexico, the only federal facility dedicated exclusively to the study of threatened and endangered fish. Scientists there perform life history studies and analyze fish genetics while maintaining a refuge for 16 imperiled fish species.
[3] Lund, J., Hanak, E., B. Thompson, B. Gray, J. Mount, K. Jessoe. “Why Give Fish Flows Away for Free During a Drought?” California WaterBlog, Feb. 11, 2014
[4] U.S. Bureau of Reclamation. “Colorado River Basin Water Supply and Demand Study“, December 2012; Diffenbaugh, N.S., Swain, D.L., Touma, D. “Anthropogenic warming has increased drought risk in California,” PNAS 2015 : 1422385112v1-201422385
[5] 
For a discussion of this idea, see Hanak, et al. “Managing California’s Water: From Conflict to Reconciliation.” Public Policy Institute of California. 2011. Chapter 7.
[6] Hanak et al. “Managing California’s Water: From Conflict to Reconciliation.” Public Policy Institute of California. 2011. Chapter 9; Thompson, B. 2012. “A federal act to promote integrated water management: Is the CZMA a useful model?” Environmental Law: vol 42-1, p. 201-240

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Q & A on survival of California’s delta smelt 

William La Jeunesse and Petr Moyle. PhotoL Fox News and John Stumbos/UC Davis

William La Jeunesse, Los Angeles-based correspondent for Fox News recently interviewed Peter Moyle, UC Davis professor of fish biology, on the survival of the delta smelt  Photo: Fox News and John Stumbos/UC Davis

Four years of severe drought and decades of huge water diversions appears to have pushed delta smelt to the point of no return. State biologists netted only a single smelt last month in trawl of 40 sites in San Francisco Estuary, the species’ only home. The record-low catch came less than a month after UC Davis fish biologist Peter Moyle warned state officials to prepare for the smelt’s extinction in the wild.

Fox News correspondent William La Jeunesse recently spoke with Moyle about the survival of the much politicized tiny fish, a federally designated “threatened” species with protections that at times have curbed the flow of water to many cities and farms. The interview resulted in only 10 seconds of air time. However, the reporter and biologist later agreed to post on California WaterBlog this more insightful series of questions and answers they had drafted in preparation for the interview.

Q.  Given the latest smelt survey, is it fair to say the species can no longer survive on its own?

It is fair to say that most native species in the Delta cannot survive on their own; all require some form of human assistance. Smelt are just leading the pack as the species in greatest need of help. The goal now should be to keep the population from blinking out. Smelt populations won’t rebound during a drought, but if some fish survive, they could struggle back from the brink when precipitation and freshwater flows increase. The same is true for other species affected by environmental changes to the estuary.

Q.  This species was once one of the most abundant fish in the Delta. What happened?

The Delta is an incredibly altered place. The pace of change accelerated after the State Water Project went online in the mid-1960s and Delta exports increased. The resulting changes to the Delta ecosystem created conditions less favorable to native species.

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Peter Moyle aboard a UC Davis research vessel in Suisun Marsh, has been studying delta smelt since 1975. Photo by Amy Quinton, Capital Public Radio

Exports continued to increase in the 1980s, even during droughts. Delta smelt populations declined and invasive species increased, reducing the smelt’s food supply and preying on its eggs and larvae. Delta flows dragged smelt through the lethal export pumps. Meanwhile, contaminants draining from farms and cities became more pervasive.

By the late 1990’s much of the Delta had become too warm and uninhabitable for smelt. This largely confined them to an arc of habitat from the North Delta to Suisun Bay in diminishing numbers. Then, in 2012, the current drought kicked in, making habitat conditions even worse for the fish.

Q.  Delta smelt supporters say it’s not about a single species, but rather an ecosystem of several native fish in need a healthy delta with natural freshwater inflows. Yet some farmers almost solely blame the delta smelt for massive reductions in surface water deliveries and suggest that if the species is “functionally extinct,” more water could be released. What is your take?

The Delta ecosystem has indeed changed in major ways that make it less habitable for native fish. The delta smelt is one of six government-protected fish species dependent on the Delta. The others are winter- and spring-run Chinook salmon, green sturgeon, longfin smelt and Central Valley steelhead. Several more are candidates for listing.

Those who blame the delta smelt for our water problems are in denial about the severity and frequency of natural droughts in California. In fact, the “water user” that has suffered most during this drought is the environment. From a fish perspective, California has been in an increasingly severe drought since the 1960s. This is reflected in the decline of delta smelt and other fish.

Photo: UC Davis

An adult delta smelt caught in a survey of fish in the Sacramento-San Joaquin Delta. Photo: U.S. Fish & Wildlife Service

In some years, Delta exports have been reduced by as much as 15 percent to protect delta smelt and winter-run Chinook salmon. But this water has benefited the entire Delta ecosystem, which has steadily been deprived of its freshwater inflows over the years.

Most of the fresh water that “flows to the sea” comes into the Delta during the summer to protect Delta farming. This water also keeps salt water away from the big pumping plants that export drinking water to our cities and irrigation water for farms. In addition, about half the river water is diverted before it even reaches the Delta.

So, while at times “Delta smelt water” could have provided more water for export, those amounts were small and certainly not nearly enough to alleviate drought conditions.

Q.  What is the case for saving a fish that many call unremarkable and lacking any commercial value? Why should taxpayers spend millions to save it?

Caring for delta smelt is caring for the Delta. This fish is a good indicator of the estuary’s health. If delta smelt are alive and well, other fish, birds, mammals and plants also will thrive.

The delta smelt is a part of California’s heritage. It is one of more than 80 fish species found only in California. Most are in decline. Conserving these California-only species means conserving unique aquatic habitats throughout the state. So caring about these native fish is really about caring for what’s unique and special about California’s environment.

The smelt is really a beautiful little fish, very delicate and translucent. Japanese harvest a similar smelt species and value it highly for its delicate flavor. I would like to see the delta smelt become so abundant that we could harvest it for export to Japan, like almonds.

Through enactment of the state and federal endangered species acts, the people of California and the nation have deemed it immoral to allow a species to go extinct, if preventable. The laws tell us we should be taking extraordinary measures to prevent extinction.

I see the plight of delta smelt as a test of our willingness as citizens of California to protect our very special fauna and flora for future generations to enjoy and admire. Nevada fish biologist Jim Deacon was lauded for protecting big places through little animals. Wouldn’t that be a great way for our generation of Californians to be remembered?

Q.  What are they doing at the UC Davis Fish Conservation and Cultural Laboratory to save the delta smelt?

This hatchery program was set up in 2007 as a hedge against the smelt’s extinction in the wild and a source of fish for laboratory studies of the species’ physiology, toxicology and behavior.

Delta Smelt Refuge facility with tanks for genetically diverse smelt populations.

Delta smelt rearing tanks in captive breeding facility run by UC Davis near Stockton. Photo by Dale Kolke/California Department of Water Resources

Thanks to Joan Lindberg and Tien-Chieh Hung, the lab became one of the most sophisticated aquaculture operations in the world. Mating is carefully controlled. A few wild smelt are brought in each year to mate with hatchery smelt to avoid creating fish more adapted to the hatchery than to the wild. About 20,000 artificially propagated, genetically diverse smelt are there at any given time. This is an extraordinary accomplishment given how delicate these fish are.

Q.  What do you see as the policy failures by water agencies, both on water supply and demand?

I am a fish expert, not a water expert, so I will try to answer this from the perspective of fish.

I did my first statewide assessment of California native fishes in 1975 and, as far as I could tell, most were doing okay — including delta smelt. But after that, conditions for native fish quickly deteriorated.

Until the 1980s, water policy largely ignored fish, except salmon. Even then, it was largely thought hatcheries could solve all problems. As water projects developed, the fish clearly needed legal protection. But the needs of fish were largely ignored.

Water management increasingly failed to protect Delta fishes during the 1980s and 90s, resulting in the listing of six species under the federal and state endangered species laws. The listings brought attention to the fish but real action was delayed while studies were being done – studies that never seem to be finished.

Though water in California is over-allocated, the water agencies made optimistic assumptions about water availability for fish and were optimistic about engineering their way out of shortages.

Our understanding of how much precipitation is “normal” for California is based on a short record. Analyses of tree rings and other data suggest extended droughts are common in California and other parts of the West, but our water management seemingly continues to be based on a period when we had a lot of rain and snow and little concern for fish.

The most recent manifestation of this mindset is the “coequal goals” mandate of the state’s Delta Stewardship Council and the Bay Delta Conservation Plan. Under this principle, future provisions of water for environment and for human use would have equal weight.

The problem is that water for the environment — water for fish — is already way under-allocated. Truly balancing human and environmental needs would inherently require allocating more water for the environment.

Fox News anchor Chris Wallace questions correspondent William La Jeunesse on the fight over the delta smelt amid the California drought. The national story aired April 30. Click on image to view story.

Fox News anchor Chris Wallace and correspondent William La Jeunesse report on the fight over the delta smelt amid the California drought. The national story aired April 30. Click on image to view story.

Further reading

Bennett WA. 2005. “Critical assessment of the delta smelt population in the San Francisco Estuary,” San Francisco Estuary & Watershed Science News

Boxall, B. “A small fish caught in a big fuss.” Los Angeles Times. Feb. 2, 2011

Fox News. “Fight over saving endangered fish amid California drought.” April 30, 2015

Moyle, PB. 2015. “Prepare for extinction of delta smelt.” California WaterBlog. March 18, 2015

Quinton, A. 2015. “Endangered delta smelt may be extinct.” Capital Public Radio. March 16, 2015

Ruyak B. 2015. “UC Davis fish biologist: delta smelt ‘functionally extinct’.” Capital Public Radio, Insight with Beth Ruyak. March 18, 2015

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Keeping accounts for groundwater sustainability

Rob Gailey, Graham Fogg, Thomas Harter, Jay Lund, Helen Dahlke, Richard Frank, Tim Ginn, Richard Howitt, Mimi Jenkins, Bonnie Magnuson, Josué Medellín-Azuara, and Samuel Sandoval Solis

The Sustainable Groundwater Management Act of 2014 creates an opportunity to establish standards for the way California accounts for its stores of groundwater, which provide up to 60 percent of the state’s water supply during droughts.

The new law requires regional agencies to prepare Groundwater Sustainability Plans for “high” and “medium” priority groundwater basins, as designated by the California Department of Water Resources [1].

Earlier this year we suggested an outline for developing the plans in an orderly, scientific and transparent fashion. Central to each plan will be a water budget analysis, which catalogs the conceptual framework and available data on the hydrologic function of groundwater basins. The water budget serves as a summary of knowledge on a basin and a potent screening tool to evaluate approaches for sustainable management.

Water budget analyses may include 1) assessment of conditions during previous periods when current sustainability criteria would have been met and 2) consideration of options to adjust future basin inflows and outflows to achieve sustainability.

If time, financial resources and data availability are limited, the water budget analysis may be the only assessment performed for a Groundwater Sustainability Plan. In other cases, the water budget may be the starting point for more detailed modeling, which is often essential for reducing water budget uncertainties and ascertaining effects of various management options.

A water budget compares inflows and outflows to show change in storage:

Inflows – Outflows = Change in Storage

Because the left side of the equation equals the right side, the term “water balance” is also used. The change in storage will average close to zero over long periods of sustainable management.

Each term in the equation can have several components:

  • Inflows: groundwater flow from neighboring groundwater basins; seepage from natural streams, lakes and wetlands; recharge from precipitation, stormwater runoff, and agricultural return flows; and intentional recharge from infiltration ponds or wells
  • Outflows: well pumping; groundwater flowing to neighboring basins; seepage to springs, rivers, wetlands or lakes; uptake by plant roots
  • Change in storage: gains and losses of water within aquifers, ranging from water stored in coarse sands and gravels to finer silts and clays (where losses are the main cause of land subsidence and are not reversible)

Although the groundwater balance concept is simple, estimating components of a water budget can be challenging. Most wells in California are not metered. Water flows are otherwise hard to measure because they generally occur over large areas and long periods of time. Underground flows, of course, cannot be measured directly because they are hidden. Also, the terms of water budget equations vary over time, making results depend on the period analyzed [2].

Here are some approaches for estimating water budget components:

tablefinal.png

Importantly, many of the water budget component estimates in the table have large uncertainties and are both time dependent and interdependent. In other words, a groundwater budget is transient, and the transient changes are interdependent among the components. Fortunately, construction and calibration of groundwater flow models can reduce uncertainties and represent transients and interdependencies.

Water budget components and approaches for estimating quantities will vary among basins because of differences in hydrogeologic conditions. For example:

  • Types of recharge and their relative importance will vary among basins. In the Tulare Lake hydrologic region, recharge generally occurs 1) on eastside alluvial fans from precipitation and snowmelt, 2) throughout the basin from agricultural return flows and 3) at artificial recharge sites. In contrast, recharge in the North Coast and Central Coast regions generally occurs from localized agricultural return flows and from more broadly distributed precipitation and runoff.
  • Groundwater inflow and outflow at basin boundaries will be easier to estimate for some basins more than others. For coastal basins, water-bearing formations are sometimes located in valleys cut into much less permeable rock. So it may be reasonable to estimate there is no flow across some basin boundaries. The task for some coastal basins will be evaluating flows at the boundary with the ocean. In the Central Valley and in some regions of Southern California, however, boundaries between basins are usually porous, requiring calculations of inter-basin flows.
  • Evaluating changes in storage will depend on basin geology and variations in groundwater levels over time. Analysis would likely include 1) spatial interpolation of water levels in coarse sediments at different times and 2) quantifying contributions of water stored in different sediments [3]. This evaluation may be easier for less complex basins or basins with better characterization and monitoring.

Preparing Groundwater Sustainability Plans will involve uncertainties, as does most decision-making in life. Stakeholders and experts will differ in their opinions on the significance of the uncertainties in water budget analyses and in projections of future climate, land use, surface water deliveries and other conditions. However, concerns over uncertainties need not preclude action. Often there is sufficient information to proceed on some important actions, even as information to support additional actions is being developed.

A constructive approach for moving forward with the plans may be to 1) accept the inevitability of some uncertainty, 2) implement actions based on current information and 3) plan to adjust actions as new information becomes available.

Uncertainty analysis can play an important role in developing and evaluating management approaches. New data can come from additional basin characterization; monitoring groundwater system responses to management actions; refinement of groundwater budgets, models and ancillary calculations; and updated information on management plans and actions. Water budget analysis will prove useful in performing uncertainty analysis and accounting for new information as it becomes available.

The authors, all with UC Davis, have been examining implementation of California’s Sustainable Groundwater Management Act.

[1] Initial Groundwater Basin Prioritization under the Sustainable Groundwater Management Act

[2] Periods of analysis on the order of several years to decades are likely to be the most useful for evaluating issues related to sustainable management.

[3] Releases from storage occur over the full range of sediment textures in aquifer systems. The time scales of the releases can vary and is longer for finer sediments. Specific circumstances will dictate approaches used to estimate volumes of groundwater released from storage. In some cases, modeling may be used to integrate information about a groundwater system and help estimate storage releases.

Further reading

Lund, J, T. Harter, R. Gailey, G. Fogg, R. Frank, H. Dahlke, T. Ginn, S. Sandoval Solis, T. Young, A. Fisher, R. Langridge, J. Viers, T. Harmon, P. Holden, A. Keller, M. Kiparsky, T. Greene, S. Mehl, J. Gurdak, S. Gorelick, and R. Knight. 2015. “Creating effective groundwater sustainability plans.” California WaterBlog. March 4, 2015

Lund, J. 2015. ”When water counts, accounting matters.” Los Angeles Times. April 24, 2015

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Water rationing and California’s drought

Collecting and using household wastewater to water plants. Photo by Florence Low/California Department of Water Resources

Collecting and using household wastewater to water plants. Photo by Florence Low/California Department of Water Resources

By Jay Lund

California cities and water utilities will be stressed to meet the state’s aggressive urban conservation mandates in this fourth year of drought.

Following Gov. Jerry Brown’s executive order, the State Water Resources Control Board developed specific reduction targets for each major urban water supplier, ranging from 8 percent to 36 percent of per-capita water use in 2013. The proposed “emergency” cutbacks would take effect as early as June 1 and last nine months, to Feb. 28.

For most cities, 2015 will be the first year in the four-year drought that deeply affects them; it has been mostly an environmental and agricultural drought until now. Statistically, a fifth dry year seems likely.

If the urban water-use reductions were imposed gradually over a longer period, they could be achieved through changes in plumbing and building codes, landscaping ordinances and water pricing. But for urgent drought conservation this year, such measures are unlikely to yield enough water savings. Well-motivated voluntary conservation efforts will help, but not by much — usually 5 percent to 10 percent reductions use, as seen last year.

For this year, many California cities will look to water rationing, particularly those facing reductions of 15 percent or more. Some common forms of water rationing are outlined in the table below. 

California began serious urban water conservation during the 1976-77 drought and expanded these efforts during and after the 1988-92 drought.  The rapid imposition of  substantial statewide reductions this year will shape urban water conservation for years to come. 

The reductions will make water available for cities in the future, as well as for the environment and agriculture. But they will also pose challenges for wastewater systems designed for higher flows. 

The substantial reductions this year, and likely next year, will have major financial and rate-making implications for local water utilities, which are the financial and innovation backbone (or perhaps exoskeleton) of California’s decentralized water system

Screen Shot 2015-05-02 at 5.55.42 PM.png

Jay Lund is a professor of civil and environmental engineering and director of the Center for Watershed Sciences at UC Davis

Further readings

Lund, J.R. and Reed, R.U. “Drought Water Rationing and Transferable Rations.” Journal of Water Resources Planning and Management, ASCE, Vol. 31, No. 6, pp. 429-437, November 1995

Rogers, P. “San Jose’s new drought rules: How they will affect you.” San Jose Mercury News. April 27, 2015

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Jobs per drop irrigating California crops

Various crops grown in Monterey County. * FOR EDITORIAL USE ONLY *

Farmworkers harvesting cauliflower in Monterey County. Photo by John Chacon/California Department of Water Resources

By Josué Medellín-Azuara, Jay Lund and Richard Howitt

Some of the most popular drought stories lately have been on the amount of what water needed to produce food from California, as a consumer sees it — a single almond, a head of lettuce or a glass of wine. The stories are often illustrated with pictures of common fruits, nuts and vegetables in one column and icons of gallon water jugs representing their water usage in the other.

But there are more than two columns to this story. The amount of water applied to crops also translates into dollars and jobs — the main reasons for agriculture’s existence in California. 

Here are multiple columns of data to better understand California’s crop water use and the revenues and jobs it is intended to produce.

Prepared by Josué Medellín-Azuara, Research Scientist, UC Davis Center for Watershed Sciences. jmedellin@ucdavis.edu

Prepared by Josue Medellin-Azuara with the assistance of Nadya Alexander, UC Davis Center for Watershed Sciences. Contact: jmedellin@ucdavis.edu

The charts below illustrate the data. A principal conclusion is that crops with the highest economic “pop per drop” — revenue per net unit of water — also usually have the highest employment per land area and water use.barchart

IA


CWU


GAR


JPC


Other observations from the data:

  • As a global food basket for fruits, vegetables and nuts, California’s net crop water use in 2010 was about 20 million acre-feet on 9.4 million acres of irrigated land. Gross revenues were about $36.7 billion.
  • The top 5 crop group in revenue per unit of water use are grown on about 25 percent of California’s irrigated cropland and account for 16.4 percent of all the net water use. Those crops are responsible for two-thirds of all crop-related employment.
  • Grains, livestock forage and other field crops rank lower in revenue and jobs per drop because the farming is highly mechanized, requiring relatively little labor. These crop groups nonetheless are critical to the livestock industry. California’s dairy production is the largest in the country.
  • Vegetables, horticulture, fruits and nuts account for more than 90 percent of employment directly related to crop production.
  • Farm contractors, who provide bulk labor for growers, supply about half the labor force for most crop groups.
  • California agriculture accounts for about 400,000 full-time jobs (or their equivalent), including 172,000 in crop production, 29,000 in livestock and dairies and 193,000 in agricultural support services (contract labor). Some studies suggest that many California farm jobs  are part-time, with an average of two jobs for each full-time equivalent job.

California agriculture will use less water this year and in the long run. Several factors will lead to long-term reductions in farm water use in many areas of the state. Those include the state’s new groundwater legislation, ongoing salinization and urbanization of cropland, and increasing environmental water requirements.

The drought has raised understanding of these inevitable reductions. But the growing market value of California’s specialty crops and growing yields per acre and per gallon will keep California agriculture healthy in most cases

Growing scarcity of water for agriculture is probably best managed using water markets and pricing so the industry and the state can make the most of limited supplies. Efforts to impose detailed arbitrary limits on crops and regions are unlikely to serve the economic and environmental interests of California, but rather distract from discussions needed for long-term progress.

Josué Medellín-Azuara, Jay Lund and Richard Howitt are with the UC Davis Center for Watershed Sciences. Medellín-Azuara is a research scientist, Howitt is a professor emeritus of agricultural and resource economics, and Lund is a professor of civil and environmental engineering and director of the center.

Further reading

California Department of Water Resources. 2015. “Irrigated crop acres and water use.” Last visited April 24, 2015

Martin P. and Taylor E. 2013. “Ripe with Change: Evolving Farm Labor Markets int he United States, Mexico and Central America.” Migration Policy Institute, Washington, D.C. Last visited April 24, 2015

Medellin-Azuara J. and Lund J.R. 2015. “Dollars and drops per California crop.” California WaterBlog. April, 14, 2015

Sumner D. 2015. “Food prices and the California drought.” California WaterBlog. April 22, 2015

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Food prices and the California drought

Water, a precious commodity, irrigates a field in southern San Joaquin Valley. wheat. near Bakersfield. Photo nu John R. Chacon/California Department of Water Resources

A wheat field near Bakersfield, Calif., March 2015. Photo by John Chacon/California Department of Water Resources

By Daniel A. Sumner

California’s drought has been tough on farms and especially painful for farm workers in the Central Valley. But consumers of California-produced food have been spared large price increases.

Despite the severity of the drought and California’s dominant market shares in many foods – especially fruits, vegetables and tree nuts – consumers saw only small food price effects last year and are unlikely to notice much price impact in 2015. The reasons derive from California’s geography, irrigation plumbing system, the economics that drive the distribution of irrigation water among crops and the basics of food supply and demand.

The reduction in irrigated crop acreage – about a half million acres last year and likely much more this year – has been and will be mostly field crops such as rice, cotton, hay and corn silage. These crops affect food prices only indirectly and global markets establish prices for most of these crops. California’s output is a small share, and so has little effect on prices.

View of strawberry fields, Elkhorn Sough Reserve and the Monterey Bay.

Strawberry fields on Monterey Bay, Calif., 2013. Photo by John Chacon/California Department of Water Resources

The food crops for which California has a large market share and California production can affect prices – almonds, pistachios, walnuts, fruits, grapes, berries and many vegetables – typically generate high revenue per unit of water. So, where possible, farmers continue to shift scarce and expensive water from field crops to these crops. Farmers have added incentives to shift water to their tree and vine crops to protect their long term investments in these perennial crops.

Additionally, many of the produce crops grown predominantly in California are concentrated in the state’s coastal regions where cuts in surface water deliveries have been smaller and groundwater remains available.

California dairy production will be down this year mostly because of low global dairy product prices, but also because the drought has caused higher California hay and silage prices that boost production costs. But the tendency of drought to slightly raise national prices of cheese, butter and milk powder is swamped by national and global market factors that have lowered dairy product prices.

harvesting swiss chard.

Harvesting swiss chard in coastal California, 2013. Photo by John Chacon/California Department of Water Resources

California ranchers have reduced their cattle herds because of dry pastures, but this has had little effect on beef prices because the state’s share of the North American cattle production is so small.

Even when farm prices rise, retail food prices often show little response. The farm commodity share in what consumers pay tends to small compared with other costs in the chain of marketing, labor, transportation and packaging. That means even a 10 percent higher price of a food commodity at the farm could mean a price hike of only 2 percent or 3 percent for consumers.

The impact of the California drought nationally and internationally may not be noticeable given all the other variables that determine food prices. For example, this year the strong dollar is reducing export demand, especially for dairy products and tree nuts.

The bottom line is farmers are scrambling to efficiently use what water they have –largely stored in underground aquifers – to keep food supplies available, especially for crops where substitutes from elsewhere are not readily available.

What if this drought continues? Clearly, each year of drought will force farmers to idle more cropland, eventually affecting prices for California specialty crops. Beyond that, no one has yet carefully developed a timeline of consequences for water supply, food production and food prices should the drought continue for many more years.

Daniel A. Sumner is director of the UC Agricultural Issues Center and the Frank Buck Professor in the Department of Agricultural and Resource Economics at UC Davis.

Further reading

McClurg, L. 2015. “Drought not likely to cause higher grocery billsCapital Public Radio. April 20, 2015

York T. and Sumner DA. 2015. “Why food prices are drought-resistant.” The Wall Street Journal. April 12, 2015


Upcoming event

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Integrated Environmental Modeling
Ocean, estuarine and watershed systems
May 21-22, 2015
UC Davis

Please join us for this international workshop on advancing environmental modeling. 

We are bringing together experts from Europe, Asia and across the U.S. to explore ways to improve the development, application and integration of modeling for multipurpose management of ocean, estuarine and watershed systems.

Community-based modeling, public domain platforms and integrated modeling from various systems will be discussed. A white paper developed from workshop proceedings will be prepared and released to improve modeling integration. 

Admission is free, but please register in advance:  

REGISTER HERE

Further information: integrated modeling.ucdavis.edu

Organizers: Peter Goodwin and Chris Enright, Delta Stewardship Council/Delta Science Program; Josué Medellín-Azuara and Jay Lund, UC Davis Center for Watershed Sciences; Benjamin Bray, California Water and Environmental Modeling Forum

Sponsors: National Science Foundation in partnership with the California Water and Environmental Modeling Forum and the International Association for Hydro-Environment Engineering and Research

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