Water Contract Renewals Stir Debate Between Environmentalists and Farmers in California

The New York Times > National > Water Contract Renewals Stir Debate Between Environmentalists and Farmers in California

Water Contract Renewals Stir Debate Between Environmentalists and Farmers in California
By DEAN E. MURPHY

AN FRANCISCO, Dec. 14 - The time has come for thousands of farmers in California to renew their water contracts with the federally run Central Valley Project, the country's largest irrigation system and for many years a major source of friction between the state's powerful agricultural and environmental interests.

The farms served by the Central Valley Project cover nearly 4,700 square miles and get about 20 percent of California's water supply. That has made the new contracts, some for 25 years and some for 40 years with options to renew, the center of a debate over how much water in the state should be dedicated to growing crops and at what price.

When construction of the Central Water Project began in 1937, the idea was to protect the state's farmland from water shortages and floods and provide cheap water for family farmers. But as the state has grown in population, there has been a growing push by cities and environmentalists to break the farmers' grip on the water, or at least make them pay more for it.

A report to be released on Wednesday by the Environmental Working Group, an advocacy group that has tracked federal subsidies in agriculture, estimates that the subsidies in the Central Valley Project are worth up to $416 million a year at market rates for replacing the water. The calculation, based on data collected by the group over 16 months, shows that the median subsidy for a Central Valley farmer in 2002 was $7,076 a year and for the largest 10 percent of the farms, the average subsidy was worth up to $349,000 a year.

Five years ago, the United States Bureau of Reclamation, which runs the Central Valley Project, began negotiations on 223 water-supply contracts with individual farmers and big irrigation districts, serving farmers from Redding to Bakersfield. Those negotiations are expected to be wrapped up early next year, and many critics of the bureau, including the Environmental Working Group, are not happy that they will apparently continue supplies of federally subsidized water for farms.

"Reforms to make details of water subsidies public, limit the amount and value of water subsidies to large farms and encourage conservation by pricing water at rates closer to market value are needed to end the disaster for taxpayers and the environment wrought by the Central Valley Project," the Environmental Working Group report states.

Many farmers reject that analysis, including the president of Woolf Enterprises, a family-owned farming business based in Huron, near Fresno, which was identified by the group as the recipient of $4.2 million in subsidies. Woolf Enterprises grows almonds, cotton, tomatoes and other crops on about 20,000 acres in the area served by Central Valley Project.

The president, Stuart Woolf, said the land was a collection of farms owned by members of his family, each 960 acres, the maximum allowed under federal rules. Mr. Woolf said the family business had survived by adding more acreage and by introducing savings through economies of scale - including large savings on its water use.

Though he had not seen the Environmental Working Group's full calculations, he scoffed at the suggestion that his farm had received such a huge benefit, saying, "The numbers just don't add up."

"They would indicate the purpose of the Central Valley Project is to have small family farms," Mr. Woolf said. "I would contend the small family farm won't be able to survive in today's ag environment. A small family farm can't make the investments that are needed."

Representative George Miller, a California Democrat who has long been at odds with the state's agricultural interests over water, has accused the Bureau of Reclamation of "rushing to put these contracts in place" at a time when the reliability of the state's water supplies is in question. Mr. Miller said the contracts would amount to a huge windfall for some farmers, who under a law he helped write in the early 1990's would be entitled to sell the water to urban water districts at marked-up prices.

"What these guys are doing is freezing in time the massive subsidies that go to the largest and wealthiest farmers in the state, and who are then going to sell it back to the taxpayers," he said in a phone interview from Washington. "It is a great gig if you can get it."

Officials with the Department of Interior, which oversees the reclamation bureau, defend the new contracts as keeping with the bureau's mission since 1902 of encouraging agricultural development in the West. Though the costs of water supplies will remain below market value, the new rates will be high enough, the officials say, to recover the costs of building the Central Valley Project by 2030. Diversions for environmental purposes will continue.

"This is a big and important effort by the bureau to have contracts in place and ensure orderly operations for the project," said Jason Peltier, a deputy assistant secretary for water and science. As for the bureau's critics, Mr. Peltier said, "I suppose we will have to agree to disagree."