California farmers pray for rain

I want to reassert my strong belief that we really do have more options than we think. That is very important to remember because we are also faced with more serious problems than we realize. For some time now, the global water crisis has been lurking just below the mainstream media's radar screen. We should not be surprised to learn that humanity's moderation of Earth's atmosphere and climate is having major impacts on the planetary water cycle.

That doesn't make what's happening any less disturbing. A couple of days ago I posted a story on China's water problems and its effects on agriculture there. Nature may be poised to reclaim tens of thousands of California farmland and transform them back to what she originally had in mind -- arid desert. (GW)

Shrinking Water Supplies Imperil Farmers

By Jim Carlton
Wall Street Journal
February 10, 2009

MENDOTA, Calif. -- Dwindling water supplies are compounding economic woes in California's Central Valley, causing farmers to leave fields fallow and confront the prospect of going under.

Bill Diedrich, a farmer in California's Central Valley, inspects his almond trees. His nephew, Todd Diedrich, is letting 1,000 acres of his family's 1,500-acre farm go fallow this year to concentrate use of scarce water.

The state's water supply has dropped precipitously of late. California is locked in the third year of one of its worst droughts on record, with reservoirs holding as little as 22% of capacity. On top of that, a federal judge in Fresno last year issued a ruling in an environmental lawsuit that could restrict diversions to farmers by as much as one-third, as part of an effort to save an endangered minnow, the Delta Smelt.

The cutbacks hit big and small farmers in California's $20-billion-a-year agriculture industry. At the Harris Farms near Coalinga, managers said they plan this year to sideline 9,000 of 11,000 acres they used to plant with tomatoes, onions, broccoli and other vegetables. Harris has been reducing production for two years because of declining water, and now must cut even more than planned. "You feel like a general in a battle," said John Harris, chairman and chief executive of the business. "You're in constant retreat."

The water woes are hitting a region that is already reeling from housing foreclosures, the credit crisis and a plunge in construction and manufacturing jobs. In the Modesto metropolitan area, housing prices have declined 55% to $168,528 from their 2005 peak of $372,793, according to estimates by Zillow.com, a market-tracking site.

In Mendota, a Fresno County city of about 10,000 residents, unemployment soared to 35% in December -- high even for a community that is heavily made up of seasonal farmworkers. In greater Fresno, the unemployment rate shot up to 13.2% in December -- up from 9.8% a year earlier and higher than the statewide rate in December of 9.1%, according to unadjusted state estimates.

The Central Valley has been hit harder than most parts of California, in part because housing was so overbuilt there. But the valley faces a problem that much of the rest of the state doesn't: Its economy is heavily tied to the farming industry, which in turn is dependent on water imported from the mountains of Northern California.

The cutback in thousand of acres of production has sent a shock wave through farming communities up and down the 400-mile-long valley. "I look and look and there's nothing," said 25-year-old Gabriel Flores, an unemployed tomato cannery worker.

The farm crisis has compounded Mendota's housing woes: Its home sales fell to fewer than 10 in the fourth quarter of last year from nearly 100 in the second quarter of 2007; median prices dropped 37% to about $175,000 from a 2006 high of about $275,000, according to City-Data.com. As many as 1,000 people have lined up at the four food-box giveaways the city has organized since November; in 2007, city officials say they had to conduct only one food giveaway. On Jan. 13, the Mendota City Council passed a resolution declaring a local economic disaster. "We're becoming the Appalachia of the West," said Mayor Robert Silva.

Some farmers are trying to cope by drilling new wells to tap underground water supplies. But those are on the decline, too, and the wells are costly. Near Mendota, farmer Bill Diedrich said one of his neighbors spent $130,000 to drill down 1,700 feet, but didn't hit water and had to refill the hole.

Mr. Diedrich's nephew, Todd Diedrich, is letting 1,000 acres of his family's 1,500-acre farm go fallow this year to concentrate scarce water. But he faces a predicament shared by many other farmers: He still has to pay down a $210,000 note for a tomato harvester he and his father, Jim, bought recently and a $700,000 note for a drip-irrigation system they put in two years ago. "Ironically, we put in that system to conserve water," said 39-year-old Todd Diedrich.

If the water situation doesn't ease soon, industry experts expect numerous farmers to go out of business in a year or so. Particularly vulnerable are farmers who have loans tied to being able to secure water supplies, said Richard Howitt, a professor of agriculture economics at the University of California at Davis. In essence, these farmers use their water rights as collateral for loans that go toward crops and equipment.

The trickledown from the farm cutbacks, meanwhile, is rippling across the Central Valley. Officials at Ayala Corp., a Riverdale provider of contract farm labor, said they expect to find jobs for 4,000 workers this year, compared with 6,000 last year, 10,000 in 2007 and 15,000 four years ago. Mr. Howitt estimated that 40,000 to 45,000 workers in the valley's farming sector will lose jobs this year because of the water restrictions, with $1.2 billion in related lost wages.

For each lost farming job, businesses that support the workers suffer. At the Don Pepe restaurant in Firebaugh, owner Juan Miguel Marquez said his revenue fell 20% in 2008 because of fewer farm workers patronizing the establishment. A former farm worker himself, he said he expects revenue to fall an additional 40%. "All we can do is pray," Mr. Marquez said in Spanish, in a nearly empty restaurant. "We pray for rain."