How much do farmers pay for water?  Is agriculture
still important to the State’s economy?  Does farm
water use harm the environment?  Find the answers
to these and other questions about farm water.

How much do farmers pay for water? Is agriculture still important to the State’s economy? Does farm water use harm the environment? Find the answers below to these and other questions about Central Valley Project water.

The U.S. Bureau of Reclamation is in the process of renegotiating, or has concluded negotiations and executed, some 231 new water contracts for CVP water deliveries to California farms, cities and individuals. These contracts are the result of an environmental review and subsequent negotiations that have been underway since 1993 as required by the Central Valley Project Improvement Act (P.L. 102-575). The 190 negotiation sessions were publicly noticed, open and attended by members of the public and various advocacy groups.

There have been numerous false and misleading claims and allegations about the project, the contract process, federal law and farming in California. The following is an attempt to set the record straight.

Myth: New long-term CVP contracts will lock up a large portion of the state’s water supply for many years to come, impairing California’s ability to manage its water supplies in the future.
Fact: Continued dependable deliveries of water from the Central Valley Project to the farms and cities that rely on it will play a significant role in meeting California’s water needs in the future. The CVP supplies seven million acre feet of water – nearly 20 percent of California’s developed water supplies – to 3.4 million acres of farmland, more than 3 million people in more than 50 California cities, counties and rural communities. The CVP also supplies more than 1.5 million acre feet of water for fish and wildlife purposes.
Managing California’s water future will require a great deal of careful thought, creativity, collaboration and energy. Taking water away from one important economic sector – agriculture – and redirecting it to other uses is not an appropriate or effective water management strategy.
Myth: Because of agriculture’s declining relative share of the state’s economy, CVP water supplies could be better utilized by being directed away from farming and used instead by cities and environmental programs.
Fact: While farming’s relative share of the state’s economy has declined from its historic point, farming continues to play a vital role in the state’s and nation’s economy. California farmers produce more than half the nation’s fruits, nuts and vegetables, generate approximately $28 billion in gross receipts annually, employ 1.1 million people and create $60 billion in personal income each year. One third of the state’s farmlands depend on water from the CVP. Moreover, the relative inexpensive agricultural produce and grains produced in California helps to maintain affordable food costs for lower income Californians and state and federal assistance programs.
The farms and cities that receive CVP water have legitimate, documented needs for their CVP supplies.
Myth: Changes in agriculture and California demographics indicate agriculture will require less water in the future.
Fact: Farmers in California have become increasingly water-efficient, not because they need less water but because they find it increasingly difficult to obtain the water they need. Reductions in water deliveries to farms produces very predictable results – reduced yields, reduced farm income, increased farm failures, reduced sales of farm equipment and supplies and increased dislocation for farm workers and rural communities. These adverse financial impacts can create broader societal consequences. All indications are that, provided a reliable and adequate water supply, agriculture will continue to be a dynamic and important contributor to the state’s and nation’s economy.
Some critics of the CVP point to the Westlands Water District, which is in the process of reducing the number of acres in irrigated production, as an example of why CVP supplies to farmers should be reduced. For most of the past decade, Westlands and other water districts on the west side of the San Joaquin Valley have received only a fraction of their full CVP entitlement. To augment its limited CVP supplies, Westlands purchases or pumps an additional 400,000 to 500,000 acre feet of water each year. Thus, even after removing 100,000 acres from irrigated production, the 1.15 million acre feet Westlands is entitled to receive from Reclamation provides just 2.5 acre feet of water per acre, well below the average water used by California farm operations. Further, nothing in the new contracts assures the District it will receive 100 percent of its allocations in the future.
Myth: The use of CVP water by California farmers and cities harms California’s environment.
Fact: The use and allocation of CVP water supplies, including Sacramento River water rights settlement contractors and San Joaquin Exchange contractors whose water rights predate the CVP, is consistent with existing state and federal environmental law, regulation and policy. This includes the Endangered Species Act, Clean Water Act, elements of the Central Valley Project Improvement Act, California’s constitutional requirements of reasonable and beneficial use and many others.
Moreover, in the past decade, an unprecedented state and federal effort has resulted in one of the most comprehensive restoration programs in the United States designed to protect, restore and enhance fish and wildlife habitat throughout the CVP service area. These efforts include the annual dedication of more 1.3 million acre feet of water for fish and wildlife purposes, plus water supplies acquired for the CALFED Environmental Water Account, and a $50 million annual restoration fund for environmental purposes. To date, CVP contractors have contributed approximately $460 million to this fund.
Farmers in the CVP service area have also partnered with the U.S. Fish and Wildlife Service, the California Department of Fish and Game, and conservation groups such as the Nature Conservancy, Ducks Unlimited and the California Waterfowl Association to create and enhance habitat for waterfowl, shorebirds and other wildlife. And nearly all of the larger Sacramento River irrigation districts have installed state-of-the-art fish screens to protect young salmon and steelhead, including installation of a $76 million fish screen for the Glenn Colusa Irrigation District, the largest fish screen of its type in the world..
Myth: The Bureau of Reclamation did not provide adequate opportunities for public participation in the contract renewal process and have otherwise not complied with federal law.
Fact: Reclamation’s contract renewal process has been universally open to the public, other state and federal agencies and critics of California’s farmers. Ironically, many of today’s critics of Reclamation’s contracts participated in the development of the Central Valley Project Improvement Act which directed Reclamation to renew these contracts in the manner now being followed. Immediately after the CVPIA’s 1992 passage, Reclamation initiated a Programmatic Environmental Impact Statement (PEIS) on the new law, including the proposed renewal of its contracts. Reclamation held 190 public workshops in cities and communities throughout California and completed consultations required under the National Environmental Policy Act and the Endangered Species Act. All of these steps are designed to protect the public’s interest and their rights.
Representatives of the Natural Resources Defense Council, a leading critic of farming and the CVP contracts, attended many of these meetings and submitted extensive written comments to Reclamation on the proposed contracts.
Myth: CVP water is heavily subsidized and under priced and therefore encourages waste.
Fact: All farmers who receive water from the CVP are required to repay their share of the federal government’s cost to build, maintain and operate the CVP. Currently, irrigators are obligated to repay the government more than $1.1 billion to pay for the initial construction of the vast project. Farmers who comply with acreage limits required by Reclamation law are not required to pay interest on the debt – the only subsidy they receive. Farmers who do not meet Reclamation law requirements are required to pay the full cost of building the CVP, including interest.
New CVP contracts contain significant increases in water rates and are intended to result in repayment of all CVP capital costs by 2030.
While they can vary significantly from one region of the state to another, the costs of water to farmers has increased significantly in recent years. Increased water costs, and chronic reductions in CVP allocations, have resulted in major improvements in the efficient use of irrigation water.
Myth: New CVP contracts encourage water transfers, which allow farmers to profit.
Fact: New CVP contracts do indeed allow water users to transfer or sell CVP water on a voluntary basis. Voluntary water transfers are a very effective and important tool for water management in California, especially during times of water shortages. State and federal laws and policies encourage the use of voluntary water transfers. Environmental groups and Congressman George Miller also have, in the past, advocated development of voluntary water markets to help ration and allocate California’s water supplies.
Myth: New CVP contracts call for increased deliveries to farmers.
Fact: Not one of the 231 CVP contracts renewed or being negotiated calls for increased water deliveries. Critics of farming have made this claim based on the argument that during most of the past decade, many farmers in California received far less water than their contracts entitled them to receive, largely because of water quality and fishery regulations. New contracts call for the same amount of water and make no changes that would increase the likelihood farmers will see 100 percent of their water supplies any time soon.
Myth: The beneficiaries of CVP water are large corporate farming operations.
Fact: Very few, if any, of the farms that rely on CVP water are corporate farms. Reclamation law, which limits farming operations to 960 acres, makes it very difficult for large corporations to own and manage farms that receive CVP water.
According to the U.S. Department of Agriculture, only one percent of the 64,000 farms in California are owned by corporations. More than 80 percent of California farms are owned by individuals or individual families. Another 5.4 percent are owned by family corporations and 11.2 percent are owned by partnerships.
Farmers in California are no less family farmers than are farmers anywhere else in the world. Most live on or near their farm and work their fields on a daily basis. Some farming operations in California are quite large, in part because increasing water costs, the need for costly irrigation and cultivation technology, and global competition for farm commodities have made it necessary for farms to grow or die. Still, they are family farming operations in the truest sense of the word.

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