Decision to buy Northern California water wasn't reached until late
Chico Enterprise Record - 2/15/03
By Heather Hacking, staff writer

Managers of Metropolitan Water District said they were still wrangling over the decision to buy Northern California up until late this week. They had to weigh many considerations including unknown winter rainfall, releases of water to keep the Delta salinity level in check, uncertainties of a complicated Colorado River negotiation and estimated State Water Project allocations.

Friday the Southern California water district, with 17 million customers, decided to make the call to spend nearly $10 million for 97,200 acre-feet from three local water districts.

Now it's time for rice growers in the area to pencil out their operating costs and condition of their land to decide whether to grow rice or sell water.

For some growers, the economics of the water payment, a government subsidy and less money spent on their fields makes sense. For others, a variety of factors have made them decide planting this year is best for their operation.

The Enterprise-Record interviewed four rice farmers, one from Western Canal Water District and three from Glenn-Colusa Irrigation District.

David Skinner

Farmer David Skinner isn't selling water this year because he made the business decision a few years ago to switch from rice to orchard crops.

He and his family members have been growing rice for years, but on land that is not fully suited for rice. Where farmers on ideal rice ground might apply 5 to 6 acre-feet of rice to each acre of land, Skinner said he was applying 7. He received surface water but he has to lift it onto his land, which increases his cost for electricity.

When the farm bill was being renegotiated just a few years ago, the political buzz was that subsidies for staple crops such as rice were going to be phased out.

At that time, Skinner said, he made the decision to convert his land to orchard crops. Much of the land around his rice fields was also being converted to orchards, which became another deciding factor, he said. Rice fields are sprayed with herbicides that can be a problem if they drift onto trees nearby, so this created a "logistical problem" Skinner said.

Converting land to orchard crops is about a two year process, Skinner explained. "We have to take ground that was designed to contain water and modify it drastically to make it drain and percolate,"

The past two years the Skinners didn't grow rice on that land. The way that the contract was written with Western Canal Water District, a grower can't participate in the water transfer if rice was not grown on the land the year before.

Carl Funke

Carl Funke wasn't certain which way he would go on the water sale, but this week he was tending towards farming. He farms in Glenn-Colusa Irrigation District's territory and is concerned that rice growers may someday become reliant on selling water as a source of revenue. "I'd rather see the district self-sustaining," he said.

However, every grower must make an economic decision for their operation, he said.

Funke said he also has to factor is that he leases his 400 acres. If he sold water, he would need to work out details with the property owner.

A few weeks ago Funke was tending toward taking part in the water transfer, but then word came out that prices for rice are edging up. A small difference in price would be enough to tip the economics toward planting, he said.

Two years ago he did take part in Glenn-Colusa's water transfer program, he said.

That was an easier decision because he had a particular part of his farm where the yields were low. It was easy to decide not to plant that acreage and sell the water.

But due to low yields he didn't plant that acreage last year, therefore he can't fallow it for the water transfer this year.

Funke isn't so sure he wants to take his high yielding land out of production. Plus, the current farm bill provides some of the government payments based on yields from 1998-2001. In the future the government support could very well be based on how much rice growers grow in 2003, Funke said.

He said in the future he'd like to see all of the Sacramento Valley working together on water transfer deals, rather than each district on their own. He also thinks the best long-term solution for the state's water needs is more water storage.

Leo LaGrande

Williams farmer Leo LaGrande said he hasn't decided yet whether or not to grow rice or sell water.

Farmers are businessmen, LaGrande said. Payments paid for rice are low, and each grower needs to look at their profitability.

In the long run it may be more profitable to leave some land out of production for a year. If he sells water he'll re-level his ground and put in new water structures. Plus, leaving the land idle for a year can produce excellent yields when the land is worked again, he said.

He said if water transfers begin to have more lead time, he would be able to plant oats and vetch in the winter, which doesn't require irrigation. Vetch fixes nitrogen in the soil and can create less cost of fertilization, LaGrande said.

Before government payments LaGrande said the industry had a mandatory 15-25 percent of land set aside. That created almost a crop rotation situation.

LaGrande said he thinks less California rice on the market could also help prices rise.

Two years ago LaGrande did take part in Glenn-Colusa's water sale and said it was good for his long-term profitability.

He said he caught up on a lot of projects on his farm.

"When we set land aside last time, we thought we would cut back on labor," he said. But with all the work he had done that wasn't the case."

John Amaro

As of this week, Glenn-Colusa rice farmer John Amaro said he was fairly certain he would take part in the land fallowing program, although he said he was "hesitant."

Commodity prices are low and have been for a long time, Amaro said.

With the water transfer, and government support, farmers would receive about the same amount of money as if they sold rice, but input costs would be down.

Farmers take risks each year that weather will affect yield or new pest problems will occur. Selling the water eliminates those risks, he said.

Amaro said he grows about 350 acres east of Willows, so his participation would be small, maybe 20 acres or so.

He said he'll laser level that ground and also allow weeds to sprout so he can eliminate them. This will lessen weed damage when he plants again. He said it would be best to flood the field once, to allow all the water weeds to sprout, but that's not allowed under the contract.

Amaro leases 2/3 of the land that he farms. If he fallowed the leased land he'd need to negotiate with the property owner. He said he'll just stick to fallowing on his own land.

The farmer said he did not fallow land when Glenn-Colusa worked out a deal two years ago because that deal came later in the year and he had already planted.

"Seventy five years ago you didn't farm ground every year," Amaro said. "Now economically we almost have to because the ground is so expensive."

Water sales are an opportunity for farmers to improve the land and get better returns later, he said.

Amaro said he was concerned about how fallowing would affect his eligibility under future farm bills.

"It's a big guessing game, a big gamble."

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