Posts Tagged: Richard Howitt
One reason: California water is not liquid, financially speaking, said a UC Agriculture and Natural Resources expert. California's mechanism for trading water is slow, clunky, and opaque.
“If you wanted to do a trade now, you'd have to meet a broker in a coffee shop somewhere. There's no Wall Street Journal, no Bloomberg, no Carfax,” said Richard Howitt, a professor in the Department of Agriculture and Resource Economics at UC Davis.
California has a system for regulating surface water. A law regulating groundwater passed last year, but it will be enacted in stages and doesn't fully phase in until 2040, the Bloomberg story said. A fully liquid water system would send more water to urban areas and continue the shift in agriculture to more high-value crops, such as grapes, tree nuts and fruit and tomatoes.
The article suggests that Californians can learn from Australia, where water rights are traded on an exchange like stocks, prices are posted for all to see, and transactions can be concluded in a day. Allocations are based mainly on a share of what's actually available, not unrealistic fixed amounts.
“America is the home of free enterprise,” said University of Adelaide professor Mike Young. “The fact that there's not a water market in America means the institutional arrangements are all wrong.”
About 4 percent of the California agricultural economy - $1.8 billion - will be lost in 2015 due to the California drought, and combined with ripple effects in affiliated industries, will produce a $2.7 billion economic hit, reported the San Jose Mercury-News.
The downturn will be felt most sharply in the San Joaquin Valley, where five of the state's top six agricultural counties are situated.
"Tulare is taking the hardest hit," said the report's lead author Richard Howitt, a UC Davis professor emeritus of agricultural and resource economics.
Pumping groundwater has hepled keep some acreage in production. This study did not address the long-term costs of groundwater overdraft, such as higher pumping costs and greater water scarcity.
"The socioeconomic impacts of an extended ground (water use), in 2016 and beyond, could be much more severe," said Jay Lund of UC Davis, who lead the analysis.
Mother Jones magazine reporter Tom Philpott toured Central California to gather information for a lengthy profile of the California almond industry, he sought out UC expertise to round out the story.
UC Cooperative Extension advisors Gurreet Brar in Fresno County and David Doll in Merced County were among the sources. The reporter also spoke to Richard Howitt, an agricultural economist in the Department of Agricultural and Resource Economics at UC Davis.
Much of the article focused upon the industry's growth in recent years, especially in the face of the California drought. Farmers in the Central Valley once grew mostly wheat and cattle. But over time, they have gravitated toward more-lucrative crops.
"It's a normal, natural process driven by market demand," Howitt says. "We grow the stuff that people buy more of when they have more money."
But the shift impacts water use flexibility, the article said.
While farmers can forgo annual crops like tomatoes and melons during droughts, failing to irrigate trees means losing the entire orchard. That leaves many nut and fruit farmers with only one option: groundwater.
Brar told the reporter that the amount of water it takes to produce a pound of almonds has fallen by a third since 1990. But increases in the number of irrigated orchards has off-set those gains.
Doll, author of The Almond Doctor blog, said he believes the "nut boom" is still going strong.
No other region has California's combination of land, climate, infrastructure and research support. "India and China have tried, and failed," Doll said.
The total statewide economic cost of the 2014 drought is $2.2 billion, reported UC Davis economists. “What would it have cost if we didn't have access to groundwater?” asked lead author Richard Howitt this week at the Agribusiness Management Conference in Fresno. Howitt is a faculty member affiliated with the Agricultural Experiment Station, which is part of the UC Division of Agriculture and Natural Resources.
Howitt is professor and chair of the Department of Agricultural and Resource Economics at UC Davis.
He said groundwater is California farmers' insurance policy and urged the agriculture industry to take control of its management, reported Robert Rodriguez in the Fresno Bee. Howitt suggested farmers look at what Orange County does to manage its groundwater: Users pay for what they pump and if they use more than an allotted amount, they have to pay to replenish it.
The Orange County system is simple and equitable and can ensure continued, but measured, growth of permanent crops, Rodriguez reported.
California has emerged as the world's almond orchard because of near-perfect conditions for the crop, but in terms of production, it may have hit its peak, reported Jennifer Rankin in The Guardian.
"The future for farming almonds in California will always be there," said David Doll, UC Cooperative Extension farm advisor in Merced County. "It is more about coming into balance with our water resources."
The story quoted from a UC report that California farmers have spent an extra $500 million this year pumping extra water to cope with the drought.
Co-author of the study, Richard Howitt, professor in the Department of Agricultural and Resource Economics at UC Davis, cautioned against singling out particular crops.
"Don't blame almonds for the problem," he said. "The problem is one of water mismanagement."
He suggested changes in how California manages water so farmers monitor their groundwater use and replenish supplies when there is more rain.
"[The farmers] should be repaying what they are taking. And if they are taking more, as they always are in droughts, then they should be making plans to repay it back in wet years. If you treat your groundwater the way you treat your retirement account, then everything would be OK."
More information about water stress in almonds may be found in David Doll's blog, The Almond Doctor.