8 www.CaliforniaFarmer.

com - July 2009

California Provocateur

Delta water manipulated for profit
HERE is an escalating financial meltdown in California, and it shadows a swelling moral meltdown. It turns out that manipulation of Delta water supplies since 2000 rival that of Enron Corp. and the recent financial mess, according to a startling news series, “Pumping water and cash from the Delta,” prepared by Mike Taugher, probably the state’s premier water reporter and MediaNews Group investigator. Indeed, if true — and we’ve seen nothing to convince us otherwise — blame has been misplaced; environmental regulations, Delta pumps, sea lions, Delta smelt, Los Angeles, a peripheral canal, dams, etc. are nothing compared to profiteering by water agencies and wealthy farming interests in Kern County. Harm includes the Delta, the near shutdown of the Westlands farming district, loss of fish including salmon and additional unemployment. This puts Delta water manipulators high on our list of most ethically challenged. (The list also includes Enron and former Merrill Lynch & Co. CEO John Thain, who spent $1.22 million in 2008 to redecorate his office while the company was hemorrhaging losses of $27 billion.) Delta water trade manipulators won to the tune of at least $200 million and have cost others and the environ-


EDITOR lrichardson@ farmprogress.com

ment much more. Worse, manipulation erodes public confidence in water leadership needed for a Delta compromise. And trade manipulation casts a dark shadow over needed water marketing.

What MediaNews Group found
Here are the findings from MediaNews Group: ■ The CalFed Environmental Water Account, set up in 2000 to improve the Delta, spent $200 million to fix the system. Financed by a taxpayers’ water bond, the money was spent in Kern County. Their water was purchased from the state and then traded back to the account at a higher price. Most went

to Paramount Farms in Kern County. Those companies sold $30.6 million of water to the state and received an additional $3.8 million in checks and credits for sales through public water agencies. Stewart Resnick’s Paramount Farms owns Westside Mutual Water Co. and recorded the most sales. ■ Revenues from sales also may have helped finance lawsuits against the Department of Water Resources. Most of the water sold through the Kern County Water Agency originated with a dozen smaller public water district “member units” and a handful of private interest groups that previously stored water. Several of those entities are members of the Coalition for a Sustainable Delta, which fights pumping restrictions. They have filed several lawsuits, some reported in this magazine. Their phone number is the same as Paramount Farms, and four coalition officers are Paramount officers or executives. The CalFed idea was supported by this magazine because when water supplies were plentiful, they would be purchased by users under the Environmental Water Account and pumped to underground storage in Kern County. When Delta pumps were slowed, the EWA would buy water back from the aquifer to assure needed supplies. Apparently what really happened is

the state was pumping so much water that Kern County water agencies sent water to the San Luis Reservoir rather than putting it underground and had so much water they could sell it back to the state for $200 per acre-foot; it was originally bought for only $86.

What’s needed?
The Delta has never had anyone in charge or accountable. Most of the Delta solutions ignore governance. It now seems clear that too many cooks spoil the environment and serve no one. And like governance, water rights are ignored. The Delta flow is 29 million acre-feet per year, but landowners have water rights to 245 million acre-feet. Finally, this flow vs. water rights demand dictates the need for more storage — not just large dams in the north but less expensive, smaller ones down south. Delta ethical conduct must go beyond self interest and water need to include: Moral awareness: recognition that a situation raises ethical issues Moral decision-making: determining what course of action is ethically sound Moral intent: identifying which values should take priority in the decision Moral action: following through on ethical decisions — actions must start with transparency

Flower thanks required by our state constitution, all
Long time, no talk. I hope this e-mail finds you well. I have been meaning (for a long time now) to shoot you an e-mail thanking you for the beautiful piece on the California Cut Flower Commission and the results of its recent economic-impact study. California flower growers were thrilled with the piece! And in an effort to keep you up to speed on all things CCFC, I thought you may be interested to learn about some new leadership changes at the commission. On May 13, the CCFC appointed a new chairman, Hans Brand, owner of B&H Flowers in Carpinteria. Kindly, Julie Ficker, on behalf of the CCFC, Sacramento pay to all legislators and their staffs be stopped for lack of job performance. ■ If at the end of a month a budget is not produced, execute a mandate that 10% of both of each political party comprising the Senate and Assembly members, by seniority, be ousted from office to be replaced in the next general election (not a special one). Maybe this would provide some incentive to create political courage, the desire to compromise when needed, and the desire to serve the citizens of California who elected them to act responsibly. Tim Wallace, Berkeley Editor’s note: Five of the six propositions on the May 19 special election ballot lost, as most predicted, including most polls. Of the six measures placed on the ballot as part of the budget agreement between Gov. Arnold Schwarzenegger and legislative leaders, only Proposition 1F had voter support. This measure prevents pay increases for the state’s elected officials in deficit years. Also, do you happen to know what nut crops are the most profitable? ... and have the highest future profits? Thank you so very much. I greatly appreciate all of your valuable time and assistance. David Dudley, Sacramento Editor’s note: It is difficult to answer your question about profit margins because we have 350 different enterprises in California, and of course, what is profitable one year and/or season is not necessarily true the next. Overall, almonds have probably been the most profitable in recent years, but that isn’t true this year, especially in the water-short Westlands district of the Central Valley. In addition, almonds and other nut crops are expensive to establish and take several years to come into production. The best option is to look at cost of production studies and arrive at your own conclusions. All cost of production studies are available online at cost studies.ucdavis.edu. For additional help, call or e-mail the following: Rich De Moura, 530-752-3589, rdemoura@ucdavis.edu Pete Livingston, 530-752-2414, pete@ primal.ucdavis.edu the word out. Hedgerow Farms contacted me and was wondering if they could get additional copies of the magazine. Please let me know their options for acquiring additional copies. I am copying them on this e-mail. Lisa Kresge, California Institute of Rural Studies, Davis Editor’s note: Copies were sent.

Great editorial
I was so happy to see your May editorial, “Consider all the consequences” (Page 15)! Thanks for putting light on this critical issue. Jo Ann Baumgartner, Wild Farm Alliance, Watsonville

We want to hear from you!
E-mail your letters to lrichardson@ farmprogress.com.

Budget incentive
Agriculture is losing out in many ways in the face of rising California debt, little political agreement, no visible political leadership, and unpalatable propositions which will meet a record low of voters on May 19. I suggest one or both of the following: ■ If a new state budget is not produced within one week of the time

Write to:
Letter to the Editor California Farmer 125 Ryan Industrial Court, Suite 107 San Ramon, CA 94583 All letters must include your name, address and telephone number for verification purposes and should not exceed 300 words.

What crops are profitable?
Would you please be so kind as to inform me as to what California valley crops offer the highest profit margin? ... and/or are the most promising in having the highest future profit margin?

Article looks great
I just received the May edition of California Farmer. The article (Page 10) looks great! Thank you very much for your interest in the report on water stewardship and support in getting