Farmers are businesspeople first and friends second. When it comes to relationships in the farming business, the farmer looks after his own interests, just like a businessperson in any other business.
Water is an indispensable part of the business of farming. No farmer is going to sell his entire water allocation to others unless he does not intend to farm. As a businessperson, the farmer is not likely to sell water to a friend below market value. In a supply shortage, markets are usually greatly distorted by high prices.
MID Drought Water Policy Favors Large Farms
The Modesto Irrigation District (MID) recently approved a new rate structure for the drought that favors large farms and diminishes the possibility of small farms surviving.
The policy reduces water allocation per acre to a level less than what is needed to grow most food crops. It also allows farmers to sell all or part of their water allocation to other farmers within MID service boundaries in Stanislaus County.
Large farms will be able to use their entire water allocation to farm part of the land holdings and be paid by the federal government for leaving the remaining land fallow. If the decision is made not to farm, farmers with large land holdings will have much more water to sell at a huge profit than small farmers.
Small farmers will have to either leave their land fallow, drill wells (if they can get a permit from the County), or buy expensive water under MID’s new allocation rules. Small farms will be at a permanent competitive disadvantage to large farms because only small farms will have to buy high priced water to stay in business.
When a farmer leaves all of his land fallow, he is out of business.
Farmers to Become Water Brokers
In reducing water allocation below subsistence levels for crop farming, MID established a policy where farmers can resell their water allocations at a profit to other farmers at whatever the market will bear. The new resale policy will create a class of water brokers who may earn livings reselling water allocations rather than by farming.
Land Speculators Benefit–Wood Colony May Be Harmed
This policy will be a boon to land speculators who want to buy into the small farms in Wood Colony. If Wood Colony businesspersons cannot farm profitably because they cannot get enough water at a reasonable price, they may choose to sell their land to speculators.
Speculators may choose to buy land for the water rights, let the land go fallow since they don’t want to farm anyway, make money brokering their water allocation, and then work to get their land annexed into a nearby city.
No Fair Solution to the Drought Problem
In a water shortage, devising a fair solution that equally impacts all farmers is probably an impossible task. However, the ultimate goal of the Modesto Irrigation District should be to keep everyone in business, not just a favored group of large farmers.