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A $400 Million Xmas Present From U.S. Taxpayers

For Immediate Release: 
Wednesday, December 15, 2004

OAKLAND, CA — Every year, U.S. taxpayers give California farmers a $400 million Christmas present.

At a time when California water is scarce and expensive, a federal progam left over from the Depression guarantees Central Valley farms an abundant and cheap supply, subsidized by taxpayers at a rate of up to $416 million a year, according to a 16-month investigation by the Environmental Working Group. EWG calculated, for the first time, federal water subsidies to each of more than 6,800 farms in the Central Valley Project (CVP), the largest of more than 100 federal water projects in the West.

The study is released as the Interior Department is negotiating new long-term contracts with Central Valley water districts that could lock up millions of acre-feet of water for 50 years. The full report and a searchable database of subsidy recipients are at www.ewg.org.

EWG found that in 2002, the average price for irrigation water from the Central Valley Project was less than 2 percent what Los Angeles residents pay for drinking water, one-tenth the estimated cost of replacement water supplies, and about one-eighth what the public pays to buy its own water back from farmers to restore the San Francisco Bay and Delta.

The study is the first to name individual recipients of federal water subsidies in California — information previously hidden from the public by state law. It confirms that large agribusiness operations, not the small family farmers whom federal water projects were intended to benefit, are reaping a windfall from taxpayer-subsidized cheap water.

Water subsidies in the Central Valley are overwhelmingly controlled by the largest farms. In 2002, the largest 10 percent of the farms got 67 percent of the water, for an average subsidy worth up to $349,000 each at market rates for replacement water. Twenty-seven large farms received subsidies each worth $1 million or more at market rates, compared to a median subsidy for all recipients of about $7,000.

One farm, Woolf Enterprises of Fresno County, received subsidized water worth more than $4 million, according to EWG's estimates. Woolf Enterprises used half again as much water as any other farm in the CVP — enough water to fill more than 37,000 Olympic-sized swimming pools. Woolf, like most of the top subsidy recipients, is part of the giant and powerful Westlands Water District, which gets more than one-fourth of all water in the CVP, for a subsidy worth up to $110 million.

"It's one thing to ask taxpayers to subsidize farming with cheap water. It's another thing when those subsidies top $400 million a year, and still another when the overwhelming majority of the subsidies are going to the largest and wealthiest farms,'" said EWG Analyst Renee Sharp, principal author of the report. "It's time for an honest and fully informed debate about how the water needs of all Californians will be met in the 21st Century."

 

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