News Coverage
Study: Calif. farms get millions in fed water and crop subsidies
Published August 2, 2005
SAN FRANCISCO -Some of California's largest farms receive millions of
dollars in federal subsidies by "double dipping" - using
government-subsidized water to grow subsidized crops such as rice and
cotton, according to a watchdog group's analysis.
The study released Tuesday by Environmental Working Group found that the
6,800 farms in the Central Valley Project, the nation's largest federal
water supply project, received $538 million in combined water and crop
subsidies in 2002, the last year in which both figures are available.
The analysis found that nearly one fifth - or 1,228 - of Central Valley
farms "double-dipped" in 2002, receiving water subsidies worth $122 million
and crop subsidy checks for another $122 million. Some dairy farmers "triple
dipped" - using subsidized water to grow subsidized corn to feed cows that
produce subsidized milk or cheese.
"What was intended to be a support program for small family farmers has
turned out to be a corporate welfare program for big agribusiness
operations," said Bill Walker, vice president for EWG's West Coast office,
which conducted the analysis. "When you add all of the other federal water
projects around the West, it's clear that the Central Valley Project can
only be the tip of the iceberg."
But the state's farming interests disputed the study's findings. They took
issue with how the study calculated the value of federal water subsidies,
and said the only break farmers get is that they don't have to pay interest
on the $3.6 billion in public money used to build the Central Valley Project
in 1936.
"The notion that people are getting rich off subsidized water on the backs
of the American taxpayer is just a completely overblown exaggeration," said
Mike Wade, executive director of the California Farm Water Coalition.
Tupper Hull, a spokesman for the San Luis and Delta-Mendota Water Authority,
which oversees 2.1 million acres of irrigated farmland in the San Joaquin
Valley, called the study a "completely ridiculous analysis" and said the
federal government's investment in the Central Valley Project has generated
jobs, economic growth and food for the country.
"There have been enormous benefits to California and the nation by virtue of
lands that have been brought into agricultural production," Hull said.
An EWG study released in December found that the Central Valley Project
generated up to $416 million in subsidized water to California agribusiness,
with the top 10 percent getting two-thirds of the water in 2002. The value
of the water subsidies was based on a 2003 state and federal study that
estimated the market price of San Joaquin River water, Walker said.
The latest study matched the farm names from the water subsidy analysis with
the U.S. Agriculture Department's database of crop subsidy recipients.
The study found that more than 1,800 farms received water subsidies in 2002
and crop subsidies for at least one year between 1995 and 2004. And the
distribution was uneven - the top 5 percent received more than one-third of
the crop subsidies. The top 10 "double dippers" received between $1.5
million and $2.7 million in combined subsidies, while the average subsidy
was about $200,000 per farm.
The EWG study comes as federal lawmakers prepare to debate the next farm
bill that will determine future farm subsidies, and the U.S. Bureau of
Reclamation drafts new water contracts for Central Valley irrigation
districts.
"These contracts make it impossible for California to plan sanely and fairly
for the water needs of the rest of the state," Walker said.
In recent years, various government agencies, politicians and watchdog
groups have criticized federal farm subsidies, but critics believe that
international pressure could force change. Earlier this year, the World
Trade Organization ruled that the U.S. cotton subsidies were unfair to
Brazilian farmers, and Uruguay farmers are considering a similar challenge
to American rice subsidies.
Rep. George Miller, D-Martinez, an outspoken critic of farm subsidies, said
Congress should put a stop to "these unjustifiable giveaways of the public's
precious water and hard-earned money."
"It doesn't make any economic sense," Miller said, "and it encourages waste
when the rest of us are conserving water."
