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Frequently Asked Questions

California Water Subsidies: Frequently Asked Questions

December 15, 2004

About the Database

About Water Subsidies

 

Frequently Asked Questions

About the Database

How did you do these calculations?

See "Methodology" section.

Why are you posting this information?

The public has a right to know where its water is going, and whether recipients are paying their fair share in a time of increasing cost and scarcity. What's more, the public, elected officials and regulatory agencies need this information now in order to make informed decisions about the future use of California's most valuable natural resource. The U.S. Bureau of Reclamation is in the midst of negotiating new contracts with virtually all of the CVP's irrigation water users. These contracts will affect the fate of millions of acre-feet of California's water for the next 25 to 50 years.

Why do you have minimum and maximum subsidy figures for some farms but not others? Why is there such a big range in some cases?

A few farms contract directly with the Bureau of Reclamation for their water so we know exactly how much water (and subsidies) they are getting. For the rest, we are forced to estimate. Although we calculated minimum and maximum subsidy estimates for all farms, when these estimates differed by less than 10 percent, we cited only the lower value in our database. (For more information about how we calculated these estimates, see "Methodology" section.)

Farms that harvested more than 960 acres in 2002 are likely to have a wide subsidy range in our database for the following reason: Under the Reclamation Reform Act, farmers are allowed to get cheap federal water to irrigate only 960 acres worth of cropland. Although they are still allowed to purchase federal water to irrigate land in excess of 960 acres, farmers are supposed to pay "full cost" prices for this water. In reality, however, many farmers have been able to skirt these acreage limitations (as documented by the Government Accounting Office, among others) and get subsidized water for cropland far in excess of 960 acres. To address this issue, EWG calculated minimum and maximum subsidy figures for those farms that harvested more than 960 acres of crops in 2002. For our minimum subsidy calculations, we assumed that the first 960 acres of crops irrigated was paid at the average water rate and the rest of the water was paid at the Bureau's "full cost" rate — as it is supposed to be but often isn't. For our maximum subsidy calculations, we assumed that all of the water the farm used that year was paid at the Bureau's contract rate. For those farms with harvested acreage far in excess of 960 acres, the subsidy range for the "full-cost" rate will often be high because there is such a difference between contract and "full-cost" water rates.

Why is my farm listed here when I don't get any CVP water?

Because farm-level water use records are off-limit to public review, EWG was forced to rely on California's 2002 pesticide use database to identify the farms residing in each CVP water district and estimate total CVP water use. If a farm residing within the boundaries of a given water district doesn't actually get any CVP water from that district, this farm will appear in EWG's water subsidy database erroneously. We will promptly correct any errors brought to our attention.

Why isn't my farm listed here when I know I get CVP water?

Because farm-level water use records are off-limit to public review, EWG was forced to rely on California's 2002 pesticide use database to identify the farms residing in each CVP water district and estimate total CVP water use. If a farm did not use any pesticides in 2002 (or did not register their use with the state as required), this farm will not appear in EWG's water subsidy database. We also excluded 7 water districts from our analysis due to data deficiencies, because they did not receive any CVP water in 2002, or other related issues: Colusa Drain Municipal Water Company, the County of Sacramento, Lewis Creek Water District, Placer County Water Agency, Rag Gulch Water District, Santa Clara Valley Water District, Widren Water District.

Why is my farm listed as getting CVP water from two different water districts when I only get water from one?

Because farm-level water use records are off-limit to public review, EWG was forced to rely on California's 2002 pesticide use database to identify the farms residing in each CVP water district and estimate total CVP water use. To do this, EWG overlaid farm boundaries as delineated in the pesticide use database with water district boundaries. If two-thirds of a farm fell in "Water District A" and the other third fell in "Water District B", EWG assumed that the crops planted in "Water District A" were being irrigated with water from this district while the rest of the crops were being irrigated with water from "Water District B." This may not be true in all cases. Again, we will correct any errors if notified.

The amount of CVP water my farm is listed as getting is wrong. Why?

Because farm-level water use records are off-limit to public review, EWG was forced to rely on California's 2002 pesticide use database to identify the farms residing in each CVP water district and estimate total CVP water use. To do this, EWG made a number of assumptions that may not be true for all farms in all districts. For example, EWG was forced to assume that within a given district, every farm uses the same ratio of CVP to non-CVP water for irrigation; this may not be the case in practice. EWG also had to rely on the Bureau of Reclamation's annual published ratebooks for data on how much CVP water was delivered to each district. Unfortunately, the agency lumps together its corrections and adjustments from previous years with its water use and payment data for the current year. As a result, the information in the Bureau's annual reports may not be a perfect reflection of the actual amount of water used or money paid in some cases.

Why are there a few water districts where no farm-level subsidy information is provided?

EWG excluded a small number of water districts from farm-level subsidy analyses because of data limitations. EWG also excluded a small number of water districts from district-level analyses because a few districts received no CVP water in 2002 and a few had unresolvable data discrepancies.

Why does the database have crop details for some farms but not others?

The database does not include crop details for those farmers who contract with the Bureau of Reclamation directly.

Why does the database have contact names for some farms but not others?

The database includes contact names when that information was included in the state's pesticide use report database.


About Water Subsidies

Why did you only look at the CVP? What about other federal water projects? Don't they get subsidies too?

CVP farmers are not the only ones receiving water subsidies. All irrigation water supplied by the US Bureau of Reclamation is subsidized because farmers are not required to pay interest on construction costs, and the CVP is an example of the much larger issue of subsidized irrigation water. EWG focused on the CVP for several reasons. First, although the Bureau of Reclamation operates more than 130 water projects in 17 western states, the CVP is arguably the most important. Not only is it the largest federal water project in the nation, but 43 percent of Reclamation project land lies in California. Second, CVP farmers have done a particularly poor job at repaying their share of project construction costs. Third, data availability issues would make it difficult to perform similar calculations on any federal water project outside California. Fourth, the Bureau of Reclamation is in the midst of negotiating new contracts with virtually all of the CVP's irrigation water users, which will affect the fate of millions of acre-feet of California's water for the next 25 to 50 years.

Do other (non-farm) users of CVP water get subsidies too?

Yes, but they are far smaller than what irrigators get. For example, in a 1996 report, the General Accounting Office wrote:

"The federal government has spent $21.8 billion to construct 133 water projects in the western United States that provide water for various purposes, including irrigation. The beneficiaries of these projects are generally required to repay to the federal government their allocated share of the costs of constructing these projects. However, as a result of various forms of financial assistance provided by the federal government, some beneficiaries repay considerably less than their full share of these costs. Among the beneficiaries, irrigators generally receive the largest amount of such financial assistance."

While irrigators are not obligated to pay interest on federal water project construction costs, urban and industrial water users are. Yet the interest rates provided to these users are typically lower than market rate, which confers a relatively small subsidy to urban and industrial users. Farmers, however, get a wide range of additional assistance that adds up to huge subsidies. Overall, the GAO found that out of every dollar in construction costs allocated to irrigation, irrigators will only repay 47 cents — and that doesn't even include the already massive interest subsidy that farmers get.

How does the price of CVP irrigation water compare to the price that urban users pay?

Farmers in the CVP pay about $17 per acre-foot of water, on average. Urban water users in San Francisco and Los Angeles, pay about $650 and $925 per acre-foot of water, respectively.

Don't these large water subsidies ensure American consumers access to cheap food?

According to USDA, the grain components of a loaf of bread or box of cereal are only 5 to 7 cents of the full price of these products. Consumers mostly pay for the labor, processing, packaging and transportation for the final food products they buy. Addressing the issue of crop subsidies, one of the most respected agricultural economists in the nation, Dr. Michael Duffy from Iowa State University, recently stated: "The claim that these subsidies are necessary to feed our country and our troops during wartime or anytime, is preposterous." For instance, in 2001, the U.S. exported 53 percent of its wheat crop, 42 percent of its rice crop, 35 percent of its soybean crop, 46 percent of its sorghum crop, and 45 percent of its cotton crop.

Do these large water subsidies help farmers?

According to the California Department of Water Resources, water contributes only a small amount to the total production costs for all but the most water intensive crops. In the Tulare Lake region of California, water costs constitute between 5 and 6 percent, on average, of total production costs for wine grapes, processing tomatoes, almonds and pistachios. This percentage was slightly higher for dry beans, wheat, cotton and sugar beets where water costs contributed between 11 and 14 percent. For the highly water intensive alfalfa hay and irrigated pasture, the percentages were 19 and 36 percent, respectively.

Cheap water encourages the planting of highly water intensive crops and discourages water conservation. It has also allowed the continued farming of land not suitable to irrigation because of drainage problems, the creation of an uneven playing field for farmers not receiving subsidized water, and arguably the concentration of land-holdings in the Central Valley. A 1986 study by the California Institute for Rural Studies found that California farms receiving federally subsidized water are 7.2 times larger on average than farms not receiving subsidized water.