December 15, 2004
California Water Subsidies: Recommendations
- All CVP water districts should be required to maintain and disclose their records of water use at the individual farm level. This transparency should not be limited to the CVP: All other federal water projects should monitor and disclose who uses how much of this water. The public has a right to know.
- Contracts with CVP irrigation water users should be based on prices closer to market rate. The Bureau of Reclamation's "full cost" rate should be considered the absolute baseline.
- Price incentives should be based on measures of environmental responsibility. The current "tiered pricing" system calls for higher rates to be paid for water above 80 percent of the recipient's allotment. These higher rates are supposed to provide $50 million a year to a habitat restoration account. Since CVP water is over-allocated, most recipients don't get more than 80 percent of their allotment, so the account is underfunded. To correct this, tiered pricing should be applied to the water each recipient actually gets.
- Farmers should not be allowed to resell the public its own water at a higher price. If farmers get more water than they need, it should be returned to the Environmental Water Account at the same price the farmer paid. In return for water saved and returned to the EWA, farmers should receive a reasonable discount on the water they buy the following year.
- Farmers should be required to comply with all state and federal water quality regulations, just as other California industries are.
- Contracts should not include provisions for essentially automatic renewal after 25 years. Such long-term provisions do not give the state sufficient flexibility to address changing water needs.