Taking from the Taxpayers

How the Bush Administration Gave Subsidy-Rich California Farmers a $17 Million Christmas Bonus

For decades taxpayers have provided subsidized water to California farmers at rates far below fair market value. When the amount of cheap water delivered to farmers was reduced during the severe drought of the early '90s to protect two species of endangered fish, a group of San Joaquin Valley water districts representing some of the nation's biggest farming operations sued the government for "taking" what they claimed was their private property.

But an Environmental Working Group (EWG) investigation of state and federal data found that from 1995 to 2003, those same farms received a total of $248 million in federal farm subsidies. And since 2001, the water district representing nearly all of those farms made almost $40 million in profit by selling subsidized water back to the taxpayers at market rates.

Which of the following was the Bush Administration's response to the lawsuit?

(a) The farmers didn't own the water in the first place — it belongs to the public.

(b) Why do rich farmers who already get big taxpayer subsidies deserve even more?

(c) OK, here's another $17 million.

On Dec. 21, 2004, the Administration announced it would settle the lawsuit by paying the water districts $16.7 million for "taking" the water. It was not only a tidy Christmas bonus for a group of farmers that includes the world's biggest cotton grower and a Beverly Hills mail-order tycoon who owns the largest farm operation in the country. The decision, over the objections of California officials from both parties and the Administration's own fisheries management agency, also represented a radical extension of the right-wing "Wise Use" ideology that regards environmental protections as unconstitutional infringements on property rights.

The Tulare Lake case, as it is known, marks the first time that restrictions imposed under the federal Endangered Species Act have been interpreted as a government taking of private property without "just compensation," which is prohibited by the Fifth Amendment. It opens the floodgates for lawsuits involving much larger claims: A similar case seeking $100 million in compensation for farmers in Northern California and Oregon will be heard in federal court Feb. 14, 2005. It also threatens California's ability to balance fairly the competing needs of agriculture, cities and the environment for increasingly scarce and expensive water.

Applying the takings doctrine to the Tulare Lake case requires the suspension of reality, because the water districts sued for the loss of "property" that exists only on paper — cut-rate contracts to buy an unspecified amount of water that fluctuates from year to year, depending on how much is available. The case exposes the political hypocrisy of farmers who rail against environmental protections but are happy to accept government subsidies and government-approved water trading schemes allowing them to profit from selling a public resource they don't own. Finally, it is more evidence that crop and water subsidies, intended to help small family farmers, have become inequitable corporate welfare programs for big agribusinesses.

Under state law, water districts don't have to make public the names of farms they serve. EWG used mapping software and state pesticide use data to identify farms in the districts that sued, and matched the names against our Farm Subsidies Database, which lists recipients of federal crop subsidies from 1995 to 2003. We also accessed publicly available state data on the profits the water districts made from 2001 to 2004, under trading schemes that allow them to sell water they don't use back to the state for fish and wildlife restoration.

The farmers' take from the taxpayers dwarfs the Tulare Lake settlement. Of the farms sharing in the settlement, the top 20 alone took in $121 million in crop subsidies from 1995 to 2003. One company, cotton giant J. G. Boswell Co., got $24 million in federal farm subsidies. The sheer size of these farmers' reliance on subsidies raises loudly the question of who is really doing the taking — the government, which cut water deliveries to protect public resources, or the farmers, who believe they're entitled to crop payments and cheap water?

Boswell, the world's largest cotton producer with about 150,000 acres in the Tulare Lake Basin Water District and 18,000 acres in three other districts, is an extreme example that shows how far the federal farm subsidy system goes to benefit growers of a few favored commodities. Not only did Boswell receive $17.3 million in crop subsidies from 1995 to 2003, but another $6.6 million under a subsidy called Step 2.

Step 2 gives money to companies that, like Boswell, process cotton for export, to help them buy U.S.-grown cotton. This incentive is necessary because American cotton is much more expensive than cotton grown elsewhere around the world. Why? Because of the crop subsidies provided to American cotton farmers, which artificially push the price of U.S. cotton above world market levels.

Boswell's home town of Corcoran, Kings County, is the state's epicenter of rich farms that get huge farm subsidies. Of the 20 Tulare Lake settlement recipients who got the most in crop subsidies, eight are in Corcoran or neighboring Stratford. Collectively they received more than $62.8 million in federal farm subsidies from 1995 to 2003.

TABLE: Top 20 Subsidy Recipients

Farm/Farmer Name City/State Total Farm
Subsidies Received
(1995-2003)
1: J G Boswell Company Corcoran, CA $23,919,679
2: Dublin Farms Corcoran, CA $11,913,936
3: Hansen Ranches Corcoran, CA $8,616,787
4: C.J. Ritchie Farms Visalia, CA $8,225,657
5: Buttonwillow Land & Cattle Company Buttonwillow, CA $8,135,045
6: Starrh & Starrh Cotton Growers Shafter, CA $7,991,530
7: Westfarmers Visalia, CA $6,670,547
8: Gilkey 5 Corcoran, CA $5,588,236
9: Chicca Twin Buttonwillow, CA $4,897,759
10: Wheeler Farms Bakersfield, CA $3,972,321
11: Torigiani Farms Buttonwillow, CA $3,501,218
12: The Phoenix Farming Company Corcoran, CA $3,441,472
13: Four B'S Farms Corcoran, CA $3,432,123
14: Gilkey Enterprises Corcoran, CA $3,121,774
15: Harry Banducci & Sons Bakersfield, CA $3,107,042
16: Houchin Brothers Buttonwillow, CA $3,074,525
17: Fred Palla Farms Buttonwillow, CA $2,928,370
18: Newton Farms Stratford, CA $2,789,606
19: Cauzza Brothers Buttonwillow, CA $2,735,111
20: Toretta Farms Buttonwillow, CA $2,722,339
Total subsidies for top 20 recipients $120,785,076

Source: [34]

The big Corcoran cotton farms are in the Tulare Lake Basin Water District, which resold no excess water for profit from 2001 to 2004. That prize went to the other main plaintiff in the case, the Kern County Water Agency (KCWA), which serves a consortium of 14 smaller water districts around Bakersfield. Of the 20 settlement recipients receiving the most crop subsidies, the dozen served by the Agency received a total of more than $57.9 million from 1995 to 2003. State records show that in those years KCWA also made $36.8 million in profit from reselling subsidized water back to the state for efforts to restore fish and wildlife habitat in the San Francisco Bay-Delta.

Kern County Water Agency has made $38.6 million selling water to the Environmental Water Account

Year Acre-feet sold Profit from sales
2001 20,000 $6,317,200
2002 97,400 $12,399,494
2003 125,000 $14,482,500
2004 35,000 $5,418,700
Total: 277,400 $38,617,894

Source: [38]

A closer look at the KCWA reveals even more layers of schemes and sweetheart deals that let rich farmers sharing in the settlement feed at the public trough.

The KCWA and three of the water districts it serves own part of a huge underground storage facility called the Kern Water Bank. Most of the remaining interest belongs to the Westside Mutual Water Co. a paper company owned by its only customer, Paramount Farming Co., which with its sibling Paramount Citrus comprises the largest farm operation in the country. Paramount is owned by Stewart Resnick, one of the richest people in Los Angeles and owner of the Franklin Mint.

From 1995 to 2003, Paramount received $576,000 in federal crop subsidies. Paramount has acreage in both the State Water Project and the federal government's much larger Central Valley Project (CVP). EWG's December 2004 investigation of the CVP estimated that in 2002 alone, Paramount received federal water subsidies worth more than $1.5 million at the market rate for new agricultural water supplies.

Paramount created Westside to resell part of its SWP contractual allotment — excess water that exists only on paper — to developers who want to turn farmland into planned communities called Tejon Ranch and Newhall Ranch. A top Tejon Ranch executive is a director of the Kern Water Bank, and Newhall's farm operations are served by one of the water districts that owns the bank. From 1995 to 2003, Tejon and Newhall together got more than $1 million in federal crop subsidies.

The complexity of the corporate connections, subsidy systems and trading schemes make it impossible to say just who is getting how much from the Bush Administration takings settlement. But it is clear that it is far from being just compensation for hard-working farmers whose survival depends on secure water supplies. It is another corporate welfare program for rich agribusinesses who take all they can from the taxpayers and never get enough.

Who Owns The Water

First authorized in 1960, California's State Water Project (SWP) is now the largest state-built agricultural water delivery project in the country, with 660 miles of aqueducts and pipelines carrying water to 23 million residents and 750,000 acres of farmland annually. [1] On average, the Project carries about 2.2 million acre-feet of water each year to 29 long-term contractors, mostly located in Southern California. But as rainfall varies widely from year to year, so do SWP water supplies. Some years the SWP may carry almost twice as much water, while in other years only half as much will flow down the Project's canals. [2]

Municipal water agencies and farmers have long been forced to adjust to these whims of nature. But as California's population continues to grow while its water supplies remain finite, the battles over this increasingly scarce resource have intensified. At the center of this conflict lies the issue of how the state can balance the needs of agriculture, municipalities, and California's fish and wildlife — all of which depend on a steady flow of water for survival. Now, an opinion by the Court of Federal Claims in Washington, D.C., and the acceptance of that opinion by the Bush Administration threatens to take away the state's power to distribute water as it sees fit. Even more ominously, the settlement undermines a basic tenet of California water law: Water is a public good that belongs to the people.

The case, Tulare Lake Basin Water Storage District v. United States, involves a set of powerful water districts in California's San Joaquin Valley that sued the federal government after the State Water Project cut their contracted water deliveries during the severe drought of the early 1990s. [3] The two primary plaintiffs in the case, Tulare Lake Basin Water Storage District and Kern County Water Agency, claim that their water supplies were reduced by a total of 58,820 and 319,420 acre-feet, respectively, during the period 1992 through 1994. (An acre-foot is the amount of water needed to cover one acre to a depth of one foot.) The issue was not simply that the water districts were given less water than promised in their contract — the contracts do not guarantee delivery of any specific amount of water. The issue was why the state Department of Water Resources (DWR), the agency that manages the SWP, made the cutbacks: to protect two endangered fish species.

Under the federal Endangered Species Act (ESA), government agencies must ensure that their actions are "not likely to jeopardize the continued existence" of any endangered or threatened species listed under the Act. [4] Beginning in 1992, the National Marine Fisheries Service and the U.S. Fish and Wildlife Service issued several opinions concluding that the operations of the SWP were threatening the survival of two endangered fish species, Delta smelt and Chinook salmon. [5, 50, 51] The agencies identified a number of major stressors to the fish, including altered water temperature, impaired passage, and decreased spawning and rearing habitat. Since all of these problems stemmed primarily from inadequate stream flows, it was clear that DWR needed to leave more water in the Delta to meet its statutory requirements and protect the endangered fish populations. This meant less water available to irrigate crops.

Several SWP water contractors, representing about 240 farmers in the San Joaquin Valley, cried foul. †1 The farmers claimed that they had a property right to the water, that the federal government had "taken" this property, and they were therefore owed compensation. Their arguments were made under the Fifth Amendment of the U.S. Constitution, which prohibits the government from taking private property without "just compensation". In April 2001, U.S. Court of Federal Claims Judge John P. Wiese ruled in the farmers' favor, marking the first time that a court has said that restrictions imposed under the Endangered Species Act amounted to a Fifth Amendment taking of private property. [6]

The Tulare case involved a challenge to a regulatory action, but the Court broke from federal and state precedent, treating the claim as a physical taking. The Fifth Amendment takings doctrine says that the government must pay for certain limitations or impositions on private property. Takings cases are generally categorized in one of two ways: a physical taking of private property, or a regulatory taking. A physical taking involves a permanent physical occupation or acquisition of real property, and must be compensated in all circumstances. [7] A regulatory taking involves a government action that restricts an owner's use of private property, and is only compensable in certain circumstances. [8] The Tulare court's finding that the Endangered Species Act regulation constituted a physical taking contradicts the Supreme Court's holding that a physical taking does not occur when the government regulates the use of property:

The longstanding distinction between acquisitions of property for the public use, on the one hand, and regulations prohibiting private uses, on the other, makes it inappropriate to treat cases involving physical takings as controlling precedents for the evaluation of a claim that there has been a 'regulatory taking,' and vice versa.[8]

Other federal courts have applied this concept specifically in the context of wildlife regulations. [49] California has followed this precedent, finding that wildlife regulations that curtail use are not constitutional takings: "The federal and state governments may regulate and protect rare species on private lands without, ipso facto, triggering a constitutional taking of private property." [9] Overall, says Georgetown University water law expert John Echeverria, "[t]akings claims based on protecting endangered species have failed with a striking consistency." [48]

The Tulare ruling was troubling for a number of reasons. First, all state and federal water contracts contain language protecting the state and federal governments from liability for "any damage, direct or indirect, arising from shortages in the amount of water to be made available for delivery . . . caused by drought . . . or any other cause beyond its control." [10] Clearly, this includes the need to protect a highly threatened fishery from devastation during a severe drought. This was exactly the reasoning a federal appeals court used in 1995 when it denied a similar claim involving the same two endangered fish species. †2 [11] Judge Wiese decided that although the state was immune from liability because it was party to the contracts, the federal government was not immune because it did not have a contractual relationship.

Another troubling aspect of Judge Wiese's decision was his conclusion that the contracts conferred to the districts "a right to the exclusive use of prescribed quantities of water." The fact is that the SWP and the water districts it serves have signed contracts for more water than is available. Collectively, the existing SWP water supply contracts allocate "entitlements" of more than 4 million acre-feet (maf) of water each year. But almost half of this is "paper water," as a state appeals court said in a 2000 ruling:

The SWP cannot deliver 4.23 maf of water annually. The entitlements represent nothing more than hopes, expectations, water futures or . . . 'paper water.' Actual, reliable water supply from the SWP is more in the vicinity of 2 to 2.5 maf of water annually. . . . Paper water always was an illusion. "Entitlements" is a misnomer, for contractors surely cannot be entitled to water nature refuses to provide . . . Paper water represents the unfulfilled dreams of those who . . . created the expectation that 4.23 maf of water could be delivered by a SWP built to capacity. [12]

The bottom line is that much of the SWP water that districts are "entitled" to by contract is only wishful thinking. Streams and rivers across California would have to go totally dry, and then some, before this much water could be delivered to SWP farmers in all but the wettest of years. Even if all of the contracted water actually existed, the most confounding part of Judge Wiese's ruling is his failure or refusal to realize that under the state Constitution, the water districts and their members could not own it.

Water is a communal resource with an overriding public value. The state claims ownership of all water within its borders on behalf of the people of California. †3 If you own a piece of land you can legally prevent people from entering it. But if the land borders a river, you can't stop people from swimming or traveling down the river. If you have oceanfront property, your property rights stop at the high water line. Below that line, anyone can walk on "your" beach or swim in "your" ocean.

In California, therefore, the water in a river or stream cannot be privately owned. It is held in trust for the common good under the centuries-old "public trust doctrine." In 1983, the California Supreme Court said "the core of the public trust doctrine is the state's authority as sovereign to exercise a continuous supervision and control over the navigable waters of the state and the lands underlying these waters." [13] The Court said the public trust doctrine obligated state agencies and courts to "consider the effect of . . . [water] diversions upon interests protected by the public trust." [14]

"Water rights" do not confer ownership, but the legal right to use a quantity of water. As a California appeals court said in 1986: "Unlike real property rights . . . water rights are limited and uncertain." [15] Under the state Constitution it is illegal to "waste" water, to put it to an "unreasonable use," or employ an "unreasonable method of diversion of water." [16] What is considered reasonable depends on the circumstances. In 1935, the state Supreme Court said:

What is a beneficial use, of course, depends upon the facts and circumstances of each case. What may be a reasonable beneficial use, where water is present in excess of all needs, would not be a reasonable beneficial use in an area of great scarcity and great need. What is a beneficial use at one time may, because of changed conditions, becomes a waste of water at a later time. [17]

When the State Water Project was approved in 1960, the rights to all water it would carry were explicitly given to the Department of Water Resources. [18] Although the Tulare and Kern water districts asserted that they had a property right to the water specified in their contracts, the fact is that they only had a contractual arrangement for the delivery of some amount of this publicly held, public resource. In the Tulare Lake case, Judge Wiese ignored this fact and ruled that any limitations imposed on the districts' use of the resource must be compensated. He awarded the farmers $23 million in compensation. [19]

With that much money at stake plus the dangerous precedent the ruling sets, you'd think the federal government would appeal the decision to a higher court. But in late 2004, word spread that the Bush Administration planned to settle the case. California officials from both parties urged the White House not to make that mistake.

The state Water Resources Control Board, representing Gov. Arnold Schwarzenegger's administration, sent a letter to Bush Administration officials stating that if allowed to stand, the Tulare Lake decision "could fundamentally change the way that water resources are managed in California, to the serious detriment of California taxpayers and resources users." [20] Senator Diane Feinstein sent a letter to Attorney General John Ashcroft and Interior Secretary Gale Norton, stating that the ruling was a "mistake that will establish a precedent that could require the public to pay tens of millions of dollars to water users in many cases where even a small portion of their anticipated deliveries are needed to protect endangered salmon or other fish." [21] California Attorney General Bill Lockyer also urged the government not to settle, and several officials urged Bush to transfer the case to the California Supreme Court. [22]

Earlier, the Bush Administration's own water-law experts at the National Oceanic and Atmospheric Agency (NOAA), which is responsible for protecting endangered salmon runs, also objected. A March 2004 letter from NOAA's general counsel to the Justice Department, obtained by EWG, said Wiese's ruling was already making it more difficult to enforce the Endangered Species Act. The letter said the lawyers for the water districts, who were also handling other water "takings" cases, were already arguing that the Tulare ruling "now require[s] the United States to compensate federal permit applicants up front for any claimed interests in water or land" affected by enforcement of the Act. They said the failure to appeal Wiese's ruling "immeasurably increased" the likelihood that the other lawsuits would succeed. [23]

Nevertheless, five days before Christmas, the Bush Administration settled with the farmers for $16.7 million. Although the Administration said explicitly that the settlement was not meant to set a precedent, if the reasoning behind Judge Wiese's ruling is accepted by future courts, California's ability to protect its streams, rivers and fisheries will be seriously undermined. That is the clear intent of the real driving force behind the lawsuit: the Washington, D.C. law firm of Marzulla and Marzulla, who represented the water districts.

Roger and Nancie Marzulla are husband and wife, long-time "Wise Use" advocates who have made careers fighting environmental protections. Both worked in the Reagan Justice Department: Roger as assistant attorney general in charge of the Environment and Natural Resources Division, Nancie as a special assistant and litigator in the Civil Rights Division. Roger Marzulla was the chief architect of an executive order signed by President Reagan in 1988 that sought to expand the definition of "takings" by federal agencies. [24, 25] Both were also attorneys with the Mountain States Legal Foundation, a far-right wing group founded by beer baron Joseph Coors and the group's first president, James Watt, Reagan's notoriously anti-environmental Interior secretary. Roger Marzulla succeeded Watt as the second president of Mountain States, while Nancie worked as one of the group's attorneys on takings and other cases.

In 1991, the Marzullas founded Defenders of Property Rights, for which Nancie still serves as president and chief counsel, and Roger as board chairman. Defenders promotes takings laws as a strategy to make laws and regulations protecting the environment prohibitively expensive by requiring payments to private landowners whose property is affected by them [26]. Interior Secretary Gale Norton was legal advisor to Defenders of Property Rights until she was picked to join President Bush's cabinet. (Norton also started out at Mountain States, and her career has frequently been intertwined with the Marzullas.)

In 1998, the Marzullas opened their Washington practice, specializing in property rights and takings cases. In 2001, Marzulla & Marzulla filed a $1 billion takings lawsuit — since reduced to $100 million — against the government in the Court of Federal Claims on behalf of farmers and irrigation districts in the Klamath River Basin in Oregon and Northern California. The suit challenges the Bureau of Reclamation's 2001 restrictions on the release of irrigation water from Klamath Lake — referred to as water banking — to maintain lake levels for the protection of endangered sucker fish and threatened Coho salmon. [25, 27, 28]

In November 2003, while representing the Klamath Basin irrigation districts and irrigators at a public meeting, Roger Marzulla compared the Bureau of Reclamation's tactics to those of Adolf Hitler in persuading the Allies to allow him to invade Czechoslovakia. Asked if it was legal for the Bureau to tell farmers they must give up some of their allotted water, or face getting none at all, Marzulla replied: "I think [the] water bank is a desperate effort by [the Bureau] compared [sic] to Hitler. . . . If you take Czechoslovakia, and say if we give you this, will you go along with it?" [29]

The next hearing in the Klamath case before the Federal Claims Court is scheduled for Feb. 14, 2005. [30] In March, a hearing is scheduled in a $500 million takings lawsuit filed by the Marzullas on behalf of the City of Stockton, San Joaquin County and the Stockton East Water District over the federal government's alleged failure to deliver water from New Melones Reservoir. [31] And the Marzullas are preparing another takings lawsuit, seeking millions in compensation for farmers whose water deliveries were reduced to protect steelhead salmon. [32, 33] In these cases, the Marzullas stand to earn millions of dollars in attorneys' fees from their takings suits. For the Tulare Lake case, the couple took about $2 million from the settlement for their efforts.

Footnotes

†1 — Press reports indicated the water districts represented about 240 farmers. From examining the state pesticide use database, it is clear that many of these farmers operate more than one farm. EWG's figure for the total number of farms served by the Tulare Lake Basin Water Storage District and the Kern County Water Agency is 339 farms. We excluded those farms that had less than 50 acres in either water district.

†2 — The federal water service contract in question in the O'Neil case provides that the government shall not be held liable for "any damage, direct or indirect, arising from a shortage on account of errors in operation, drought, or any other causes."

†3 — See Civil Code 1410, which dates back to 1911.

Federal Farm Subsidies

According to EWG's Farm Subsidies Database, which lists all recipients of all Department of Agriculture (USDA) commodity price supports and other farm aid programs, from 1995 to 2003 taxpayers paid out more than $131 billion to U.S. farmers. That's enough to buy outright one-quarter of all the farms in the 302 leading agricultural counties— land, barns, farmhouses and all. Despite the popular myth that these cash payments go to help struggling family farms, EWG's analyses have shown repeatedly that the great majority of the taxpayers' money actually ends up in the pockets of large agribusiness. [34]

Far fewer farms in California receive these subsidies than in other states — in 2002, one-third of all U.S. farms got some sort of USDA payment, while only 9 percent of California farms did. This discrepancy is largely because most California farmers grow the 'wrong' things: Most subsidies are given to only a handful of staple crops, such as corn and soybeans, which are not grown extensively in California. The farmers served by the Tulare Lake Basin Water Storage District and the Kern County Water Agency, however, are another story.

Although water districts by law don't have to make public their records, EWG extracted the names and addresses of the farms in these two districts from state pesticide use data. We then matched them with the names and addresses of farms that got cash payments from the USDA. We found that most of the farmers who sued the federal government over minor restrictions on water deliveries have already been getting a huge windfall in federal crop subsidies. From 1995 to 2003, 57 percent of the 339 farms served by the Tulare Lake and Kern County water agencies got some sort of subsidy check, with the total reaching a staggering $248,196,636.

The average payment to those California farms in that period was more than 29 times higher than the national average: $1,279,364 vs. $43,134 per farm. Subsidy checks to California farms tend to be higher than the national average (although fewer California farms receive subsidies), because California farms are bigger. But even when you consider the average payment California farms received, it is striking how much more the farmers in the Tulare and Kern County water agencies are getting.

The 194 farmers in these two water districts are less than half of 1 percent of the total number of California farms receiving crop subsidies, but collectively they received 5 percent of the total USDA payments to farms in the state. The average payment going to the Tulare Lake and Kern County farmers from 1995 and 2003 was almost 12 times higher than the average payment to farms in the rest of the state: $1,279,364 vs. $110,386. The bottom line is that the Tulare Lake and Kern County farmers were already taking much more from the taxpayers than most farmers in California — but the Bush Administration decided they were entitled to another $16.7 million.

graphic

Nor were most of these payments going to help struggling family farmers stay on the land. The top subsidy recipient was J.G. Boswell Co. of Corcoran, in Kings County. Boswell is the world's largest cotton grower, a dominant position that $23.9 million in USDA payments between 1995 and 2003 must help in maintaining. Boswell is an extreme example of how far federal farm programs go to help growers of select commodities: Not only did Boswell receive $17.3 million in crop subsidies, but got another $6.6 million under a subsidy called Step 2.

The Step 2 program gives money to U.S. companies that mill cotton into thread and cloth for export, to help them buy U.S.-grown cotton. This financial incentive is necessary because American cotton is much more expensive than cotton grown elsewhere around the world. Why? Because of the crop subsidies provided to American cotton farmers, which artificially push the price of U.S. cotton above world market levels. As both a cotton grower and a miller, Boswell's farm operation can use its crop subsidies to ensure it makes a profit from growing cotton. Then its milling operation can tap the Step 2 program to lower its cost to buy more raw cotton for milling and export.

TABLE: Top 20 Subsidy Recipients

Farm/Farmer Name City/State Total Farm
Subsidies Received
(1995-2003)
1: J G Boswell Company Corcoran, CA $23,919,679
2: Dublin Farms Corcoran, CA $11,913,936
3: Hansen Ranches Corcoran, CA $8,616,787
4: C.J. Ritchie Farms Visalia, CA $8,225,657
5: Buttonwillow Land & Cattle Company Buttonwillow, CA $8,135,045
6: Starrh & Starrh Cotton Growers Shafter, CA $7,991,530
7: Westfarmers Visalia, CA $6,670,547
8: Gilkey 5 Corcoran, CA $5,588,236
9: Chicca Twin Buttonwillow, CA $4,897,759
10: Wheeler Farms Bakersfield, CA $3,972,321
11: Torigiani Farms Buttonwillow, CA $3,501,218
12: The Phoenix Farming Company Corcoran, CA $3,441,472
13: Four B'S Farms Corcoran, CA $3,432,123
14: Gilkey Enterprises Corcoran, CA $3,121,774
15: Harry Banducci & Sons Bakersfield, CA $3,107,042
16: Houchin Brothers Buttonwillow, CA $3,074,525
17: Fred Palla Farms Buttonwillow, CA $2,928,370
18: Newton Farms Stratford, CA $2,789,606
19: Cauzza Brothers Buttonwillow, CA $2,735,111
20: Toretta Farms Buttonwillow, CA $2,722,339
Total subsidies for top 20 recipients $120,785,076

Source: [34]

The next largest crop subsidy recipient among the farms that sued is Dublin Farms, also of Corcoran. Dublin Farms planted more than 9,000 acres of cotton and wheat in 2002 and got almost $12 million in USDA cash payments from 1995 to 2003. Corcoran, a dusty town of about 15,000, is the Beverly Hills of California farms that get crop subsidies: Other local members of the multimillion-dollar subsidy club are Hansen Ranches ($8.6 million), Gilkey 5 Farms ($5.6 million), Phoenix Farming Co. ($3.4 million), Four Bs Farms ($3.4 million) and Gilkey Enterprises ($3.1 million; exact connection to Gilkey 5 unknown). Each of these farms will share in the Tulare Lake settlement.

Farms in the water districts served by the Kern County Water Agency don't get individual USDA checks quite as large as their Tulare Lake neighbors, but they make it up in numbers. Led by C.J. Ritchie of Lost Hills and the Buttonwillow Land & Cattle Co., each with more than $8 million in crop subsidies from 1995 to 2003, no less than 58 KCWA farms got USDA payments of at least $1 million each.

Overall, 67 farms in the Tulare Lake and Kern County districts — more than one third — received checks totaling more than $1 million during this period. More than 100 farms got payments worth at least $500,000 — roughly $55,500 a year, more than the median household income in California in 2003 ($49,300), and 50 percent more than the median income in Tulare County ($36,343). [35]

Our database of farms sharing the settlement lists 145 farms which received no crop subsidies, but the number is almost certainly lower. We found many instances of names in the Farm Subsidy Database that appeared to match names of the farms we extracted from state pesticide use reports. But if we could not be certain that the farms were identical, we did not include those subsidies in our analysis.

Reselling Subsidized Water

Once the home of a vibrant fishery, today the watershed of the Sacramento and San Joaquin rivers is one of the most artificially controlled hydrological systems in the world: Both rivers have been dammed, as have all but one of their major tributaries. [36] The water from these vast river drainages eventually flows into the West Coast's largest estuarine ecosystem — the San Francisco Bay-Delta Estuary, which has also been extensively altered by human activity.

In the Delta, two massive pumping facilities extract water and funnel it into the largest federally-run water delivery system in the country and the largest state-run delivery system: the federal Central Valley Project (CVP) and the State Water Project (SWP), respectively. At certain times of the year when the SWP and the CVP are exporting high levels of water from the Delta, the San Joaquin River actually reverses its flow between its confluence with the Sacramento River and the pumps. The river actually flows upstream. As if these extreme disruptions of the natural fish and wildlife habitat weren't enough, the pumps themselves kill millions of fish each year. [36]

By the early 1980s, federal scientists realized that fish populations in the Delta and throughout the watershed were crashing — in large part because of the export of millions of acre-feet of water to the SWP and CVP. From 1987 to 1992, a severer drought exacerbated this already dire situation and ultimately forced the California Department of Water Resources to limit its agricultural water deliveries. It was also clear that a much more ambitious plan was needed to restore ecosystem health in the Bay and Delta. A joint state-federal agency known as CALFED was created to develop and implement this plan, which included a controversial program known as the Environmental Water Account (EWA).

The EWA, which has been in operation since 2000, is like a virtual water district where the customers are fish. EWA buys water from willing sellers within the CVP and SWP at market rates to use for environmental purposes, such as improving water quality in a particular section of river or helping to restore threatened fish species such as salmon and smelt. The idea was to provide a mechanism to protect fish without affecting agricultural water supplies. It was also hoped that the prospect of reselling their unused water would encourage conservation by farmers. The success of the EWA in accomplishing this goal is debatable: The program has been hampered by a limited budget and inadequate water supply. [37] One thing is clear: The EWA is a highly effective mechanism for water districts that get cheap irrigation water to make a bundle off of taxpayers.

graphic

As the EWA is a publicly funded entity, the government is essentially selling SWP and CVP water to farmers at very low prices, then buying it back later at much higher rates to replace water that never left the river in the first place. Since the EWA has been in operation, it has purchased water from 16 different water agencies. But one has profited far more than any other: the Kern County Water Agency. KCWA is the largest agricultural water contractor in the SWP. It serves 14 different water districts †1 within the San Joaquin Valley and receives, on average, 84 percent of the irrigation water delivered by the SWP each year. [38]

Between 2001 and 2004, KCWA paid an average of $63.40 per acre-foot †2 (af) for its SWP water. [38-42] This amounts to a subsidy of at least $100 an acre-foot, given that the California Department of Water Resources and the Federal Bureau of Reclamation recently estimated that if a new dam were built on the upper San Joaquin River, the irrigation water it would deliver would cost a minimum of $170.42 per af †3. [43] But the KCWA is getting an even better deal: It is allowed to sell part of its water back to the taxpayers via the EWA at rates as much as 7 times higher than what it paid.

From 2001-2004, KCWA sold 277,400 af of water to the EWA at an average price of $198 per af, for a total of $54.9 million. The Agency's profit was $38.6 million — an average of $9.6 million per year. [38-42] Overall, KCWA has received more than one-third of the total expenditures by the EWA, and by far more money of any other individual water agency. [38] KCWA has perfected a scam in which taxpayers subsidize its below-market purchase of a public resource (water), then must pay much more to buy the water back in an attempt to restore another public resource (fish). Perhaps the most outrageous part of the scheme is that the Bay-Delta needs restoration largely because of the diversion of subsidized agricultural water and the runoff of pesticides and other toxic agricultural chemicals.

graphic

Besides resales to the EWA, from 1995 to 2004 the Kern County Water Agency sold another 456,092 acre-feet of water to other water districts, and the Tulare Lake Basin district sold 76,941 acre-feet to other districts. Prices and profits for those sales are details hidden from the public by state law, so it is impossible to know how much profit these water agencies made on such transactions. [44] In 2002, The Sacramento Bee estimated that just three water districts that are part of KCWA in recent years had made more than $128 million from sales to municipalities. [45]

But in Kern County there is potentially even more profit to be made from reselling subsidized water — even if that water exists only on paper.

According to a 2003 investigation by the taxpayer watchdog group Public Citizen, the KCWA and three of the water districts it serves own 42 percent of the Kern Water Bank, a huge underground storage facility that can store about 1 million acre-feet of water. [46] The state spent $74 million to develop the water bank, then in 1994 turned it over to the KCWA after secret meetings produced the so-called Monterey Agreement. This was a pact between the state, big farmers and developers based on the hope that someday, by building new dams and reservoirs, the State Water Project will be able to deliver all of the 4.2 million acre-feet specified in its contracts. As noted previously, half of the amount contracted for currently exists only on paper.

Another 48 percent of the water bank is owned by the Westside Mutual Water Co., a paper entity owned, operated and housed in the Bakersfield offices of its only customer, Paramount Farming Co. According to the California Farm Bureau, Paramount Farming and its corporate siblings, Paramount Citrus and Paramount Farming, Inc., comprise the largest farm company in the United States. [46] From 1995 to 2003, Paramount received $576,000 in USDA crop subsidies.

Paramount is part of Roll International Corp., a holding company privately owned by Stewart Resnick of Beverly Hills, one of the richest people in Los Angeles with an estimated net worth of $740 million. [47] Through Roll International, Resnick also owns the Franklin Mint, mail-order marketers of kitschy commemorative memorabilia, and Teleflora, a national floral delivery service.

Public Citizen documented that Westside MWC was created by Paramount Farming in hopes of reselling some of its non-existent SWP allocation to the Los Angeles Department of Water and Power. (Fans of the film Chinatown need no reminder of the LA water department's dark history of water grabs.) However, the labyrinthian connections of corporate interests with ties to the Kern County Water Bank point to other potential customers: Developers who want to turn former and current farmland between Bakersfield and Los Angeles into sprawling new towns called Tejon Ranch and Newhall Ranch.

Dennis Mullins, vice president and general counsel of Tejon Ranch, is on the board of directors both of the Kern County Water Bank and two of the water districts that own it — districts that will share in the Tulare Lake settlement. Another of the water districts that will receive part of the settlement and is a part-owner of the water bank already delivers water to Newhall Land & Farming, developers of Newhall Ranch. And Public Citizen uncovered a water sales contract between Newhall and a company owned by Paramount's corporate parent, Roll International. It doesn't take a conspiracy theorist to guess that an ultimate goal of the water districts that control the water bank is to turn paper water from the SWP into real water they can sell to developers at a profit.

Until then, they have their share of $16.7 million to see them through.

Footnotes

†1 — Berrenda Mesa Water District, Lost Hills Water District, Belridge Water Storage District, Semitropic Water Storage District, Cawelo Water District, Kern County Water Improvement District #4, Rosedale-Rio Bravo Water Storage District, Buena Vista Water Storage District, Kern Delta Water District, Henry Miller Water District, West Kern Water District, Wheeler Ridge-Maricopa Water Storage District, Tehachapi-Cummings County Water District, and Tejon-Castaic Water District.

†2 — An acre-foot is the amount of water needed to cover an acre of land one foot deep, or 325,851 gallons.

†3 — This is a highly conservative cost estimate because it does not include the costs for road construction, relocations of existing facilities, environmental mitigation, land acquisition, reservoir cleaning, or interest.

Full List of Subsidy Recipients

Farms that will share in the "takings" settlement receive millions of dollars in federal farm subsidies.

Farm/Farmer City/State Total Farm
Subsidy Payments
1995-2003
J G Boswell Co. Corcoran, CA $23,919,679
Dublin Farms Corcoran, CA $11,913,936
Hansen Ranches Corcoran, CA $8,616,787
C.J. Ritchie Farms Lost Hills, CA $8,225,657
Buttonwillow Land & Cattle Co. Buttonwillow, CA $8,135,045
>Starrh & Starrh Cotton Growers Shafter, CA $7,991,530
Westfarmers Visalia, CA $6,670,547
Gilkey 5 Corcoran, CA $5,588,236
Chicca Twin Buttonwillow, CA $4,897,759
>Wheeler Farms Bakersfield, CA $3,972,321
Torigiani Farms Buttonwillow, CA $3,501,218
Phoenix Farming Co., The Corcoran, CA $3,441,472
Four B's Farms Corcoran, CA $3,432,123
>Gilkey Enterprises Corcoran, CA $3,121,774
Harry Banducci & Sons Bakersfield, CA $3,107,042
Houchin Brothers Buttonwillow, CA $3,074,525
Fred Palla Farms Buttonwillow, CA $2,928,370
Newton Farms Stratford, CA $2,789,606
Cauzza Bros. Buttonwillow, CA $2,735,111
Toretta Farms Buttonwillow, CA $2,722,339
>Palla Rosa Farms Bakersfield, CA $2,618,773
Cerro Farms Bakersfield, CA $2,579,032
Gardiner Farms Bakersfield, CA $2,437,694
John Crump Bakersfield, CA $2,419,064
Carmel Partners Wasco, CA $2,415,896
Parsons Farms Buttonwillow, CA $2,378,740
Joe Fanucchi & Sons - South Arvin, CA $2,373,069
Roy & George Fanucchi Shafter, CA $2,239,553
Belluomini Farms Buttonwillow, CA $2,132,648
John Romanini & Sons Buttonwillow, CA $2,099,618
Westlake Farms,inc. Stratford, CA $2,087,842
Triple B Farms Bakersfield, CA $2,038,721
K. Barnard & Sons Bakersfield, CA $2,036,862
R & G Farms Bakersfield, CA $2,024,910
Bidart Brothers Bakersfield, CA $1,969,727
Elk Grove Ranch Buttonwillow, CA $1,949,892
Mario Buoni & Sons Bakersfield, CA $1,916,568
Destefani Farms Bakersfield, CA $1,890,467
Pierucci Farms Bakersfield, CA $1,862,257
Four D Farming Bakersfield, CA $1,746,082
Kosareff Farms Buttonwillow, CA $1,729,592
Banducci & Son Buttonwillow, CA $1,701,794
Costerisan Farms Bakersfield, CA $1,699,019
Greenlee Farms Bakersfield, CA $1,661,342
Franceschi & Son Farms Buttonwillow, CA $1,654,879
Mckittrick Ranches Bakersfield, CA $1,643,347
J. D. & K. Farms Bakersfield, CA $1,586,447
M & M Farms Bakersfield, CA $1,555,196
Houchin Ranch 7 Buttonwillow, CA $1,404,873
R & B Farms Shafter, CA $1,390,184
Vandborg Farms Lamont, CA $1,371,686
Stenderup Ag Partners Bakersfield, CA $1,365,299
Bel-An Farms Bakersfield, CA $1,352,067
Don Schulte Farms Bakersfield, CA $1,346,920
J. S. A. Company Bakersfield, CA $1,309,070
S & S Farms Bakersfield, CA $1,281,286
K. M. Farms Bakersfield, CA $1,223,326
Aldo Antongiovanni & Son Buttonwillow, CA $1,207,421
Rodney Palla Farms Bakersfield, CA $1,158,711
Julian Pierucci & Son Buttonwillow, CA $1,152,363
Tillema Farms Bakersfield, CA $1,140,038
Walter Delfino Buttonwillow, CA $1,133,066
Kootstra Dairy Farm Bakersfield, CA $1,132,834
Palla Farms Bakersfield, CA $1,107,257
D J Farms Taft, CA $1,064,193
SRB Farms Lost Hills, CA $1,059,308
Bryan Bone Farms Bakersfield, CA $1,009,524
E.w. Suorez Farms, Inc. Bakersfield, CA $985,490
A. J. Torrigiani & Sons Buttonwillow, CA $962,685
George Borba & Son Dairy Chino, CA $956,241
Joseph A. Eyraud & Sons, Inc. Bakersfield, CA $946,319
Ralph And Greg Palla Bakersfield, CA $939,599
Maple Farms Bakersfield, CA $938,451
Don Valpredo Farms Bakersfield, CA $928,341
Kophamer & Kophamer Bakersfield, CA $925,571
H 3 Ranch Buttonwillow, CA $912,029
Progresive Associates Group Bakersfield, CA $892,055
Bloemhof Katoen Boerderij Wasco, CA $880,413
Baggiani & Isola Buttonwillow, CA $809,892
A.J.B. Ranch Bakersfield, CA $760,804
H. V. Farms, Inc. Bakersfield, CA $744,742
G. and M. Farms Buttonwillow, CA $744,448
David Torgiani Farms Buttonwillow, CA $717,088
Frank & Daniel Fugitt Bakersfield, CA $711,737
Tri-fanucchi Farms, Inc. Arvin, CA $708,932
Parker Farms Bakersfield, CA $697,886
Albert & Lilly Ghilarducci Frm Buttonwillow, CA $666,461
R. M. Mettler (Metco) Bakersfield, CA $666,037
Arthur Ghilarducci Buttonwillow, CA $657,120
J & W Farming Bakersfield, CA $656,033
Wilgenburg Dairy Farm Bakersfield, CA $648,230
John A. Miller Farms Wasco, CA $635,211
Shaen Magan Family Trust Bass Lake, CA $632,237
Roy & Jelsey Romanini Farms Buttonwillow, CA $631,052
Rudy Angone Bakersfield, CA $626,223
Giannelli Farms Bakersfield, CA $617,458
Suburu Farms Bakersfield, CA $600,950
V & C Farms Bakersfield, CA $596,186
Mettler Ag/David Mettler Bakersfield, CA $590,745
Tejon Ranch/Laval Farms Lebec, CA $589,180
A. Cattani & Son Bakersfield, CA $581,051
Paramount Farming Co.-Eastside Bakersfield, CA $576,597
Val-Ridge Farms Bakersfield, CA $571,428
4-B Farms Buttonwillow, CA $548,543
E. H. A. Farms Bakersfield, CA $541,570
R & M Jelmini Farms Bakersfield, CA $541,567
Howard Frick Farms Bakersfield, CA $534,920
MNA Trust Bakersfield, CA $532,446
Riverbend Dairy #2 Tulare, CA $525,654
V.B. Zaninovich & Sons, Inc. Richgrove, CA $503,529
Costamagna Bros Bakersfield, CA $493,987
Thomson Land Company Bakersfield, CA $493,338
Opal Fry & Son Bakersfield,, CA $486,395
Bonanza Farms Bakersfield, CA $450,528
Tut Bros. Farms Watsonville, CA $440,501
Sierra Victor Ranch Company Delano, CA $439,525
Community Recycling Lamont, CA $433,937
Bloemhof Ag Ent Wasco, CA $430,593
Wm. Bolthouse, Inc. Bakersfield, CA $429,176
Jarrard Farms Bakersfield, CA $423,897
Nikkel Bros. Farms Bakersfield, CA $418,157
R & K Farms Buttonwillow, CA $412,156
Gino Buoni Bakersfield, CA $411,552
Fanucchi Enterprises Arvin, CA $390,274
Munger Investments Delano, CA $389,504
Munger Farms Delano, CA $389,504
Richard Clasen Bakersfield, CA $386,584
H. Spitzer & Sons Inc. Lamont, CA $381,161
Jimmie Icardo Farms, Inc. Bakersfield, CA $373,932
Del Papa Farms Bakersfield, CA $370,950
Cappello Farms, Inc./Oak Flat Bakersfield, CA $346,223
Feed Resources LLC Bakersfield, CA $327,988
Mitchell Farms Bakersfield, CA $324,321
Carlos Gomez Bakersfield, CA $320,333
Sam Andrews Sons Bakersfield, CA $309,541
Corotto Co., Inc. Edison, CA $304,453
Tehachapi Vineyards Ceres, CA $300,646
Richline Farms Bakersfield, CA $265,268
Kingsburg Citrus Ranch Mcfarland, CA $253,253
Royal Farms Fresno, CA $244,996
Sunview Vineyards Of CA., Inc. Mcfarland, CA $236,025
Wheeler Ridge Farming Co. Rancho Cucamonga, CA $233,187
Walker Fry Ranch Bakersfield, CA $233,063
Trinity Farms, Inc. Bakersfield, CA $232,710
M.A.D. Farms ?, CA $221,527
Dosanjh Bros. Farm Bakersfield, CA $212,655
Sandhill Farms Arvin, CA $205,090
Bhogal Farms Bakersfield, CA $199,152
Ray-lee Company Bakersfield, CA $198,577
Poso Creek Ranch Delano, CA $197,440
Gar Mcleod & Sons Bakersfield, CA $187,540
Banducci Farms Bakersfield, CA $186,025
Norman Shepherd Buttonwillow, CA $179,067
Bapu Farming Co. LLC Madera, CA $174,583
Paul Coombs & Sons Bakersfield, CA $169,611
7 K Ranch Bakersfield, CA $165,950
Joel Suburu Bakersfield, CA $165,409
San Raphael Fruits, Corp. Rolling Hills Estate, CA $157,229
Agriswiss, Inc. Mcfarland, CA $135,840
M & E Farms Bakersfield, CA $134,303
M. J . B. Farms Delano, CA $125,758
Kirschenmann Farms Lamont, CA $123,776
Harold Fleishauer & Son Bakersfield, CA $119,064
Baroncini Bros. Bakersfield, CA $117,089
John S. Antongiovanni Jr. Bakersfield, CA $111,133
Larsons Dairyland Bakersfield, CA $109,817
I & I Farms Inc., Frank Icardo Lamont, CA $107,882
Jack Schweikart Bakersfield, CA $105,582
Mc Carthy Family Farms Corcoran, CA $99,986
Affentranger & Sons Bakersfield, CA $99,902
Anthony Vineyards Bakersfield, CA $79,563
California Pistachio Bakersfield, CA $78,269
Roden Farms Shandon, CA $76,700
Frank Garone, Jr. Bakersfield, CA $75,384
Miersma Family Dairy Chino, CA $75,278
Rich Mar Farms Bakersfield, CA $73,116
Andrewsag Inc. Bakersfield, CA $73,072
Norman Etchison Bakersfield, CA $54,752
Golden State Vinters, Inc. Fresno, CA $46,106
Cal Farm Invest Bakersfield, CA $45,065
Mark Johnson Bakersfield, CA $43,586
Amaretto Orchards c/o Ag Wise Bakersfield, CA $36,318
J.F. & S. Farms Bakersfield, CA $35,408
Tom Sandrini Bakersfield, CA $33,453
7th Standard Ranch Shafter, CA $30,601
King-pak Farms Lamont, CA $19,981
Michael Hat Manteca, CA $15,232
Louis Riccomini & Sons Bakersfield, CA $11,088
Kundert Brothers Farms Edison, CA $10,821
Andrew Brancato Bakersfield, CA $8,206
Holmes Ag. Management Fresno, CA $5,152
Sunset Farms Bakersfield, CA $3,299
Bloemhof Land & Farming Wasco, CA $1,568
Primex Fresno, CA $288
Singh, Jagtar Fresno, CA $0
John J. Kovacevich & Sons Arvin, CA $0
Yaksitch Farms Lamont, CA $0
Kindig Bros. Bakersfield, CA $0
Grimmway Enterprises Bakersfield, CA $0
Thomas Miles Bakersfield, CA $0
Giumarra Vineyards Bakersfield, CA $0
Stephen Pavich & Sons Lindsay, CA $0
Rancho Alexander Mcfarland, CA $0
Key Farm Arvin, CA $0
G & G Farms Bakersfield, CA $0
Kern Ridge Growers Arvin, CA $0
Vignolo-Delmart Farms Shafter, CA $0
Bushnell Farm Buttonwillow, CA $0
Richard Enns Bakersfield, CA $0
Lester E. Stout Bakersfield, CA $0
Hankins Farms, Inc. Wasco, CA $0
7th Standard Ranch Co. Bakersfield, CA $0
Malibu Vineyards Delano, CA $0
Blackwell Land Co. Bakersfield, CA $0
Badger Farming Exeter, CA $0
Nalbandian Lamont, CA $0
Old River Sod Bakersfield, CA $0
Romero Farms Bakersfield, CA $0
Western Ag Specialists Sanger, CA $0
Paramount Citrus Delano, CA $0
Foxtail Farms Bakersfield, CA $0
Hall Farming Arvin, CA $0
Hein Ranch Company Visalia, CA $0
Poochigian Farms Bakersfield, CA $0
James Tazioli Buttonwillow, CA $0
Don And Alfred Palla Bakersfield, CA $0
Aldo Angone Farming Bakersfield, CA $0
Don Laux Farm Management Porterville, CA $0
Agro Farming Arvin, CA $0
Doug Kaiser Farms Bakersfield, CA $0
Norman Efird Farms Bakersfield, CA $0
Blair Farms Buttonwillow, CA $0
Lloyd Unruh Farms Bakersfield, CA $0
Smith & Sons/Smith & Smith Bakersfield, CA $0
Fred Starrh Farms Shafter, CA $0
Desert Ranch Wasco, CA $0
Hay Brothers Bakersfield, CA $0
Pioneer Nursery Visalia, CA $0
Universal Farming #105 Redondo Beach, CA $0
C.S. Sidhu Farms Bakersfield, CA $0
Famoso Vineyards Delano, CA $0
Rainbow Ranches, Inc. Bakersfield, CA $0
Dennis & Peter Frick, Inc. Bakersfield, CA $0
Ugo Antongiovanni Farms Bakersfield, CA $0
Dole Fresh Fruit Co. - Rch Lma Bakersfield, CA $0
D. M. Camp Bakersfield, CA $0
Dushmesh Farms, Inc. Bakersfield, CA $0
Jack Reed Farming Edison, CA $0
Ag. Management Associates, Inc. Bakersfield, CA $0
Superior Sod Tehachapi, CA $0
A & P Ranch Lost Hills, CA $0
Robert S. Andrews Bakersfield, CA $0
Paramount Farming W Valley/DR Lost Hills, CA $0
Sunworld Inc.DBA Superior Farm Bakersfield, CA $0
Sun Pacific Farming Co. Bakersfield, CA $0
Eduardo Garcia Farm Earlimart, CA $0
Stan Voth Farms Wasco, CA $0
Rancho Esteli Visalia, CA $0
Shafter Ranch Lathrop, CA $0
Carreon Farms Bakersfield, CA $0
Tony Guerrero Arvin, CA $0
Lederhos Farms Bakersfield, CA $0
B J Farms Bakersfield, CA $0
Jim Hronis & Sons-Grapes Only Delano, CA $0
South Valley Farms Wasco, CA $0
D'Best Produce Co. Llc Fresno, CA $0
Sherwood 209- Sun Valley Assoc Visalia, CA $0
Delano Farms Company Delano, CA $0
H. P. Anderson and Son Tulare, CA $0
Webster Pistachios Kettleman City, CA $0
Garry Richardson Farms Bakersfield, CA $0
Double G Farms Buttonwillow, CA $0
I.N.A. Farm Corp. Bakersfield, CA $0
Gless Ranch, Inc. Riverside, CA $0
Kirk Elholm Farms Wasco, CA $0
Uni-CA Bakersfield, CA $0
Slaydeco Bakersfield, CA $0
South West 320 Fruit Co. Visalia, CA $0
G. T. S. Farms Bakersfield, CA $0
Agtoprof, Inc. Shafter, CA $0
Farmland Management Service Delano, CA $0
Chaparral, Inc. Fresno, CA $0
RWB Ranch & Tejon Lindsay, CA $0
J. H. Farms Escondido, CA $0
Triple Y Delano, CA $0
Kern Oil & Refining Co. Delano, CA $0
Four Star Fruit, Inc. Delano, CA $0
Ballantine Produce Co., Inc Sanger, CA $0
Gorgin Farms Fresno, CA $0
Lucas Brothers Visalia, CA $0
Grimmway Organics Bakersfield, CA $0
Doaba Farming Co., Inc. Bakersfield, CA $0
Elex Farms, Inc. Fresno, CA $0
John Allen Farms Bakersfield, CA $0
Kenny Mc Clanahan Farms Bakersfield, CA $0
Redbank-Malaga/Minda Corp Lindsay, CA $0
Dewar Farms Bakersfield, CA $0
Maricopa Slope Ranch Delano, CA $0
Southlake Ranch Delano, CA $0
Paramount Farms-Belridge Ranch Mckittrick, CA $0
Bel Lehr Organics Edison, CA $0
Betty Magan Bass Lake, CA $0
Islam Farms Bakersfield, CA $0
Mid State Lab Test Farm Bakersfield, CA $0
Ron Fanucchi Farming Bakersfield, CA $0
Twinland Wasco, CA $0
Del Monte Fresh Produce Sanger, CA $0
Sunshine Farms Fresno, CA $0
Willow Ridge Ranch Shafter, CA $0
S And H Farms Gonzales, CA $0
Maricopa Ceres, CA $0
Don Cox Bakersfield, CA $0
Old West Farming DBA Sunmet 51 Fresno, CA $0
Maricopa Nursery Corp. Manhattan Beach, CA $0
Castillo Farms Los Angeles, CA $0
Sun Pacific Farming - Maricopa Bakersfield, CA $0
Castle Rock Farming & Transprt Delano, CA $0
Sun Pacific Farming-mcfarland Bakersfield, CA $0
Raaviz Farms Fresno, CA $0
Norag Co. Bakersfield, CA $0
Klein Management Inc. Bakersfield, CA $0
Alborz Farms, LLC Fresno, CA $0
Cal-Organic Vegetable Co. Bakersfield, CA $0
Greenwood Farms Buttonwillow, CA $0
Dynamic Farms Scotts Bluff, NE $0
Bidart Farms Chino, CA $0
Etchegaray Farms Earlimart, CA $0
Loma Ranch Los Angeles, CA $0
FMP Vineyards Llc Bakersfield, CA $0
Jack S. Thomson Farming Co. Bakersfield, CA $0
Covenant Farms Bakersfield, CA $0
Hill Maricopa Ranch Arvin, CA $0
Ben Lapadula Bass Lake, CA $0
Paragon Seed Inc. Salinas, CA $0
Tulare Lake Farming Co. Corcoran, CA $0
Hure Brothers Delano, CA $0
Giannetto Citrus Terra Bella, CA $0
Superior Almonds Porterville, CA $0
Sun Pacific Farming (tomato) Exeter, CA $0

Acknowledgements

Principal author: Renee Sharp

Editor: Bill Walker

Additional research: Arianne Callender, Simona Carini, Brendan DeMelle, Sonya Lunder

Site design and graphics: T.C. Greenleaf

Database and GIS mapping: Chris Campbell, Sean Gray

Advice and editorial review: Hal Candee, Steve Davies, John Echeverria, John Gibler, John Leshy, David Owen, Joseph Sax

This investigation was made possible by the generous support of George Miller of San Francisco. Opinions expressed are those of the author and editor, who are responsible for any errors.

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References

[1] CA Department of Water Resources. 2005. http://www.publicaffairs.water.ca.gov/swp/

[2] CA Department of Water Resources. 2004. Bulletin 132-03. Management of the California State Water Project.

[3] Tulare Lake Basin Water Storage District v. United States, 49 Fed. Cl. 313 (2001)

[4] Endangered Species Act of 1973, 16 U.S.C. 1531-1544 (2000)

[5] National Marine Fisheries Service. 1992. Biological Opinion: Central Valley Project, 1992 Operation 31-32 (1992).

[6] Benson, M H. 2002. The Tulare Case: Water rights, the Endangered Species Act, and the Fifth Amendment. 32 Environmental Law. 551.

[7] Benson, 556.

[8] Tahoe-Sierra Pres. Council v. Tahoe Reg'l Planning Agency, 535 U.S. 302, 324 (2002) (Echeverria, note 159).

[9] Tahoe-Sierra (Echeverria at 356).

[10] Tulare, 49 Fed. Cl. at 320

[11] O'Neill v. United States 50 F.3d 677 (9th Cir. 1995)

[12] Planning & Conservation League v. Department of Water Resources. (2000) 83 Cal.App.4th 892

[13] National Audubon Society v. Superior Court of Alpine County, 33 Cal.3d 419, 425 (1983)

[14] National Audubon Society v. Superior Court of Alpine County, 33 Cal.3d 426 (1983)

[15] United States v. State Water Resources Control Board, (1986) 182 Cal.Appl.3rd [SC: 3d] 82, 227 Cal. Rptr. 161, 170.

[16] California Constitution, Art X, 2.

[17] Tulare Irr. Dist. v. Lindsay-Strathmore Irr. Dist. 3 Cal. 2nd 489, 567, 45 P.2d 972.

[18] CA Department of Water Resources. 2005. Available at http://www.publicaffairs.water.ca.gov/swp/waterrights.cfm

[19] Tulare Lake Basin Water Storage District v. United States 59 Fed. Cl. 246 (2003)

[20] Doyle, M. 2004. US appeal urged in water dispute. Sacramento Bee. December 18, 2004.

[21] Feinstein, D. 2004. Senator Feinstein urges appeal of court decision affecting endangered salmon in the San Francisco Bay-Delta. December 16, 2004.

[22] A water giveaway. San Francisco Chronicle. December 13, 2004.

[23] National Oceanic and Atmospheric Administration (NOAA). 2004. Letter from James R. Walpole, NOAA Office of the General Counsel, to Honorable Thomas L. Sansonetti, Assistant Attorney General, Environment and Natural Resources Division, US Department of Justice. Letter Re: Recommendation to Appeal Final Judgement in Tulare Lake Basin Water Storage District v. United States, No. 98-101L (Fed. Cl.) March 8, 2004.

[24] Heartland Institute. 1998. How EPA has taken the Environment out of Environmental Enforcement: an Exclusive Interview with Roger Marzulla. September 1, 1998. Available at http://www.heartland.org/Article.cfm?artId=13827

[25] Associated Press. 2004. California Water-Rights Ruling Could Threaten Species Protection, by Seth Hettena. February 8, 2004.

[26] Clearinghouse on Environmental Advocacy and Research (CLEAR). 2001. Gale Norton's Associations with Anti-Environmental and Wise Use Groups. Accessed online January 31, 2005 at http://www.clearproject.org/reports_nortonWU.html

[27] Community Rights Counsel (CRC). 2001. Takings Watch newsletter. Available at http://www.communityrights.org
/CommunityRightsReportNewsletter/Archive/Washington2001archive.asp

[28] Los Angeles Times. 2004. U.S. Billed for Lost Water; Judge rules that irrigators whose supplies were decreased to save endangered fish are owed $14 million, by Bettina Boxall. January 26, 2004.

[29] Klamath Basin Crisis. 2003. Statements, questions and answers by irrigators' attorney Roger Marzulla, 3/12/03. Available at http://www.klamathbasincrisis.org/articles/Marzulla031103.htm

[30] Greenwire. 2005. WATER: Fish takings payout raises hopes for irrigators. January 7, 2005.

[31] Modesto Bee. 2004. Government Urged To Appeal Water Settlement Water Districts Awarded $26 Million Over Deliveries, by Michael Doyle. December 17, 2004.

[32] Los Angeles Times. 2004b. U.S. to Pay $16 Million in Water Rights Case; Feds settle with Central Valley farmers who sued when deliveries were cut to help endangered fish, by Bettina Boxall. December 22, 2004.

[33] Contra Costa Times. 2005. U.S. water pact makes big waves, by Mike Taugher. January 18, 2005.

[34] Environmental Working Group. 2005. Farm subsidies database. Available at https://www.ewg.org/farm/

[35] U.S. Census Bureau. 2003. Current Population Survey, Annual Social and Economic Supplements and Median Household Income (In 2003 Inflation-adjusted Dollars). Data available at http://www.census.gov/hhes/income/histinc/h08.html and http://www.census.gov/acs/www/Products/Ranking/2003/R07T050.htm

[36] The Bay Institute of San Francisco. 2001. The first annual state of the Environmental Water Account Report. September 2001. Available at: www.bay.org/science/EWA01-4.pdf

[37] The Bay Institute of San Francisco. 2002. The first annual state of the Environmental Water Account Report. October 2002. Available at: www.bay.org/Pubs/EWA2002.pdf

[38] California Department of Water Resources. 2005. Environmental Water Account acquisitions. 2000/1 — 2003/4. Data available at http://www.watertransfers.water.ca.gov/water_trans/water_trans_index.cfm

[39] California Department of Water Resources. 2001. Bulletin 132-00. Management of the California State Water Project. December 2001. Available at: http://wwwswpao.water.ca.gov/publications/index.cfm

[40] California Department of Water Resources. 2002. Bulletin 132-01. Management of the California State Water Project. December 2002. Available at: http://wwwswpao.water.ca.gov/publications/index.cfm

[41] California Department of Water Resources. 2004a. Bulletin 132-02. Management of the California State Water Project. January 2004. Available at http://wwwswpao.water.ca.gov/publications/index.cfm

[42] California Department of Water Resources. 2004b. Bulletin 132-03. Management of the California State Water Project. December 2004. Available at http://wwwswpao.water.ca.gov/publications/index.cfm

[43] US Bureau of Reclamation and the California Department of Water Resources. 2003. The Upper San Joaquin River Basin Storage Investigation. Phase 1 Investigation Report. Initial Surface Storage Options Screening. October 2003. Available at http://www.usbr.gov/mp/sccao/storage/

[44] On Tap. 2005. California water market information. Data available at http://ontap.ca.gov/transactions/

[45] Kasler, D; Leavenworth, S. The water's hot: State's farmers find avid market for what they've opted not to use. The Sacramento Bee. July 14, 2002.

[46] Public Citizen. 2003. Water Heist: How Corporations are Cashing in on California's Water. Available at http://www.citizen.org/pressroom/release.cfm?ID=1610

[47] Arax, M. 2003. Massive Farm Owned by L.A. Man Uses Water Bank Conceived for State Needs. Los Angeles Times. Dec. 19, 2003.

[48] Echeverria, John D. and J. Lurman, 2003. The Endangered Species Act: Thirty Years of Politics, Money, and Science: 'Perfectly Astounding' Public Rights: Wildlife Protection and the Takings Clause," 16 Tul. Envtl. L. J. 331, 356, n. 11 (Summer 2003).

[49] Boise Cascade Corp. v. United States, 296 F.3d 1339, 1352-1357 (Fed. Cir. 2002), cert. denied, 123 S. Ct. 1484 (2003).

[50] National Marine Fisheries Service. 1993. Biological Opinion for the Operation of the Federal Central Valley Project and the California State Water Project (1993).

[51] U.S. Fish and Wildlife Service. 1993. Formal Consultation on the 1994 Operation of the Central Valley Project and State Water Project: Effects on Delta Smelt (1993).

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