How subsidizing water can go wrong

Easy: if the going market price ever goes up.

With water becoming increasingly precious in California, a rising number of farmers figure they can make more money by selling their water than by actually growing something.

Because farmers get their water at subsidized rates, some of them see financial opportunity this year in selling their allotments to Los Angeles and other desperately thirsty cities across Southern California, as well as to other farms.

“It just makes dollars and sense right now,” said Bruce Rolen, a third-generation farmer who grows rice, wheat and other crops in Northern California’s lush Sacramento Valley.

Instead of sowing in April, Rolen plans to let 100 of his 250 acres of white rice lie fallow and sell his irrigation water on the open market, where it could fetch up to three times the normal price.

Argh. So much for helping agriculture and keeping food prices low.

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2 responses to “How subsidizing water can go wrong

  1. If we wanted to keep food prices low, wouldn’t step 1 be to outsource to places where you can live comfortably for only dollars a day?

  2. Not in 1935, when the federal government started the Central Valley Project to deliver cheap water during the Depression, or in 1960, when the State Water Project took up the cause.

    That’s the overarching problem with subsidy programs: even when they do what they’re supposed to do in the short term, at a cost people are willing to bear, they tend to stick around long, long after they stop making any sense at all.

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