You are hereKings County farmers land lucrative water sales

Kings County farmers land lucrative water sales

Posted at 11:59 PM on Sunday, Nov. 21, 2010
By Mark Grossi / The Fresno Bee
More farmers in Kings County plan to sell their water to Southern California at an eye-popping price, raising worries about the future of the region's thriving agricultural economy.

Two Kings farmers last month announced a pending water sale involving nearly $12 million. Another farmer last year sold some of his state water allotment for $73 million. Up to 3,500 acres of tree crops could go out of production because of the transfers.

The irrigation water comes from the troubled Sacramento-San Joaquin River Delta, where protections for dying fish have forced cutbacks in pumping. The result has been uncertain deliveries -- only 40% of State Water Project allotments this year.

Regardless of how much water they get, farmers must pay for the entire allotment to cover the costs of canals, dams and other facilities in the State Water Project. Then they must buy additional water on the open market to keep crops alive. That has some concluding it's too expensive to farm there anymore.

The water involved in the deals is a small percentage of water imported into Kings County. But some worry that other farmers will follow suit, causing the county's agricultural economy to wither.

"That's what makes us very concerned," said walnut farmer Jim Verboon, who has used more reliable Kings River water for many years. "We lose the production, taxes and jobs on that property when the water goes away. It's scary."

So far, there has not been a rush to sell out and shut down production.

Don Jackson and 3R Land and Development are the two farmers who announced the latest deal in the Dudley Ridge Water District. They propose to permanently transfer a total of 1,998 acre-feet of water to a large developer, Tejon Ranch Co. An acre-foot is about 326,000 gallons or a 12-month supply of water for an average family.

Tejon Ranch Co. is buying the Dudley Ridge allotment to help provide a water supply for a future community of 23,000 homes, a resort village and an industrial park in the Tehachapi Mountains south of Bakersfield.

The Dudley Ridge governing board is expected to approve the deal on Dec. 8.

Last year, another farming company in the same district, Sandridge Brothers, sold the contract rights to 14,000 acre-feet.

Besides Dudley Ridge, the Kings area also has Empire West Side Irrigation District and Tulare Lake Basin Water Storage District on the State Water Project. In the past 10 years, Tulare Lake Basin has had four permanent water transfers, state records show. The transfers amount to more than 18,000 acre-feet of water.

Such deals do not involve physical transfers of water, state officials say. Instead, the water district, on behalf of the farmer, sells a portion of the annual allotment to the buyer.

The selling price in the Dudley Ridge deals -- $5,200 per acre-foot for Sandridge Brothers and $5,850 per acre-foot for 3R and Jackson -- is 10 times the water's value to farmers. Farmers have little chance of competing for this allotment.

The farmers involved in the transfers say they were forced to sell after continuing cutbacks in State Water Project deliveries at the delta. The delta pumping restrictions help protect dying fish species, such as the delta smelt and winter-run chinook salmon.

There is little usable ground water beneath Dudley Ridge farmers. So they must buy replacement water on the open market, which drives up their irrigation costs.

"It's an unacceptable business risk for some smaller farmers to keep going," said water lawyer Ernest Conant, representing the two farmers involved in the latest sale.

Jackson is selling his rights to 1,630 acre-feet and 3R Land is selling 368 acre-feet. The two farmers have not been replacing fruit trees on about 1,000 acres in the last few years because they can't rely on the State Water Project supplies, according to Conant.

Without underground water to pump, the acreage will not be in production. But the farmers have indicated they probably will move their operations to a place with a more reliable water supply.

"Farmers want to stay in farming," said Diana Peck, executive director of the Kings County Farm Bureau. "That's what they do."

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