For me? You are too kind.

The Sacramento Bee will be doing a yearlong series on almonds. I can only understand this as meant for my personal gratification, presumably because I was good in a past life. May I suggest some stories I would love to see in this series? I will keep a running list here.

A story on the rise of almonds in our food. I believe our current levels of almond consumption are nearly entirely an artificially created demand. This reveals my crotchety aged self, but I remember when breakfast cereals didn’t have almonds in them and we ate them with cow’s milk, dagnabbit. Trail mix used to be peanuts and raisins, not almonds, white chocolate chips and dried cranberries. Someone at the almond board has done an incredible job and I would love to read more about that person.

A compare and contrast between the original almond growers up near Chico and the new growers (last decade or so) in the San Joaquin. You could get some very nice Quainte Olde pictures of family farms in orchards up near Chico.

Used to be, there were two nut processors in the state, Blue Diamond and um, that other one. Are there more now? What happens to an almond when it leaves the orchard? Are the new large-scale growers vertically integrated?

What happens at the end of the production life of an almond orchard?  There are a lot of irrigation equipment and trees to dispose of.  I don’t suppose those trees can be burned, considering air quality management rules (maybe I am wrong).  So what does happen?  How will that work when three hundred thousand acres of new almond trees age out within five or ten years of each other?

As I look at the quote about Mr. Guadian’s 150 acres, I wonder who is financing the almond expansion.  Who on earth would loan him $500,000 to dig a well, when (I assume) the collateral is land that will become worthless when the well goes dry?  (My guess is that the land is mortgaged as well.)  What bank is doing that?  How is this different from the housing crisis?  For that matter, like the housing crisis, how is the bank prepared to re-possess and clean up tens of thousands of acres of dead almond orchards?

As I think of more, I will leave them here.  Thank you so much, Sacramento Bee!

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Twelve years is a very short time.

The Sacramento Bee proposes to write a yearlong series on almonds in California. I will be reading that with great interest. I was disappointed, however, by their close in a recent editorial.

No one can tell farmers what to grow or not grow. The market decides that. We all eat what they produce. But water is a shared necessity. Even if California muddles through this drought, a most basic question lingers: How will it divide water … 20 and 30 years from now?

This is, of course, wrong.  It is true that we do not currently tell farmers what to grow, that we let farmers assess their chances in a market and accept their profits and losses independently.  In that sense, we do not tell farmers what to grow.  But we could tell them what they may and may not do with the water that belongs to the State as a whole, although we have issued some rights to use it in some conditions to private citizens.

I have read Felicia Marcus say that they are not looking at crop-specific bans (my paraphrase, and apologies for not finding the link), which I suspect is an allusion to almonds.  Without specifically naming almonds, however, the State Board could find that in our new more variable climate, it is not reasonable to plant (or irrigate) permanent crops like trees and vines in a basin with declining groundwater levels.

I like this approach for two reasons.  First, it is true.  It is not reasonable to grow trees that need a fixed amount of water every year when the amount of available surface water is wildly variable and the buffer of groundwater is going away in the lifespan of the tree.  Second, it could bring big players to the table as agencies form their new groundwater management plans.  There is an out for people who want to grow permanent crops in that rule; they could locate in groundwater basins that are being adequately recharged.  Or, they could find ways to bring their own basins into balance.  The rule ‘no trees or vines overlying an overdrafted groundwater basin’ could end the race to dig the deepest well. It could prevent stories like this:

Guadian … bought his own farm seven years ago, planting 150 acres of almonds near Mendota. Last year, he invested $500,000 to drill a 1,100-foot well on his property.

Guadian says the well water is too salty for planting cantaloupes or tomatoes or most other vegetables without blending it with surface water supplies or paying for costly purification that could wipe out profits. But his almond trees like the well water. And now he’s thinking of buying another 150 acres nearby to grow pistachios.

Still the old farmer wonders about the future. “What’s going to happen in 12 years when my well goes dry?” he asks, then answers. “Those trees are going to die.”

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Housing prices only ever go up and wells never go dry.

Over on Mother Jones, Tom Philpott writes about hedge funds investing in almond orchards.

But massive financial interests—banks, pension funds, investment arms of insurance companies—are moving rapidly into the nut trade. Take TIAA-CREF, a New York-based retirement and investment fund with nearly a half-trillion dollars in total assets under management. The firm, which owns 37,000 acres of California farmland, claims to be one of the globe’s top five almond producers. On its website, TIAA-CREF says its California holdings produce more than 18 million pounds of almonds, or “enough to circle the world more than nine times.” In a report last year, the firm had one word for investors: nuts. It cited the rise of the nut-hungry Asian middle class and a global land base that’s “vanishing” because of urban sprawl, water scarcity, and environmental degradation. Almond orchards, said TIAA-CREF, were an “attractive long-term investment theme” with the potential to combine the steady income of bonds with the growth potential of stocks—a kind of investor’s holy grail.

Then there’s Hancock Agricultural Investment Group, a subsidiary of the sprawling Canadian insurance and financial services giant Manulife Financial. It manages $2.1 billion worth of farmland, mainly for large institutional investors like pension funds. Individuals can buy in—for a minimum investment of $5 million. HAIG owns at least 24,000 acres of almonds, pistachios, and walnuts, making it California’s second-largest nut grower. In a recent report to investors, HAIG reported that its nut holdings delivered more than 30 percent in total return (income from crop sales plus land appreciation) in 2013, far outpacing gains from its other crops like wine grapes, apples, cranberries, corn, and soybeans.

Did you guys read The Big Short, by Michael Lewis? The book is mostly about three characters who foresaw the housing market collapse and shorted it. But he also spends some time discussing why ratings companies missed the enormous risk of total collapse. If you recall, mortgages were bundled into batches and sold in tranches. Rating companies applied historic default rates for mortgages to a tranche to value it. But their models didn’t include the possibility that something could happen that could make every mortgage in the tranche default, rendering the entire package valueless. When the housing market collapsed, it made all the mortgages underwater at once; what made one mortgage valueless to the loan holder made the rest of the mortgages valueless at the same time. Defaults on mortgages were not independent events.

The same is true for these almond portfolios. The event that makes one almond orchard die or become valueless will hit all of the other almond orchards as well. Several readily foreseeable events could cause that: a drought like this year but a couple years longer. A groundwater basin failing (or being adjudicated) would hit every overlying orchard simultaneously. The nice people in Los Angeles and San Francisco could pass an initiative amending the California constitution to say that it isn’t a reasonable use of water to overdraft a basin or drain rivers to provide pleasant snacks for the world. The SWRCB could do that themselves.

When this level of almond production fails, the orchards will die in tandem. If I were a county or the state, I would get some laws on the books now. I would pass the Dead, Abandoned, Blightful, Nuisance Orchard Law, that says that if anyone abandons more than 1,000 acres of orchards in the county, they must pay an extortionate fine in cash money. Dollar dollar bills, y’all. Pass the law now while hedge funds somehow believe that almonds and groundwater are magically immune to climate change and patiently bide your time. The day will come.

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New American Dustbowl, Mr. Heathcock (1 of 3)

I am very impressed with Mr. Heathcock’s longform piece on how growers are responding to this year’s drought in the San Joaquin Valley.

I commend him for:

Focusing on the growers and their attitudes. The two major drivers in California’s water system are climate and people. A detailed article about the people for whom we move water shows us the forces (primarily their emotions and influence) behind how we got here.

Going the distance. Mr. Heathcock visited some obscure places and put in the driving hours.

Writing a beautiful and specific article that gives me enough material for commentary.

He did make some common outsider mis-steps, which I only noticed because he tells us about them.

He writes that he is surprised at the lack of talk about the weather. Heh. Why would we talk about the weather? From May to October, I can tell you exactly what the weather is going to be: hot, dry, clear. There’s nothing to talk about.

He mistakes “four hundred thousand to eight hundred thousand acres left idle, or 1,250 square miles of land on the high side” for a lot of land. Longtime readers here know there are about 9.5 million irrigated acres in California (round up to 10M irrigated acres if you want to do easy math). So he’s talking about 5% to 9% of California irrigated acreage idled this year, a year that received about 30% of its snowpack.

He traveled a ton of distance, so I can’t fault this one bit, but he missed that there are different (and occasionally rival) sets of farmers in California. Some century-old farms are in no danger up in the Sac Valley. Others in the Delta are specifically threatened by the actions of the south San Joaquin Valley growers.

This detail surprised me; I don’t think someone with a long familiarity with CA water rights would have included it.

Russ and Jim check on his well. His orchard is only hundreds of feet from the Kings River, which would naturally replenish his well if the river wasn’t dry.

If the Kings River is replenishing the well, the well is not sucking groundwater. It is taking the sub-surface flow of the Kings River. Unless the well owner has an appropriative right to Kings River water (with diversion method specified as “well”), that is straight up water theft. I would have left that out of an article meant to be kind to the well owner.

 

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New American Dustbowl and not giving a damn. (2 of 3)

Mr. Heathcock writes:

From what I’ve seen and heard I’m confused why the human tragedy has largely been ignored. It’s puzzling why a valley of such agricultural importance is shown so little respect. I post photos on Facebook, one of a vast field of withered grape vines, one of unfarmed land not far from the Wakefields’ home. Though I know many of my Facebook friends are the eco-conscious types the folks in this valley claim are pining for their demise, I’m convinced the photos will receive unanimous sympathy.

The comments on the photos begin as expected, folks thanking me for covering the story, outraged because they had no idea things were so bad. Then the first negative comment pops up. On the picture of the unfarmed land a “friend” posts: “Just saying — these must be really shitty farmers.” Another comment follows saying that one person’s tragedy and is another person’s call for change. The next claims this is what happens when you “over-farm” land. Yet another suggests my story isn’t about a water crisis, but about a “failed colony”.

There are two reasons that Mr. Heathcock’s friends (and urban food consumers in general) don’t care, both fascinating to me.   I am assuming that his friends’ reasoning is like mine. OK, really I am explaining my own reasoning here.

Why should we care?

Mr. Heathcock’s reason for expecting sympathy isn’t directly spelled out, but I believe it to be: “these people deserve sympathy because they are hurting. Have some compassion, you snarling beasts.” He doesn’t give any other reason they deserve sympathy besides the fact that his photos make the damage to farms visible to people who haven’t seen it before.  My reply is that climate change is impoverishing us all, and why should this group get more sympathy than any of the other groups that are hurt by it? Are farmers in the SJV more deserving of my sympathy than the failing restaurateur down the street being squeezed by food prices? He and his family work 14 hour days too. Do they deserve my sympathy more than Syrians drawn into a civil war started when Syrian farms started failing from drought? Do SJV farmers deserve my sympathy more than migrating birds that are starved of food and resting places as they migrate this fall?

Here’s the one that always gets me. Mr. Heathcock could have written a story exactly like this about the salmon industry. You could do rugged resource extractors on boats that their grandfathers built, idled by drought, pulling up to some nostalgic ice cream parlor in the Delta. The story could be the exact same, only with mournful ship bells clanging for atmosphere. That group is the direct competition for water with growers, equally picturesque and endangered by climate change and manly and shit. Why care about one and not the other? I will go to my grave wondering why one gets profiled and the other doesn’t.

So, of all the groups that hurt under the new climate (basically everyone, some worse than others), why should I have sympathy for SJV farmers? Because they are such careful farsighted stewards of the resources they care about? No. They’ve drained and polluted their groundwater for decades. They treat labor like it’s disposable. Because they are such considerate stewards of the resources I care about? No. The subsidence caused by their groundwater overdraft is breaking public roads, overpasses, buildings, canals, and I won’t even bring up the rivers and fish I would like to keep healthy in the state because then I would be “radical”. Reading that they generalize about my tribe as much as I do about theirs, and are intermittently hostile and suspicious of outsiders doesn’t make me more inclined to be sympathetic.

We don’t interact in a system based on mutual caring.

The larger reason that urban food consumers do not care about the San Joaquin Valley farmers is that we do not interact in a system based on caring. Instead we interact through a market. For growers, this means distributing their crops in the manner that gives them the highest profit, no matter where it goes. If a primary market for their sudan grass is in Japan and they make the most profit from it, that works fine so long as they don’t need their purchasers to give a damn about them personally. That connection is just too attenuated for Asian buyers to care about them. And I, their potential Californian consumer who might be close enough to care, have no connection because they aren’t selling me lovely fall pears. Likewise, Vidak’s quote rings true to me:

“No,” Vidak counters. “People in New York or Boise, Idaho, don’t care where their produce comes from.” The valley of farmers could go away, and so long as the product came from elsewhere no one would care.

One flat of onions looks just like the next in a grocery store in Delaware. Why would people in Delaware care about the grower in California? Interacting through a market system means that it is entirely appropriate for the seller to care primarily about profit and the buyer to care primarily about price.

We could choose a system that is based on caring, or at least is based explicitly on values besides profit and price. The state could choose “stable, egalitarian farming community” as a value, reform its water rights and subsidize growers through droughts. It could choose “food security” in return, so that growers first grow staples for direct human consumption, even if that doesn’t earn them as much as almonds do. For higher food prices, farm labor could have better living standards. In this system, farmers would also care about us, the urban consumers. Nowhere in Mr. Heathcock’s piece did I see a grower ever consider the notion of what food producers could do during a drought for the people who purchase their food.

I do care about them!

The last reason I find this question fascinating is that I do care about growers and have been writing on their behalf for years (although I doubt they’ve appreciated my advocacy). I don’t care about them in the way they want, which is to prioritize their water use above the other ways that California could put water to use. But I have warned them here for years that climate change is coming, that their best bet is to get out while they can still extract some capital. I have said here and elsewhere that there will be much less water available overall and much less irrigated acreage, that the transition will fucking suck for the farmers who have optimized to the old climate. They will fall gentle or they will fall hard, and if we gave a damn, the state has the resources to cushion that fall. So far as I know, no one has ever given serious thought to what managed retreat would look like in the San Joaquin Valley. Mr. Heathcock has written a great article on what unmanaged retreat does to the Valley.

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New American Dustbowl and Resilience (3 of 3)

Mr. Heathcock laments that his Facebook friends are unkind to the growers.

On the picture of the unfarmed land a “friend” posts: “Just saying — these must be really shitty farmers.”

I would not have said that these are shitty farmers. But I will say that they are not farming in a way that is resilient to drought, which is more frequent under the new climate. In some ways, the farmers themselves have noticed it. One farmer points out the yellowing leaves in all the pistachio orchards they pass. Another (Mr. Sihota) cannot pay for the cost of water to keep his vines alive this year, so he sells the land. If that land hadn’t been in permanent crops, he might have held on to it by growing nothing this year; at least that wouldn’t have cost him the money to buy water. Growing permanent crops locks them into a brittle system with fewer options: they can procure water at any cost or they can sell the land. The growers who were in row crops (Wakefields, cotton) have been able to sell piecemeal. That may not save their farm either, but it has extended their tenure on their farm.

The most interesting thing I see in this article is that wealth is not acting to create the resilience I’d expect. Rather, if my association of wealth with greater farm equipment or permanent crops (very expensive to plant) holds true, it seems to be making total failure more likely. I generally think that wealth buffers against poor periods, but in Mr. Heathcock’s story, the resiliency appears to be highest in the least wealthy and lowest in the most wealthy. The garlic pickers who are contemplating moving to Washington and Oregon (yes! good choice on their part if farm labor is their goal) have a mobility the others don’t. The growers in row crops can rent their land for the drought year (Barlow, cotton) or only farm the sections they have water for (Allen, cotton). It is the growers in permanent crops that are in all-or-nothing situations. I’d have thought they were the wealthiest, but their wealth hasn’t been kept in a form that can buffer them against drought.  They should be holding it in accessible form so they can get through dry years without farming.   I’ll have to think about this more.

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Why do their trees hold us hostage?

I’ve seen this story a few places in the last couple days. It has a catchy hook: water flowing back uphill! I understand it as a story about withdrawing groundwater from the Kern Water Bank in the southern Valley and pumping it back up the California Aqueduct (against a slight rise) to the middle western Valley.

My impressions:

    • It is more conceivable that water should flow back uphill than that a part of the Valley that has no water at all in drought years (that will become increasingly common) be zoned “not for permanent crops”. There is no such zoning today, but reversing gravity at the cost of energy and engineering scramble is considered do-able, but requiring that lands that are entirely dependant on the State Water Project, which cannot meet demand in a drought, not be planted with permanent crops is completely taboo.
    • Hey! This water is for tree nuts owned by Paramount Farms (the Resnicks). And they are in Dudley Ridge Water District. Dudley Ridge! The wholly unaccountable water district! The district with no residents, a few corporations who own the whole place and make up the Board of Directors, and the consultant engineer for a district manager. We haven’t talked about them since the last drought, when Sandridge sold away their water rights and pocketed the money. I thought that was the lead rat abandoning the ship, but apparently almond prices are so high that Paramount Farms is trying to hold on.
    • This effort is to run 30,000 AF of water 30 miles uphill for $6 or 7M, paid by the growers. Fine. Normally, I’d say that would water 10,000 acres of almonds for the year, but if they’re just applying a bare, tree-saving minimum and not trying to bring in a crop, perhaps it’ll stretch to 20,000 acres of almonds. As a reminder, there are 840,000 acres of almonds in the state. This kind of effort is for 2% of the almonds in the state.
    • The part of that story that bothers me most is this quote:

      If it doesn’t rain much next winter, the districts might seek to continue pumping the water backward in years to come, Melville said.
      “Ideally we would hope it’s a one-time thing,” he said, “but it would be worthwhile to have this as an insurance policy.”

If this is not a one-time thing, what the fuck are you doing planting trees there? We are all pretending that because this is a one-year, extreme drought and trees are so capital intensive, it is understandable to go to any length to keep trees alive for this year. If there is the likely prospect that our new climate includes more intense and frequent droughts, that land cannot sustain trees. We cannot normalize overdrafting groundwater, using public infrastructure for wholly private profits and dropping environmental protections if this is going to happen frequently. It may be appropriate to assume that land in Dudley Ridge can field row crops in wet years or even normal years. But if we actually believe that climate change is real, those trees will not see out their thirty years. They shouldn’t be there.

 

 

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