Ag Subsidies in Trouble

MWD (the subject of my dissertation) is supposed to serve urban Southern California, but they've sold water to ag interests for years at a cheaper (subsidized) rate. Since MWD charges too little for water, there are now water shortages, and MWD has started cutting off ag buyers:

Growers who bought discounted water under the Interim Agricultural Water Program have had deliveries cut by 30 percent, something they agreed to in the event of shortages when they signed up. Locally, growers have cut down thousands of citrus and avocado trees to save water.

The cut in water deliveries was supposed to be a rare event, but the water supply outlook has worsened so the cuts are expected to happen repeatedly. So Metropolitan is considering whether to make changes to the program.

The discount program would be studied for six months, and a final recommendation brought back to Metropolitan's board of directors for action in December, under a staff proposal. Alternatives include keeping the program as it is, phasing out the program, changing the pricing structure and eliminating the discounts altogether.

Farmers are happy when they get water cheaply but unhappy when they cannot get it at all. As a first step, MWD should charge farmers the same price as urban areas AND give them the same "security" from rationing. As a second step, MWD should raise its prices so that it stops having shortages!

Bottom Line: When water is used, it's used -- there's no point in favoring one use over another. Ag, urban and environmental users should all pay the same price (on the margin*) for water.

* Remember that I always advocate that people get a cheap "lifeline" supply for the first x gallons/water/day.