A horse stands in a field of dried grass on July 15, 2014 in Woodacre, California, as the severe drought continues to worsen.

A horse stands in a field of dried grass on July 15, 2014 in Woodacre, California, as the severe drought continues to worsen.

California supplies a sizable majority of the fruits, vegetables and nuts in the U.S. But the state is suffering through the third year of a devastating drought. Coping with the water scarcity could cost California more than two billion dollars this year alone. Farmers struggle to adapt, as hundreds of thousands of acres now lay fallow. With no drought relief in sight, questions persist about how the crisis could impact the cost of produce. What the continued drought in California could mean for our food and our wallets.

Guests

  • Richard Howitt Professor of Agricultural and Resource Economics at University of California, Davis. He is the lead author on a new drought impact study from the UC Davis Center for Watershed Sciences.
  • Alan Bjerga Reporter for Bloomberg News in Washington, D.C. focused on agricultural policy and commodities.
  • Veronica Nigh Economist at the American Farm Bureau Federation.

Transcript

  • 10:06:53

    MS. DIANE REHMThanks for joining us. I'm Diane Rehm. As California's three-year drought drags on, experts say it could continue for months or even years. Farmers are struggling to cope. Consumers worry about the impact on cost and availability of produce in grocery nationwide. Here to talk about the potential economic implications of the drought, Alan Bjerga of Bloomberg News, Veronica Nigh of the American Farm Bureau Federation.

  • 10:07:28

    MS. DIANE REHMJoining us from Davis, Calif. is Richard Howitt of UC Davis. He's professor of agriculture and resource economics at the University of California. He's lead author on a new drought impact study from the UC Davis Center for Watershed Sciences. I hope you will join in the conversation. Water and drought certainly could affect all of us. Call us, 800-433-8850. Send us your email to drshow@wamu.org. Follow us on Facebook or send us a tweet. And thank all of you for joining us.

  • 10:08:15

    MR. ALAN BJERGAThank you.

  • 10:08:15

    MS. VERONICA NIGHThank you very much.

  • 10:08:16

    PROF. RICHARD HOWITTThank you.

  • 10:08:16

    REHMGood to have you all. Richard Howitt, if I could start with you, I know you headed a study at UC Davis that's just been released. Talk about the drought and just how bad it is at this point.

  • 10:08:36

    HOWITTThis is the third drought year that we've even seen in 106 years. It's really bad. We've lost one-third of our surface water supplies. The only good news is that, for this year, we've got substantial ground water supplies in most places, but not everywhere. And these groundwater supplies, underground water, can be pumped up at a cost to offset about three-quarters of the surface river flow loss. However, that does leave pockets where people are really suffering by lack of jobs or lack of water for their farms.

  • 10:09:19

    REHMNow, can you give us a sense of just where this is having the greatest impact?

  • 10:09:28

    HOWITTIt's having the greatest impact where the groundwater is either too salty or just not there. And this is -- if you can visualize the California Valley as a 600-mile long valley between two mountain ranges, it's happening on the west side of the southern part and also some other parts which are large farms with many valuable crops. And it's happening also on the other part of the southern part of the valley where it's hitting much smaller farms with citrus and fruit crops.

  • 10:10:06

    REHMAlan Bjerga, you've been covering this story for quite a while. Where are residents and farmers turning for water?

  • 10:10:17

    BJERGAWell, there are all sorts of solutions that are being pursued, you know. In some cases, you do see some forms of water rationing. The private market will ration, you know. You can buy water rights from one farmer to another, and some farmers have been saying that in some years, maybe it'll cost $400 for an acre foot. They've seen prices 1,500, $2,000 to get groundwater.

  • 10:10:36

    BJERGAAnd then you see other interesting things happening with agriculture, too. You'll see farmers experiment with changing their crop mixes, going to crops that maybe are a little less water intense, like sorghum or even triticale, which is a kind of an obscure grain here, but it's very popular in Poland. And I actually talked to one dairy farmer a couple days ago, and he said, as a result of this drought and dryness, he's actually purchasing some property up in Oregon because he's actually hedging his weather risk by diversifying into other parts of the West Coast.

  • 10:11:01

    REHMInteresting. Can you talk, Alan, about what crops are being most seriously affected?

  • 10:11:11

    BJERGAWell, it's very interesting as we've seen the season play out because it's playing out a little differently than we expected. A lot of people are concerned about almonds. Eighty percent of the world's almonds come from California. It's also a very high-value crop for the farmers, a lot of concern early in the season that there would be a real dramatic effect on almond production, which is tough because demand for almonds, which are high protein, are going up.

  • 10:11:33

    BJERGAAs it appears, this groundwater supply that the professor was speaking about earlier is indeed helping the almond crop, and production actually is going to be up about three to 4 percent this year. But when you're looking at some of the vegetable crops, some of the citrus crops, you still have some issues going forward.

  • 10:11:48

    REHMAnd, Veronica Nigh, turning to you, talk about the kinds of crops, other than almonds, likely to be affected both in terms of perhaps even shortage and rise in prices.

  • 10:12:06

    NIGHI would echo the previous comment that, you know, farmers are certainly making a lot of different production decisions, and therefore the crops that have the lowest value on the marketplace are those that they're going to apply the least amount of water to at this point. So that means in that particular area, you're looking at feed grains for livestock, your corn, your soy beans, cotton, things along that lines that can be brought in from other areas at a fairly decent rate.

  • 10:12:37

    NIGHThe other portions of the country that grow those particular crops are actually having a very good year. So those are the acres -- those are the crops that farmers are going to give up on. They're going to fallow those acres first. So the higher the value of the crop, the more likely it is that they're going to receive those irrigation waters.

  • 10:12:53

    REHMSo how many acres are currently laying fallow?

  • 10:12:57

    NIGHAbout 800,000.

  • 10:13:00

    REHM800,000.

  • 10:13:02

    NIGHI would say, though, it's important to, you know, to note that there's about 8 million acres in California under irrigation, which is about 30 percent of all total ag acres in California. That gives you a good indication of why we're not expecting to see the large impact on prices that one might originally expect with such a devastating drought.

  • 10:13:23

    REHMWhat about things like avocadoes?

  • 10:13:26

    NIGHThings like avocadoes, things that are tree fruits, and that are multiyear investments to try to keep that crop up, farmers are definitely going to focus on those very high value capital intensive crops to make sure that they're able to keep those trees alive year on year because that's a long-term investment rather than a crop that you have to plant every year.

  • 10:13:48

    REHMAlan Bjerga.

  • 10:13:49

    BJERGAFollowing on Veronica's point, when you're asking about avocadoes and we're talking about almonds, that's a really important point to make about California agriculture, is that it's a very unique part of the country in that it grows the crops that people like to eat.

  • 10:14:02

    REHMOf course.

  • 10:14:02

    BJERGAIt's the fresh fruits and vegetables, and that's why people get so concerned about it. But those are also the higher value crops that farmers are most likely to preserve. This year, with the groundwater, they've been able to do it.

  • 10:14:12

    REHMAlan Bjerga, he's a reporter for Bloomberg News here in Washington. Veronica Nigh, she's an economist at the America Farm Bureau Federation, and joining us from Davis, Calif. is Richard Howitt. He's professor of agricultural and resource economics at the University of California Davis and lead author of a new drought impact study from UC Davis.

  • 10:14:48

    REHMSo, Richard Howitt, do you think that for this year, most crops will get through, the ones that, you know, we've been talking about, the fruits, the vegetables, things that people all over the country are really concerned about and are not happy about paying higher and higher prices for?

  • 10:15:17

    HOWITTYes. I agree with what Alan and Veronica said inasmuch that the cuts that we're predicting are coming in those crops which are lower value per unit water, and they are taking serious cuts. But a lot of them can be substituted by production from the Midwest which is up this year, and prices are somewhat down, so not to forget our livestock industry in California, which is really important.

  • 10:15:46

    HOWITTIt's a $10 billion industry. And of that, the dairy producers will take a small hit in terms of the prices of alfalfa hay have gone up by about 40, 50 percent. But the corn, which comes from the Midwest, is cheaper. The people who have really hurt are the guys who are running cattle on range. They got hit because they got no pasture to speak of or very poor quality this fall. And then they're faced with increasing feed costs of hay to keep their herds alive, so they're selling off their herds substantially.

  • 10:16:24

    REHMI wonder, Richard Howitt, if you can give us any forecast as to how long you believe this drought could continue.

  • 10:16:37

    HOWITTThe interesting thing is that my colleague, Jay Lund, here at Davis has analyzed the statistics, and the probability of having another dry or drought year following this one is about 36 percent. That is, the probability of a second dry year is higher when you're in a dry year. And the other thing that comes out is that there's been a lot of talk about how El Nino is -- the pattern in the Pacific is going to change. In actual fact, the statistics don't really bear it out in terms of water that can be used for irrigation, so the chances are -- it's almost a 40 percent chance that we're going to have a bad year next year, not as bad as this one, but certainly a bad year.

  • 10:17:24

    REHMAnd when you say a bad year and you say perhaps not as bad as this one but nevertheless moving from three into four years, would that mean more land laying fallow?

  • 10:17:45

    HOWITTAbsolutely. I predict slightly lower acres than Veronica does, but we'll find out who's right in the end. But if we look at next year, a number of these water districts have done very careful planning for one drought, and they're running -- they've got reserves set by to get through this year. But two things are happening. One is those surface reserves will be gone. And, secondly, we've run through some engineering models, and we can see that the water levels are dropping which means some wells will go dry.

  • 10:18:19

    REHMRichard. All right. Richard Howitt, professor of agriculture and resource economics at the University of California at Davis. Short break here. We'll talk further, take your calls and emails when we come back. Short break, right back.

  • 10:19:59

    REHMAnd welcome back. We're talking about the ongoing drought in California which one of our guests, Richard Howitt, and perhaps all of our guests expect may well continue into another year. Veronica Nigh, do you agree with Dr. Howitt?

  • 10:20:22

    NIGHI'm certainly not a meteorologist, but all indications are that certainly the models that they've relied on are accurate. And, you know, multiyear droughts in California are not unusual. We've seen -- in fact, more of the time when droughts occur in California, it's a three- to six-year drought period.

  • 10:20:41

    REHMBut does this one seem particularly bad?

  • 10:20:47

    NIGHThis one does seem to be particularly bad given the amount of rainfall that hasn't fallen. I think Dr. Howitt earlier mentioned it was the third driest year in 106 years.

  • 10:20:56

    REHMExactly. Exactly.

  • 10:20:58

    NIGHSo it's certainly a drought of significant magnitude.

  • 10:21:01

    REHMAlan Bjerga, I know you've spoken with dairy and other farmers who are in the thick of this. How are they coping?

  • 10:21:11

    BJERGAWell, a little bit of personal disclosure on this first of all. I actually grew up on a farm in Minnesota. And we didn't have dairy cows, but we were surrounded by them. And that's an important perspective because dairy's done differently in California than it is in the rest of the country. You have very large operations, and you have to -- as, you know, Veronica and Dr. Howitt were both talking about, you have to import some of your feed supplies, especially in a year like this.

  • 10:21:33

    BJERGAYou'd bring it in from the Midwest as opposed to the Midwest where you have enough feed supply. In California, though, what you have is proximity to major markets. You've got big population centers all over the West Coast. And increasingly you have global markets. A lot of exports to Asia are really going up because you see rising standards of living. They want protein. They want dairy. So there's more consumption over there.

  • 10:21:53

    BJERGASo I talked to these dairy farmers in California, and I asked, if you don't have this water and your feed becomes expensive, how can you sustain your operation? They say, well, we're getting a really good price right now. And our input costs are high. But we can also still make a profit off of this because we're near the markets, and we're near the shipping terminals. And that's a factor too, as well as the environment. But they're thinking about the marketplace.

  • 10:22:15

    REHMInteresting. Prof. Howitt, we've just gotten en email from Kim in Tulsa, Okla. who says, "Why are we not building pipelines across the country for desalinized water to drought-stricken areas instead of oil pipelines?" What's your thought about first desalinization?

  • 10:22:43

    HOWITTDesalinization is really expensive. It's linked currently with the current technology in this -- being new breakthroughs, it's linked to energy, and you have to get rid of saltwater. One of the telling characteristics about desal is that in their last major drought, Australia built six desal plants for city supplies. Four of them are not running currently. It's not worth actually turning them on. And so it's a very specialized, very expensive form of getting water suitable for cities, but certainly you cannot justify with the current technology desal water for agriculture.

  • 10:23:29

    REHMWhat do you think about that, Veronica?

  • 10:23:33

    NIGHWell, certainly when it's -- farmers are business people first and foremost. And the value of the water and the amount that they're willing to pay for desalinized water, excuse me, is only -- is going to be linked very closely to the amount that they can get for their crops. So there's certainly a break-off point where it's no longer economically viable for them to -- even though their whole livelihood is intertwined with producing a crop, if it costs too much for the inputs, they're simply not going to produce the product.

  • 10:24:09

    REHMAlan, now what measures are farmers taking to conserve water consumption?

  • 10:24:17

    BJERGAWell, what you've seen a lot in recent years is a lot of use of non-potable water. You know, there are a lot of farmers who would be using drinking quality water taken from reservoirs, especially ones near urban areas. Now you see basically recycled water. It doesn't have to be drank by human being or even an animal, but you can put it on a field. So that's one conservation measure. You're also seeing changes in technology, drip irrigation. You know, getting back to the example of Israel, you were talking about desalinization. Another thing that's done is very precise irrigation technology.

  • 10:24:47

    BJERGAAnd that lowers the amount of water that farmers are using. Now, you'll see people in cities still complaining about agricultural use, wondering why all these water intense -- relatively intense almond trees are growing up when maybe you could be having lower water fruits and vegetables. But, again, that gets to the marketplace value added argument. And the farmers are basically trying to be as good a conservationists as they can while still watching their bottom lines.

  • 10:25:09

    REHMAnd what about ordinary residents? What are they doing to conserve?

  • 10:25:16

    BJERGAWell, according to California officials, apparently not enough. When you're looking at some of the projections of, you know, voluntary programs to reduce 20 percent or thoughts of 5 percent -- and you just saw that study that said the increase has actually gone up 1 percent -- you certainly -- I guess -- I mean, once again, Dr. Howitt would know this better because he's in California. But I'm hearing that brown lawns are a status symbol, but it doesn't sound like everybody's following them.

  • 10:25:39

    REHMWhat about that, Richard Howitt?

  • 10:25:42

    HOWITTWell, I have to say that on the long-term record, the urban users have been doing a really good job of conservation. If you look at the total L.A. basin, for instance, where a lot of our urban population live, they've grown substantially over the last 10 years. And their water level has stayed constant. And so conservation is a slow thing. If I'm going to rip out my lawn and put in what we call xeriscape, which would be a really low natural native plant system, it just takes time.

  • 10:26:18

    HOWITTAnd you'll now walk through the suburbs, and you'll see varying levels of dryness. So I think the urbans actually are doing a really good job. And I'd like to stress that, in agriculture, you've got to be very careful about looking at conservation as the key because, if you're not careful, the water that you conserve on the service is stuff that is taken away from the depercolation to the underground water.

  • 10:26:48

    REHMYeah, that's what I would worry about is if you keep having to draw on the water from underground. Where does that leave you eventually, Richard Howitt, if the drought continues?

  • 10:27:06

    HOWITTThis leaves us, Diane, with dropping groundwater levels.

  • 10:27:09

    REHMExactly.

  • 10:27:10

    HOWITTOn a personal note, I got off the plane last night. My wife told me -- I live in the country out here in California. My wife told me that one of our neighbors' wells had gone dry. And that's what...

  • 10:27:23

    REHMYikes.

  • 10:27:24

    HOWITT...we're living with.

  • 10:27:25

    REHMYeah.

  • 10:27:26

    HOWITTAnd the farmers, of course, are making their livelihood from this. And we project that, in some areas, up to 10 percent of the wells could go dry next year if we don't have a wet year.

  • 10:27:40

    REHMWhat would that mean if 10 percent of the wells went dry? How -- what other source do you have for water, Richard Howitt?

  • 10:27:55

    HOWITTA lot of people just don't have another source. And so your crops dry up, your trees dry up, and you have to start from scratch when the rain comes back. This is an unacceptable risk that people take. And so one of the things we've got to do -- and we haven't done yet -- is to treat our underground water the way we would treat a retirement account. We've got to conserve it for the future.

  • 10:28:22

    REHMI gather that some neighbors are actually reporting on other neighbors if they see something like sprinklers going, Alan.

  • 10:28:35

    BJERGAWell, and you have to wonder if there's a better way to go about doing this. You know, when people have to start becoming citizen police for water, you wonder if there's a more sensible solution that can be made. And one of the issues is that the regulatory structure in California has just sort of evolved over generations of political decisions. And so, from one water district to the next water district, you're going to have different rules, different ideas as far as what the priority is between farms and cities. It's a very difficult Gordian Knot to cut through.

  • 10:29:03

    REHMAnd, Veronica, you wanted to add something.

  • 10:29:06

    NIGHSure. I'd add that, you know, with increasing population and the increased food necessary to feed that increasing population, all signs point to the fact that water is going to be one of the limiting resources into the future as far as our ability to feed ourselves. So we really need to think long term about how we deal with water constraints when there's drought. But also, how do we prepare into the future when we have adequate and excess water supplies? How do we build structures and plan for the future so that we can use those reserves in times of drought?

  • 10:29:42

    REHMRichard Howitt, can you answer that question?

  • 10:29:46

    HOWITTI think the key in California, step one, is to get underground water under control, a management. Right now, there is no way of measuring who pumps what. And therefore this is like somebody walking around who's so wealthy they don't even have to balance their checkbook. And so what do we do? We draw it down. Everybody does the normal thing.

  • 10:30:12

    HOWITTIn other parts of the west -- and I have to admit that California's behind other parts of the west here -- we've got groundwater measurement. And so people can allocate their fair share of groundwater. And if you want to pump more, you have to pay to replace it. Right now, you don't have to pay to replace it.

  • 10:30:32

    REHMInteresting.

  • 10:30:34

    BJERGAIt is interesting. And now we're getting into the realm of politics and public policy decisions. And farm interests are very strong in the State of California. They have business and livelihoods to protect, but while they may have some resources economically and in terms of the power of the business, the numbers aren't necessarily there. The numbers are in the cities. So how do we resolve this? It's a limit resource. It's going to be a tough bite.

  • 10:30:55

    REHMAll right. Let's open the phones, 800-433-8850, first to Michelle in St. Louis, Mo. You're on the air.

  • 10:31:09

    MICHELLEHi. Thank you for taking my call, Diane.

  • 10:31:10

    REHMSurely.

  • 10:31:12

    MICHELLEI'm just so baffled that we as citizens having come to the point where we're sharing what we have. Here in Missouri, we're going through an overabundance of water. We've been getting rain and rain and rain, so the water levels are, you know, cresting. And people are sandbagging. Why aren't we, as a society, bringing out barrels so that this overabundance of water can be shipped to other states that don't have it?

  • 10:31:47

    REHMThat's such a good question. Richard Howitt, what about water sharing?

  • 10:31:55

    HOWITTThe problem is it's costly. You -- there's two problems. One is political. If you go into any basin and say, oh gee, you know, I think California would like to take Oregon's water, you've got a firestorm on your hands. Second problem, it's really not -- doesn't pencil out. Water is still incredibly cheap per pound. I can't give you the exact number, but it's a few fractions of a cent per pound. So per ton, it's a few cents. Secondly, you just cannot move that between mountain ranges except in great expense, which we've done partially in California. So it's still really cheap, and it's really heavy. And it's really hard politically to move.

  • 10:32:42

    REHMAnd you're listening to "The Diane Rehm Show." I know you wanted to add something, Alan.

  • 10:32:49

    BJERGAJust a note that if you're looking at it from an economic standpoint, it's great. Conceptually, everybody wants to share. But when you only have so much of this resource that's economical, people fight when they share, too.

  • 10:33:03

    REHMAnd talk about the political elements there.

  • 10:33:08

    BJERGAWell, it's a scarce resource. You have various levels of government, from water resources boards to governors, state legislators and such. This doesn't just happen in California. I used to cover the Kansas congressional delegation. And them and Colorado have some interesting struggles going back a generation, a century, in terms of fights.

  • 10:33:29

    BJERGAAnd this is going to be happening all over the country when you see the Ogallala aquifer on the Great Plains being depleted. You see issues cropping up in the southeast in Texas. We had the Corn Belt drought two years ago. Water resources are a big deal because people want to be fed. But they have a lot of other needs, too. And making it all work together is tough.

  • 10:33:46

    REHMAll right. Let's go to Barbara in Ft. Lauderdale, Fla. You're on the air.

  • 10:33:54

    BARBARAThank you, Diane. I have a question regarding fracking, which requires a huge amount of water. And as far as I know, there's no regulation restricting that, yet citizens are restricted for the water to water their lawn, et cetera. As far as I know Gov. Brown has not addressed that problem regarding fracking.

  • 10:34:20

    REHMHow much fracking is going on in California, Richard Howitt?

  • 10:34:26

    HOWITTThere's been a small amount of fracking going on for years in California because we have old oil wells. There is a big potential. We have the Monterey Shale which I've seen estimates as high as 60 percent of the national. But it hasn't been developed very much yet because California is struggling with putting on proper recycling regulations so that the water for fracking has to be recycled. And there is some situations where the fracking water that's currently being used is recycled to farmers.

  • 10:35:02

    HOWITTSecondly, we also want to know exactly what's in the fracking fluid so they don't contaminate the water. So what we're doing here is we're trying to be a little slower, and that might be partially due to the price of natural gas is so low, in implementing fracking and implementing in a way that it will not either rip off our existing agriculture water supplies or contaminate them.

  • 10:35:31

    REHMAll right. To Alice in Amherst, N.H. Hi, you're on the air.

  • 10:35:38

    ALICEHi, Diane. I just want you to know I listen to your show every day at work...

  • 10:35:43

    REHMThank you.

  • 10:35:44

    ALICE...when I can. But my question is, is there a scientific reason for all this going on right now? I was wondering if the scientists know. I have two questions, Diane, or two statements to make. I do know that we have blown holes in the moon to see if there was water up there. America has done that. And I also knew or know that China has been putting mirrors up into space to change the sun's rays to different areas. Now all of these things, do they have some cause or, you know, is there a reason for all of this going on? And I'm just curious and I'm very upset about it all, too, of course, like everybody else is. And I'll take the rest on the...

  • 10:36:31

    REHMAll right. Thanks for calling. I must say I've not heard about China putting mirrors...

  • 10:36:38

    BJERGAYeah, that is something that I've seen discussed as a potential concept from a lot of different countries as a way to deal with, you know, water issues and changing climate, you know, sort of a larger thought game exercise being made. But if you're looking for reasons -- you know, one word that -- phrase that has not come up here yet is climate change.

  • 10:36:59

    BJERGAAnd this becomes part of the climate change debate because if you subscribe to the climate change thesis that more volatile weather, hotter, drier summers are going to be happening and you start piecing together the California droughts, the Midwest drought in 2012, some other disturbances in terms of the record summers that we've been having, that is something that becomes part of this debate when you look at what's happening in the state.

  • 10:37:21

    REHMAlan Bjerga, he's a reporter for Bloomberg News focused on agricultural policy and commodities. More of your calls, your email when we come back. Stay with us.

  • 10:39:58

    REHMAnd welcome back. We have lots of callers, lots of emails. I'll try to get to as many as I can. Veronica, I wanted to ask you first about the issue of cost and whether, for example, with almonds and other produce, we're likely to see an increase in cost.

  • 10:40:23

    NIGHCertainly that's what we all think of when we hear about a disaster like this going on. What's the impact to me? What's the increase in prices that I'm going to pay? And I think agriculture and drought as a disaster that happens in agriculture is really interesting. Because drought is really a slow-moving disaster, it's not a light switch activity that just happens one day. Folks see a drought happening. It gets worse and worse over time. And they react to that.

  • 10:40:49

    NIGHSo growers in California will change what crops they grow in what areas. They'll conserve water to the highest-value crops. But then you also look at other states in the U.S. and farmers in those other areas, and they see those market signals happening. So they grow additional crops in order to help supplement the loss in California and places that are experiencing environmental issues.

  • 10:41:13

    NIGHBut then you have to look outside of the U.S., too. And look at the ability for other countries to help supply those decreases in crops. So, in all likelihood, what you're going to see is a mix this year of farmers in other areas providing more crops to help supplement. And you're going to see an increase in imports.

  • 10:41:32

    REHMInteresting. Imports from -- for example?

  • 10:41:36

    NIGHCentral America, South America, all over the world. So while it's incredibly devastating for those farmers who are in the areas that the drought is occurring, they can't pick up and move their farm to react to that.

  • 10:41:48

    REHMRight.

  • 10:41:49

    NIGHBut farmers in other areas will take that, you know, where one loses, the other gains. And so, on a national level, you don't see the increases in prices that folks might originally anticipate with such a large disaster.

  • 10:42:03

    REHMAlan?

  • 10:42:04

    BJERGABut that's not to say that the consumer's not going to feel any pinch whatsoever. I mean, when we say that prices are not going to be as bad as we feared, that basically means that we're not going to have a drought Armageddon here. You're still looking at a USDA projection of food inflation for fresh fruits and vegetables of five to 6 percent this year.

  • 10:42:21

    REHMWow.

  • 10:42:22

    BJERGAAnd that's about three times the pace of general inflation. So is this Jimmy Carter stagflation-era double digit stuff? No, it's not. But, I mean, consumers are going to notice this. And, as Veronica was saying, there will be a market response/supply response, but that's going to take a couple, three years. You know, if China wants to do something about global demand and they want more almonds, you know, before they're shooting things up into the sky and to the stars, they're probably going to grow more almond trees so that California isn't responsible for four-fifths of the world's supply.

  • 10:42:49

    REHMRichard, how -- what about farmers -- other farmers in other parts of the country picking up on these crops, moving the production of, say, almonds, avocadoes? I realize the temperatures in California are such, but surely it's going to come to moving to other parts of the country as well.

  • 10:43:19

    HOWITTWell, the good news for California is that we have a unique -- and I say unique -- Mediterranean climate in the U.S. There's very few other places in the world that can grow almonds as well as we can or anywhere near possible because you need cold winters and warm, dry summers. And therefore, unless you go to Iran, Spain, that Mediterranean belt that runs around the country -- and parts of Australia -- you just cannot get -- almonds will grow, but they won't make money.

  • 10:43:51

    HOWITTAnd that goes on with a number of other crops. We have a combination of climate of the cold winters and the really hot summers -- if you have the water -- that is unique. And therefore, in some ways, we're climatologically protected from competition in these really high-value crops. But there are other crops that we specialize in that can be grown very well elsewhere, citrus and other fruits, apples, cherries, and those which are dominant in the Midwest, too.

  • 10:44:27

    REHMAll right. Let's go to B.J. in Rockford, Ill. Hi, you're on the air.

  • 10:44:35

    B.J.Good morning, Diane and panel.

  • 10:44:36

    REHMHi.

  • 10:44:37

    B.J.I'm wondering, are we asking the right question? Because we can water crops, does that mean we should? Recently I heard a climate specialist say the last 100 years in California had been unusually wet. Is it time to start thinking of moving the crops to other parts of the country, regardless of the proximity of overseas markets? And I'll take the answer off the air. Thank you.

  • 10:45:04

    REHMAll right. Thanks for calling. Richard Howitt?

  • 10:45:08

    HOWITTI don't think they're going to move. I'm all in favor of market sources and if they could be grown better elsewhere, that would happen regardless. It's not going to happen because of the climate. The other thing is despite global change -- and that affects our water storage in the mountains -- we have run some scenarios, and it shows that we're in business of producing these crops for the long haul.

  • 10:45:36

    HOWITTI'm talking 50, 100 years. We can take a 20 percent reduction in water supply and still grow a high-value agriculture. We'll cut back, as Veronica and Alan said. We'll cut back on some of the other crops and specialize in those high-value crops.

  • 10:45:57

    REHMBut I gather, Richard, your study points to what you called pockets of poverty and pain resulting from the drought. Talk about what you mean there.

  • 10:46:12

    HOWITTWe estimate that it's going to get up to 17,000 low-income jobs lost due to this drought. These are field workers, packing-house workers, transportation workers who are associated with products like melons and lettuce and broccoli which are going to shift. And so the crop shifts, but the workers do not have the wherewithal necessarily to shift. And so we are going to get these pockets of real difficulty.

  • 10:46:47

    HOWITTAnd we're -- one of the reasons why we did this study was to focus our state resources in these areas. And so we've got emergency housing. Already we've got food banks running in these places. And we've located them where we predict the unemployment will be.

  • 10:47:06

    REHMAlan, I know that yesterday you interviewed Tom Vilsack, the secretary of agriculture. How much of a priority is he making this right now?

  • 10:47:23

    BJERGAWell, Secretary Vilsack is actually going to Fresno tomorrow. And he's going to be talking about some assistance programs that the USDA can make available to producers. This isn't going to be a big disaster bailout situation, like what you saw with farmers in the Midwest maybe in previous decades. Again, the crops really aren't that bad at the moment. And the profitability remains to be there. But especially as you look at these periods of extended dryness and questions of groundwater, you really have to be prepared for the worst.

  • 10:47:51

    BJERGAThis spring, the USDA was preparing for the worst. It turns out that this year wasn't that. But until the rain comes, you have to be vigilant about these things. So I know it's a top priority at the Department. And that was something that Secretary Vilsack was underscoring yesterday.

  • 10:48:03

    REHMAll right. Let's go to Lawrence in Miami, Fla. You're on the air.

  • 10:48:11

    LAWRENCEThank you, Diane. Thank you very much for your show and your panel this morning. I just want to make a comment about our -- as our customers, what we buy and the way we live. Because when you take one gallon of milk, it needs 1,000 of water to produce. And to have one -- two pounds of meat, you actually need, like, 3,000 gallons of water to produce it. So if us, as a customer, we choose other products and look (unintelligible) product, we might help with the drought and the way water is used nationwide. Thank you very much.

  • 10:48:44

    REHMDo you see people turning more and more to vegetarianism? What do you think, Alan?

  • 10:48:53

    BJERGAI think the caller makes an interesting point. That, from a theoretical point of view, is a way that you could make a difference. I mean, supply and demand. If you started eating lower water crops, indeed, you would shift the food market. That would be where the demand and the value would go. You would stop eating almonds. You would start eating more vine crops. And water use would go down. Are people really paying attention to that? If you take a look at marketplace responses, I think that's one of the last things that's on people's minds.

  • 10:49:18

    REHMWhat do you think, Veronica?

  • 10:49:19

    NIGHWell, I'd also say that U.S. agriculture is very much engaged in international trade. And at this point, about 30 percent of all U.S. crop value is exported. So while U.S. consumers may be thinking about those limitations on the natural resources in the U.S., we also have to think about the fact that we're exporting a lot of our product.

  • 10:49:43

    NIGHAnd, you know, folks who are buying U.S. dairy products or U.S. meat products around the world, they're thinking about their own diet, not necessarily about U.S. resource constraints. So it is an interesting point and certainly something that folks think about. But in practice, I'm not sure if it matches up with the theory.

  • 10:50:06

    REHMAll right. And to Rich who's in South Bend, Ind., hi there. You're on the air.

  • 10:50:15

    RICHHi. In all the discussions and news articles I've seen about the water supply in California being so low, I have never heard anybody discuss the largest user or waster of water as being golf courses. I've heard they use anywhere between one and 3 million gallons a day per course. That seems that it could go a long way in the farming community.

  • 10:50:38

    REHMHow many golf courses are there, Richard Howitt? Can you talk about that?

  • 10:50:44

    HOWITTI don't know, but I'm sure there are thousands and thousands of golf courses, particularly in the South. But as an economist, I have to put my cold, hard heart economist hat on and say golf courses are really important to people who play golf. And they pay for it. And they enjoy it. And so -- I'm not a golfer, so I wouldn't know quite the difference between a dry golf course and -- I know in the previous droughts, golf courses have economized significantly by, one, recycling some water and, two, cutting back on what I understand to be the fairways and just concentrating to have the greens green.

  • 10:51:28

    HOWITTSo I see golf courses like I see car washes. It's something that people want. It's part of their life. It's important to them. They're prepared to pay for it. Let's just make sure they run efficiently.

  • 10:51:41

    REHMAlan?

  • 10:51:41

    BJERGAIt really does come down to, what do you value? If a person decided that they would rather, you know, play golf and slowly die of, you know, thirst, then I guess they'll die happy on the greens. If you want to feed the world, then you need a certain amount of water to do that. If you want to water your lawn or live in Los Angeles, you need water for that.

  • 10:52:01

    REHMBut how much restriction is the governor placing on use of water, say, for golf courses?

  • 10:52:09

    BJERGAWell, Dr. Howitt may know more of that with the local perspective than I am, but what you're certainly seeing is an attempt to, you know, regulate a behavior. And now that you have the introduction of fines for people who may be using excesses of water -- a lot of these programs still, though, remain voluntary. It's people working out of the goodness of their hearts. And I guess then your value is civic responsibility. We'll see how well it works.

  • 10:52:29

    REHMAnd you're listening to "The Diane Rehm Show." Let's go now to Jody in Margate, Fla. Hi. You're on the air.

  • 10:52:41

    JODYHi, Diane. Hi, panel. This has to do with pipelines. Instead of desalinization, instead of trucking everything in, why not have the pipelines come from the flooded areas, like Lake Miami, and -- I know it's going to take years, but you'll put people to work -- and have it pipelined all through to the drought areas?

  • 10:53:14

    REHMRichard Howitt, what do you think of that idea?

  • 10:53:17

    HOWITTIt's just, again, it's just too expensive to pipeline this water. We actually move water 650 miles in California, down through our system, from north to south, from where it's plentiful. And if you compare the cost of putting a pipeline, say, from Oregon, where they have lots of water, you just -- the costs are so high, it's just not worth doing. And a number of countries have looked at it, and they've come to the same conclusions. And then I would emphasize also that water is a local resource about which people have very strong feelings. And one of the things they have strong feelings about is it going somewhere else.

  • 10:53:57

    REHMYou know, it's fascinating because, for years, there's been talk that water is going to become the new gold. Are we on the verge of that, Alan?

  • 10:54:11

    BJERGAI think in some instances like this you certainly can see that phenomenon developing, but overall you still see a lot of management that's maintaining adequate supplies -- at least speaking from the United States, Northern Hemisphere's standpoint. Some regions of the world are much more taxed than others. If you take a look at, you know, Nile River Treaties in East Africa, for example, there's some brutal, sometime literal, warfare that breaks out over that.

  • 10:54:35

    BJERGAAs far as scarcity, we're at 7 billion people. We're going to be at 9 billion by 2050. This is only going to intensify. These are important experiences to think about and talk about because there's lessons to be learned. Even if we can get through this year with a decent crop, next year is not assured.

  • 10:54:50

    REHMRichard Howitt, what do you think? Is water eventually going to become the new gold?

  • 10:54:58

    HOWITTI wouldn't say it's going to become the new gold because, I mean, the values are totally different. But it's got to increase in price substantially. We saw something interesting this year that, in 2009, the maximum price I heard paid for water was about $450 for this unit called acre foot. This year, when it went on sale, the price rocketed over $1,000. So it went up by -- and some went up as high as $1,800 to $2,000. So we've seen a tripling of the cash value that farmers -- and this is not water going from farm to the cities. It's going between farms. We've seen a tripling of the price under this drought.

  • 10:55:46

    REHMAnd one last question from Lauren. She says, "What about alternative methods of farming, growing vertically, in a controlled environment that can recirculate water?" Veronica?

  • 10:56:03

    NIGHWell, that works fairly well for certain commodities, but it doesn't work well for all. It's hard to imagine growing -- since we've talked a lot about almonds today, it's hard to imagine growing an almond in a vertical -- almond tree in a vertical environment. But farmers have certainly been -- have recognized what a scarce resource water is, and they've invested in trying to make the most out of what they have.

  • 10:56:27

    NIGHI'll give you an example. Over the last 10 years -- we've talked a little bit about drip irrigation. In 2002, the number of acres using drip irrigation was only 14 percent. And by 2012, that increased to 58 percent. Even though it cost farmers $1,000 per acre to install that water-saving type of irrigation, they've done it.

  • 10:56:49

    REHMWell, clearly this is an ongoing issue. Veronica Nigh, Alan Bjerga, and Richard Howitt, thank you so much for joining us today. And thanks for listening, all. I'm Diane Rehm.

  • 10:57:07

    ANNOUNCER"The Diane Rehm Show" is produced by Sandra Pinkard, Denise Couture, Susan Casey Nabors, Rebecca Kaufman, Lisa Dunn, Danielle Knight, and Alison Brody. The engineer is Toby Schreiner. Natalie Yuravlivker answers the phones. Visit drshow.org for audio archives, transcripts and podcasts. Call 202-885-1200 for more information.

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