You say potato, I say electricity
Should western water flow to spud farmers or to
hydroelectric
dams?
The Economist (U.K) - 7/14/01
MOUNTAIN HOME, IDAHO - Idaho potatoes blend
21st-century technology with 19th-century political
muscle. The technology makes Idaho's potato-growers
among the most productive farmers in the world; in
August, from a mere 400,000 acres, they will pull 20
billion
pounds (9 billion kilos) of potatoes. That is up from
12 billion pounds 20 years ago. It is 30% of the total
American output, and enough to give 3 lb of spuds to
every human being on the planet.
Unfortunately, people do not want that many potatoes.
So Idaho
farmers have a problem. Across southern Idaho and the
eastern
portions of Oregon and Washington state, 4.8 billion
pounds of
potatoes sit in warehouses, virtually worthless.
Farmers can
expect
to get little more than $2 for a 100 lb bag that costs
perhaps
$4 to
produce.
Potatoes, no matter how unprofitable, need water for
irrigation
and
for processing into the french fries that sit next to
Big Macs
worldwide. Water has been contentious in Idaho ever
since
fist-fights
broke out along the first irrigation ditches more than
100 years
ago.
Nowadays, the potato farmers' water is protected by an
intricate
dam
of law and tradition that shields longstanding water
users and
has
its own strange rules about how water is used, often
in direct
contravention of both economic and environmental good
sense.
A farmer, for instance, can give up using his water
for a year
or
two. But, if that becomes five years, he has to
surrender the
rights
to the water. And much of the water is provided at
rates well
below
market value. Rather than conserving water, there is
thus a
powerful
incentive to keep using it regardless of whether the
crop that
uses
it has any value. "This is an ingrained, legally
protected
pathology," says Ray Huffaker, an expert on water law
at
Washington
State University in the farming-country town of
Pullman. The
argument
about whether the West's economy would be better
served by
transferring water from farmers who create little
value to
cities
that create a lot (and are prepared to pay for the
water) is an
old
one. And by the absurd standards of western
agriculture - e.g.
the
miracle that allows Californian farmers to grow
alfalfa and rice
in a
near-desert - Idaho's potato farmers are not
particular
transgressors. But this year they are in the firing
line.
One reason is that this summer may be the West's
driest in 50
years.
The other is to do with electricity and geography. The
potato
farmers
draw their water from rivers like the Columbia and the
Snake,
whose
dams (lower down-river) supply much of the West's
hydroelectric
power. This year, with consumers in many western
states facing
power
cuts, that water, and the electricity it produces, are
desperately
needed.
Other troubled industries have already turned the
power crisis
to
their advantage. Aluminum producers, for instance,
have cut
production in order to sell electrical power that is
too
valuable to
use for smelting aluminum. But the idea of selling
their water
to the
power companies meets stony resistance from the potato
farmers.
It is not just that they are being difficult. Water is
fiendishly
difficult to manage. It is a "fugitive" resource,
meaning it has
a
tendency to wander away - unlike, say, a stand of
trees. And
water
use has a domino effect: draw water from a stream, and
landowners 100
miles downstream feel the impact. Then there is the
huge capital
investment in the canal systems, farm equipment and
processing
plants
that have grown up around the potato industry.
There is a human side, too. Take Mike Wing, a
39-year-old farmer
who
lives with his family near Mountain Home, Idaho.
He has been a farmer for 11 years, growing potatoes,
alfalfa and
sugar beet on his 5,600-acre spread. A passer-by might
think Mr.
Wing
is doing fine. There is new equipment on the
well-tended
property.
Mr. Wing pumps around $3m a year into running the
farm. But his
return is maybe $100,000 in a good year. "Not many
investors
would
stand for that," he admits. He holds on so that he can
be his
own
boss, and work the land.
This year, though, Mr. Wing is not farming. Idaho
Power is
paying him
to do nothing. The water not used to water Mr. Wing's
crops is
generating power, and the farmer is earning enough
from the deal
to
take a year off, studying at nearby Boise State
University. Next
year
he plans to be farming at full speed again, partly in
order to
preserve his water rights.
This is a long way from the sort of water trading that
most
economists recommend. Mr. Huffaker suggests a
"contingent
market", in
which farmers sign contracts with power generators or
other
water
users to sell a fixed amount of their water rights
during
low-flow
years. In doing so, they would not abandon their water
rights;
but it
would make trading easier.
At the moment, such ideas draw frosty looks. Yet the
fact that
they
can be heard at all shows that the water-rights system
is
creaking.
In southern Oregon farmers have been cut off from 80%
of the
water
they normally receive in order to protect migrating
salmon,
which get
federal protection. Farmers are appalled that voters
should
favor a
fish's sex life over their future. Still, if Americans
decide
they
prefer fishing or inexpensive power to cheap French
fries, there
should surely be a market to let them make the choice.#
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