MENDOTA, Calif. -- Dwindling water supplies are compounding economic woes in California's Central Valley, causing farmers to leave fields fallow and confront the prospect of going under. The state's water supply has dropped precipitously of late. California is locked in the third year of one of its worst droughts on record, with reservoirs holding as little as 22% of capacity. On top of that, a federal judge in Fresno last year issued a ruling in an environmental lawsuit that could restrict diversions to farmers by as much as one-third, as part of an effort to save an endangered minnow, the Delta Smelt.
The cutbacks hit big and small farmers in California's $20-billion-a-year agriculture industry. At the Harris Farms near Coalinga, managers said they plan this year to sideline 9,000 of 11,000 acres they used to plant with tomatoes, onions, broccoli and other vegetables. Harris has been reducing production for two years because of declining water, and now must cut even more than planned. "You feel like a general in a battle," said John Harris, chairman and chief executive of the business. "You're in constant retreat."
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Some farmers are trying to cope by drilling new wells to tap underground water supplies. But those are on the decline, too, and the wells are costly. Near Mendota, farmer Bill Diedrich said one of his neighbors spent $130,000 to drill down 1,700 feet, but didn't hit water and had to refill the hole. Mr. Diedrich's nephew, Todd Diedrich, is letting 1,000 acres of his family's 1,500-acre farm go fallow this year to concentrate scarce water. But he faces a predicament shared by many other farmers: He still has to pay down a $210,000 note for a tomato harvester he and his father, Jim, bought recently and a $700,000 note for a drip-irrigation system they put in two years ago. "Ironically, we put in that system to conserve water," said 39-year-old Todd Diedrich.
If the water situation doesn't ease soon, industry experts expect numerous farmers to go out of business in a year or so. Particularly vulnerable are farmers who have loans tied to being able to secure water supplies, said Richard Howitt, a professor of agriculture economics at the University of California at Davis. In essence, these farmers use their water rights as collateral for loans that go toward crops and equipment.
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