Pacific Institute Responds to Misleading Commentary by Wayne Lusvardi

On Friday February 25th, the Sacramento Bee published an opinion essay by Pacific Institute President Dr. Peter H. Gleick on the pending renewal of heavily subsidized federal contracts associated with the Central Valley Project in California.

On February 28th, a criticism of this essay was posted by Wayne Lusvardi, who describes himself as a libertarian and former employee of the Metropolitan Water District of Southern California.

Although we welcome criticism and open debate, Lusvardi’s attack against our essay is characterized by intentional distortions, simple errors, misquotations, misleading logic, and ad hominem attacks.

Ironically, Mr. Lusvardi has in the past gone on record criticizing “government-subsidized water” that allows “farmers to grow rice, cotton, alfalfa and other water-hungry corps that suck up 75 percent of raw water supplies.” In a piece published by the Reason Public Policy Institute Lusvardi says “the most promising solution to the long-term water crisis in California is full-cost pricing” (see “Watering the West” in Volume 28, No. 2 of Privatization Watch of the Reason Public Policy Institute).

Below, we’ve reproduced the Lusvardi piece, with our responses in blue text.


Lusvardi Commentary [and Pacific Institute Response]:

California’s Water War Based on Flawed Images Cadillac Desert or Land Rover Environmentalism? California’s water war between Northern and Southern California is based on flawed images

Written by Wayne Lusvardi and posted to the ChronWatch website on February 28, 2005.

In 1986, Marc Reisner authored a popular book “Cadillac Desert” that mounted an environmental attack against the rice growing industry in California saying rice farmers were growing a “monsoon” crop in the middle of the desert with Federally-subsidized water. [Pacific Institute response: This is a simplistic and inaccurate description of Reisner’s remarkable book on California water history and politics. Regardless of what one thinks of Cadillac Desert, it has nothing to do with our essay and we do not reference it.]

A similar refrain has been recently issued by the Pacific Institute, an environmentalist water think tank in Oakland [the Institute is not an “environmentalist” [sic] group, but an independent, nonpartisan think-tank studying issues at the intersection of development, environment, and security], that has sent out an alarm in California newspapers that a “pending deal being cut behind closed doors, with little or no public input or scrutiny, would undermine California’s water solutions”. The Pacific Institute press release states that for some 50 years, Federal water subsidies have encouraged a small number of rice farmers to use huge quantities of water at the expense of the taxpayers and natural ecosystems. [Our opinion essay never mentions rice farmers, and we did not issue a press release.] 

About 2.2 million acre feet of water is used to grow rice each year in the Sacramento Bay Delta, which equates to about the same amount of water used by 10 million city dwellers in Los Angeles (an acre foot of water is football size field of water one foot high and supports about 2 families per year).

According to the Pacific Institute the original Federal water contracts are pending renewal which will cost the taxpayers a reported $500 million over the next 10 years. [This estimate came from the Congressional Budget Office, not the Pacific Institute, as noted in our essay.] The Institute report proceeds to tell us that 1,000 acre-feet of water produces 900 jobs in the semiconductor industry [Our analysis says that it produces nine thousand jobs in the semiconductor industry, not nine hundred], 2,500 jobs in commercial offices, 35 jobs in grape and wine production, but a mere three jobs growing cotton. We are told that cotton and alfalfa produce only $60 of gross state revenue per acre foot of water compared to $1 million in the semiconductor industry.

We must ask two questions about the above-cited Pacific Institute report. First, what if anything has been left out of the report? And secondly, is the image of California water politics as a Cadillac Desert accurate? [We say nothing about “a Cadillac Desert.” We focus here solely on unsustainable federal water subsidies.] 

What has been left out of the Pacific Institute press release is an awful lot. Firstly, the report fails to tell us that the water in the Sacramento Bay Delta, where most of the rice growing occurs, is not exclusively used for rice farming. [We don’t talk about rice at all. And most of the water subsidized by the Central Valley Project is used for other crops, much of it south of the Delta.] It is used for flood control, for cultivating other irrigated farm crops, as natural habitat for waterfowl and wildlife, for natural water purification, and for public recreation.[This sentence is illogical, and incorrect — how can water be used for flood control? — and also irrelevant to our essay, which talks about inappropriate federal subsidies to a small number of California growers, not about the Sacramento Bay Delta.] If farmers have to fallow land or rice paddies because of the ups and downs of the agricultural market, the water allocated to them remains unused. [We never discuss fallowing, just the removal of harmful subsidies, but the idea that any water not used by humans is “unused” is part of the problem with California water management today. This water has enormous ecological value and use, and if it were used more efficiently parts could be reallocated to other growers, the environment, and California’s urban centers.] 

According to the Audobon Society [Audubon] the rice fields of the Bay Delta are the home of some 40,000 birds. [This number is clearly wrong, but waterfowl populations were certainly much higher before most of the vast Central Valley wetlands were drained for agriculture. Over the past century, Central Valley wetlands area went from over 3 million acres to under 500,000, and waterfowl populations have dropped from over 100 million to under 10 million.] Rice paddies offer wetland habitat to huge number of ducks in a state that is always decrying that it is losing wetlands. [Is Lusvardi arguing that rice paddies are better wetland habitat than the original wetlands? We disagree. We applaud collaborative efforts between rice growers and environmentalists, such as the Ricelands Habitat Partnership, which we describe in our report Sustainable Use of Water: California Success Stories.] And rice paddies serve as natural water filtration systems to break down herbicides used by rice growers. Even Marc Reisner, the author of the book Cadillac Desert, eventually changed his mind about rice farming and called it one of the most “progressive” agricultural enterprises. [Ironically, herbicide contamination from rice farming declined only after regulatory efforts by the State of California provided incentives to farmers, but again this has nothing to do with our original opinion essay.] 

And the illogical notion that using water for rice farming takes more economically productive jobs from the semiconductor industry or commercial economy, as the Pacific Institute report contends, is nonsense. Halting water to rice growers or making them pay the urban retail price for the water won’t produce more semiconductor jobs or vice versa. [This is a cavalcade of deception: As noted earlier, we say nothing about rice farmers; we have never called for farmers to pay the urban retail price for water; and we never claim that farming takes more productive jobs from other sectors. The essay calls for an end to unsustainable federal water subsidies and raises the point that modest reallocations of water could be tremendously beneficial for the State’s economy.] 

We must then ask if all this is so why the Pacific Institute would claim otherwise. What the Pacific Institute left out was that in 2003 irrigation districts in the Sacramento Valley began signing contracts to sell surplus water to the Metropolitan Water District of Southern California. Farmers in the Sacramento Valley say the water sales offer them a safety net if there is a price collapse in the volatile agricultural market. So instead of buying crop insurance, central California farmers can sell their water in a down market to Southern California. This is a win/win deal, not a win/lose deal for Northern and Southern California. [Why should U.S. and California taxpayers give water that Lusvardi admits is “surplus,” and unneeded by farmers, away at hugely subsidized prices to farmers so they can resell it to cities? In fact, the law says only water that is beneficially used can be given to farmers. If it is surplus, the State should allocate it where it is truly needed.]

Environmentalists are suspicious that selling water would provide an incentive for drawing an extra allocation of water merely to make a profit without any intent of using it for agricultural production. But Federal law prevents “paper-trades” of water from occurring. Farmers are expressly forbidden from selling what they cannot use. [If this is the case, then don’t sign CVP contracts for water that farmers cannot prove they will need. Yet these proposed contracts may include substantial amounts of such unneeded water. We repeat our call from our original essay: The federal government should not sign the CVP contacts until this issue has been resolved.]

The not-so hidden agenda of the Pacific Institute apparently has little to do with stopping waste or even preserving the environment as much as it does in stopping population growth and development. It is probably not coincidental that Stanford University professor Dr. Anne H. Erlich, co-author of the infamously wrong 1968 book The Population Bomb, is on the Board of Directors of the Pacific Institute. [Although Dr. Ehrlich does serve on our board she was not a co-author of The Population Bomb. She also had nothing to do with our original essay. In addition, the Institute has not written about population growth and we have no “hidden” agenda — we are open and transparent about the goals we are working towards.

What think tanks in “blue cities” like the Pacific Institute apparently want to do is to stop agricultural enterprises and new housing development from thriving in “red counties” where the population is growing. [Since when is smart water policy “red” or “blue”? This is just an attempt to politicize and polarize the issue of water and has nothing to do with our argument.]What might be called liberal Land Rover environmentalism continues to paint a distorted image of California agricultural water politics as a Cadillac Desert rather than as a horn of plenty for both the economy and the environment. [No one at the Pacific Institute owns a Land Rover and we dispute Mr. Lusvardi’s contention that California agricultural water politics have been a “horn of plenty” for California’s environment. We ask Mr. Lusvardi to correct the errors in his piece and also whether he no longer believes what he wrote for the Reason Institute. If he now supports inappropriate federal subsidies to farmers to inefficiently grow surplus crops, he should go on record with that support. We stand by our argument: Unsustainable federal subsidies are harming California’s ability to fairly allocate and efficiently use water.]