By Dave Puglia

The four-year drought that has hammered California may be easing this year, thanks to El Niño storms, but it will leave lasting scars—beyond any from prior droughts—on the state’s political, legal and even social landscape.  For example, we have seen unprecedented media and political criticism of the water needed to produce food, the imposition of new state laws regulating and restricting groundwater extraction, unprecedented enforcement actions by state water regulators against pre-1914 water rights holders, and, through the continued and deliberate underutilization of water conveyance and storage facilities, the loss of immense amounts of water to the Pacific Ocean.

Now, another discussion among “stakeholders” (a nauseatingly overused term in Sacramento) is moving to the front of the line.  It centers on the long-held criticism leveled by water managers, think tanks and environmental activists that California’s water management system is beset by inadequate and inaccessible data on the movement and use of water, and that better use of this natural resource can only be realized by requiring better, more useable data and by making it transparent to all.

The state legislature is on a water policy roll, for better or worse.  Some of us argue that the “stakeholders” we represent, still reeling from the many new water laws, regulations and policies being thrust upon them, need time to work with their local governments, water districts and industry partners to manage the implementation of all these changes.  Improvement in water data collection, management and use may not wait, however.

Two bills have been introduced in the state assembly that would create new state policies and systems for water data management.  The legislation is very complex and will undoubtedly be subjected to many amendments, assuming they progress very far.  In the background, small groups of—wait for it—stakeholders, are working quietly to try to shape the legislation.

Most of us approach this discussion with our shields up.  Agriculture has rights to a very large amount of California’s water, and other interests have their eyes on it.  So we have to be cautious.

On the other hand, these bills are not being authored by legislators hostile to agriculture.  Assemblyman Bill Dodd (D-Napa) is a former Napa County supervisor known for his moderation and sensitivity to the needs of business, including farms, and Assemblyman Marc Levine (D-San Rafael) has been a receptive and helpful voice to agriculture since arriving in Sacramento in 2012 (after unseating an incumbent and fellow Democrat who was very hostile to agriculture).  These legislators are serious, policy-minded individuals, not activist-aligned ideologues.

More importantly, the premise of this legislation is to effectuate a more functional, efficient and credible market for water transfers between and among the diverse water users throughout the state.  Two water policy experts at the Public Policy Institute of California, a respected nonpartisan think tank, recently wrote,

“Water trading is an important tool for managing water scarcity. It enables water right-holders to voluntarily shift water—permanently or temporarily—to those who need it, making better use of existing supplies.  Despite potential benefits, the approval process for trading water in California continues to be lengthy, cumbersome, and lacking in transparency.  This is an especially big concern during droughts, when speed is important.” (“State Water Market Needs Reform,” Hanak and Jezdimirovic, Public Policy Institute of California, Feb. 2, 2016)

One of the authors of that passage, PPIC Water Policy Center Director Ellen Hanak, was a workshop panelist at WG’s 2015 Annual Meeting and spoke emphatically about the need to evolve California’s arthritic water transfer laws, policies and infrastructure in order to bring forth a water market that encourages transparent, efficient and mutually-beneficial transactions in times of shortage.  She suggested that absent this evolution, an eruption of political and legal conflict could tear apart California’s constitutional and statutory water rights system and replace it with something far less accommodating to the largest water users.

Whether a true water market system is desirable and even achievable for the agriculture industry is among the most complex and serious questions facing the industry, and the time to address it may have arrived.