November 21, 2013

Dan Keppen

Executive Director

The Importance of Irrigated Agriculture in the West

&Recent Developments

About the Alliance

Family Farm Alliance Initiatives

• The Importance of Western Irrigated Agriculture to the U.S. Economy

• Colorado River Basin Study Engagement

• Streamlining of Low-Head Hydro Projects

How to Engage?

• Work with allies in Congress

• Engage federal agencies

• Participate in Hearings

• AGree Advisory Committee

• Johnson Foundation• Western Agriculture

and Conservation Coalition

Recent Developments in the Small Hydro Arena

• Two bills - H.R. 267, "The Hydropower Regulatory Efficiency Act", and H.R. 678, "The Bureau of Reclamation Small Conduit Hydropower Development and Rural Jobs Act" - were signed into law August 9th by President Obama.

• The two bills authorize and streamline permitting for small conduit hydroelectric projects on Bureau of Reclamation (Reclamation) owned canals, and authorize and streamline FERC regulatory actions on small non-federal conduit hydroelectric projects.

Recent Developments in the Small Hydro Arena

• The House of Representatives completed action on the bills earlier this year, passing them with overwhelming bipartisan support.

• Once out of the House, the Senate Energy and Natural Resources Committee moved quickly, approving both of the bills unanimously in May and passing them both by unanimous consent.

• Alliance Involvement• 2 New Bills – Bennett / Crapo

Infrastructure Tax Incentive (Cory Gardner the lead on the House side). Daines Bill – similar to Tipton –applies to other Reclamation projects with authorization differing from those targeted in the Tipton bill.

The Economic Importance of Western Irrigated Agriculture Water Values, Analysis Methods, Resource Management Decisions

A White Paper Review:

Prepared For:

The Family Farm Allianceand the

Office of Water,U.S. Environmental Protection Agency

Pacific NW Project-9-2012

The Economic Importance of Western Irrigated Agriculture Water Values, Analysis Methods, Resource Management Decisions

Pacific NW Project-9-2012

The “Irrigated Agriculture Industry”

1) Direct Agricultural Production. 2) Agricultural Services. 3) Food Processing.

Economic Impact$(INCOME)

The Economic Importance of Western Irrigated Agriculture Water Values, Analysis Methods, Resource Management Decisions

Pacific NW Project-9-2012

1. Arizona 0.976 Million Acres2. California 8.0163. Colorado 2.8674. Idaho 3.2995. Kansas 2.7626. Montana2.0137. Nebraska 8.5588. Nevada 0.6919. New Mexico 0.83010.N. Dakota 0.23611. Oklahoma 0.53412.Oregon 1.84513.S. Dakota 0.37314.Texas 5.01015.Utah 1.13416.Washington 1.17517.Wyoming 1.550TOTAL: 42.30 Million Acres

Western U.S. Est.Irrigated Acres 2007-08

The Economic Importance of Western Irrigated Agriculture Water Values, Analysis Methods, Resource Management Decisions

Pacific NW Project-9-2012

“Silent” Opportunity Costs For Irrigated Agriculture?

1) Food Security and $$:

Food Production and Distribution Logistics.

The Economic Linkage:

Available High-Quality Products (WTP).

Contribution to Tax Base and Government Services.

Contribution to Disposable Income.

Impact to the Consumer Economy.

The Economic Importance of Western Irrigated Agriculture Water Values, Analysis Methods, Resource Management Decisions

Pacific NW Project-9-2012

2011:U.S: 6.7%U.K: 9.4%Greece: 17.6%China: 21.3%Russia: 31.2%

1945-2012 Period of U.S. Ag. Expansion and Productivity+

Added Income Loss and Opportunity Cost Impacts?

The Economic Importance of Western Irrigated Agriculture

Recent Steps:

• Peer Review by Farm Foundation Complete

• Updated Numbers, using 2011 commodity prices

• Final Report Released in September

The Economic Importance of Western Irrigated Agriculture

• New, Updated Value: $156 BILLION

• Final Report was jointly issued with Irrigation Association

• Many thanks to our New Mexico contributors.

Colorado River Basin Study 

Colorado River Basin Study 

Acreage of Irrigated Crops in the Colorado River Basin. Source: USDA Census of Agriculture, NASS (2009).

Family Farm Alliance Concerns

• We appreciate Reclamation and the Basin states for their collaborative effort that led to the completion of this important study.

• From now on, all Colorado Basin parties can work from the same technical foundation.

• However, virtually every scenario assessed by

the Basin Study shows a loss of Colorado River Basin irrigated acreage by the year 2060.

Basin Study Projections

Significant shortfalls are projected between expected water supplies and demands in the

Colorado River Basin in coming decades.

Basin Study Projections• One million acre-feet of water can be conserved from

agriculture by the year 2060 to fill the estimated gap that will exist between water supply and demand – primarily through temporary, rotational fallowing and deficit irrigation practices. 

Basin Study Projections

• Irrigated acreage in the Colorado River Basin will decrease by 300,000 to 900,000 acres during the time period 2015 to 2060.

Concerns

• Policy makers and Colorado River stakeholders must understand the critical implications of taking 6-15% of existing irrigated agriculture out of production.

Concerns• 2012 Global Agricultural

Productivity (GAP) Report.

• Quantified the difference between the current rate of agricultural productivity growth and the pace required to meet future world food needs.

Concerns

• In 2010, GHI’s inaugural GAP Report calculated that global agricultural productivity (TFP) must grow by an average rate of at least 1.75 percent annually to double agricultural output by 2050.

• The findings from the 2012 GAP Report indicate that global TFP is rising at an annual rate of 1.84 percent.

Irrigated Agriculture is an Economic Engine

• For the Basin states, the total household income impacts derived from the “Irrigated Agriculture Industry”, made up of direct irrigated crop production, agricultural services, and the food processing and packaging sectors, is well over $10 billion annually.

A New Paradigm

• We would like to see Reclamation or other water policy officials run another scenario in the Study: one that assumes that Basin irrigated acreage will not be diminished, and may, in fact, need to be expanded.

Concerns

• Policy makers need to understand what the true cost to American security and the economy is if we continue to take irrigated agricultural land out of production.

Concerns

• We cannot continue to downplay or ignore the negative implications of reallocating more agricultural water supplies from the Colorado River or other Western watersheds to meet new urban and environmental water demands.

Colorado River Basin Study Next Steps Agricultural Conservation and Transfers Workgroup

• Face-to-Face Meetings Have Begun

• Several of the entities who are represented on the Work Group participated in the Colorado River Ag/Urban/Enviro Water Sharing forum a few years ago.

• 2008 - Western Governors’ Association / Western States Water Council. “...states, working with interested stakeholders, should identify innovative ways to allow water transfers from agriculture to urban use while avoiding or mitigating damages to agricultural economies and environmental values.”

• This initiative is a direct and independent response to a 2008 Western States Water Council call to action on water transfers.

• A diverse Water Sharing Work Group of highly knowledgeable and influential water leaders representing the sectors of agriculture, urban interests, and the environment, set aside parochial positions to collaboratively take on the governors’ challenge.

Past History Can Predict Future Outcomes:The Nature of Water Transfers

• Some in the group did not want to participate in any process that would somehow encourage additional water to be transferred out of agriculture. – An essential first step in building the collaborative

process was to come to the decision that the group would focus on ways to improve sharing of water between multiple sectors

– Avoid finding more ways to unilaterally transfer water out of agriculture.

Past History Can Predict Future Outcomes:Storage

DIFFERENCES– Faced with mounting demands to provide water for urban growth

and other beneficial uses, including agriculture, some members of the group identify themselves as pro-storage.

– Others remain leery of the potential adverse impacts and costs associated with some storage projects.

AGREEMENT– There may be benefits to properly sized and located storage in

certain circumstances, especially when such projects are part of a larger, multiple-benefit strategy.

– When projects have the support of multiple entities, including agriculture, environmental, and urban players, the regulatory process for approval of such projects should be better integrated, more conducive to moving forward, and less embroiled in redundant action by multiple agencies.

Past History Can Predict Future Outcomes:Aging Water Infrastructure

• Aging Federal water infrastructure in the West must be addressed promptly and with priority commitments, as failure to reinvest in critical facilities will negate economic gains of past generations and create a failed legacy for future generations.

Past History Can Predict Future Outcomes:Aging Water Infrastructure

• It is imperative that we find creative ways to provide for the operation, maintenance, and modernization of existing water supply infrastructure.

Past History Can Predict Future Outcomes:New Water Infrastructure

• Basin agricultural representatives will insist that new storage and delivery infrastructure absolutely has to be in the solution mix, along with water conservation, demand management, and water transfers.

Western Agriculture and Conservation Coalition

• DRAFT Common Water Principles

• Will be applied to several forums, including Farm Bill conservation title negotiations.

• Also: Colorado River Basin Study

Conclusions

• Reclamation has determined that hundreds of thousands of acres of agricultural land will be lost in the Colorado River Basin due to competing interests and dwindling future supplies.

• This assumption does not comport with the need to feed a growing world population and support the national economy. 

Conclusions

• We are pleased that Reclamation and the Basin States are committed to the continued refinement of scenario planning as part of a robust long-term planning framework for the Basin.

• Policy makers and elected officials must clearly understand the importance of Western irrigated agriculture and the implications associated with drying up land currently producing food in the Colorado River Basin and elsewhere.

• We’ll do our best to advocate towards that end.

Questions?www.familyfarmalliance.org