Who Hijacked Our Country

Monday, May 12, 2014

How to Make Money from the California Drought

Or maybe this post should've been titled Chinatown:  The Sequel.

With California entering the third year of its worst drought ever, most Californians are leaving their cars unwashed, letting their lawns and gardens die, and hardly ever bathing or flushing the toilet.  (Yellow is mellow, brown goes down.)

The dried-up rivers and lakes have killed jillions of fish, and lots of farmers are either letting their crops die or plowing them under.  But that's just for chumps.  If you're shrewd, well-connected and have the conscience of a pimp, you can make a fortune from the California drought.  Froma Harrop describes the Byzantine system of allocating water to a farming empire built where it shouldn’t be — in a desert...California has about 3,000 water districts, but the California Department of Water Resources doesn’t know the exact number. Nor does it have a clear idea what the districts are doing.  Out of complexity hidden in darkness rise corruption and reckless public spending. And fortunes are made.

If you're growing the kind of crop that can be plowed under alfalfa, strawberries, vegetables, etc. then just plow it under already and wait for the drought to end.  But trees and vines take a long time to mature; they can't just be plowed under and then re-planted.  For somebody whose vineyards or orchards are mature and represent a huge investment, it might make sense to be allocated extra water during a drought.  Unfortunately the law doesn't make any distinction between someone whose orchard has been there for years, or generations even and some sleazebucket who just this year started planting acres and acres of tree crops, just to take advantage of this loophole.

Another loophole (unique to California):  Residential developers are required to show that they have a source of water for the new residents they'll be bringing in.  Farmers have no such requirement; they can plant anything anywhere any time.  And this is where the vulture capitalists come in, and where the Chinatown reference comes from.

Quoting again from Froma Harrop's column:

Billionaires Lynda and Stewart Resnick of Beverly Hills own Paramount Farms, an agricultural titan. Again, the water they obtain through public infrastructure may be used only for agriculture or restoring groundwater — according to law, anyway.  But that doesn’t seem to matter. The Resnicks appear to be selling some of their water to a developer seeking to create a new 2,000-acre planned community, Gateway Village, in another county. This is being done through a web of exotic arrangements — with the water bouncing through a maze of Resnick-owned companies, West Side Park Mutual Water Co. in particular...The Root Creek Water District, where Gateway is located, is in on the deal. Its lawyers will argue that the water being moved around is really just meant to recharge depleted groundwater. And that groundwater will be used for ... the pistachio and almond trees.

Here are some more links to Lynda and Stewart Resnick.

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Blogger Jerry Critter said...

Agriculture is the biggest user of water, but the responsibility for conserving water during the drought is placed on the citizens. Money talks and people suffer.

May 12, 2014 at 11:12 PM  
Blogger Tom Harper said...

Jerry: That's about it -- money talks and people suffer. Corporate "farmers" can waste millions of gallons of water while everyone else is scared shitless to even flush the toilet.

May 13, 2014 at 7:30 PM  
Anonymous Anonymous said...

Federally aided subsidies used to be the reason why it was cheaper to buy California produce and ship it back east, then grow it locally. When I lived in NYC in the 80's I used by this horrible looking produce at the stores then to find out it came from California, a NT Times Editorial called for stores to start buying more from upstate farmers then California and I've heard that's happening.

David Cay Johnston reported on how small time Water Utilities were being taken over by large corporations - many of them foreign. Apparently they have found out how to do it without elections and then raised rates on their customers 100's - 1000%. The advantage (as always) is the tax breaks given to Utilities.

These may be some of the districts wheeling and dealing to the highest bidder.

Perhaps we have to storm their corporate Bastille's and chop off their heads for cutting off our water supplies.


May 13, 2014 at 8:11 PM  
Blogger Tom Harper said...

Erik: Water privatization is definitely a huge problem and getting worse. It's more common in third world countries, where Western corporations -- including Coca Cola, Bechtel and Nestle, for just 3 examples -- buy up the drinking water supplies and sell it to the locals extortion prices.

But it does happen in the States too. CSI: New York had an episode a few years ago about water supplies in upstate New York being bought up by a private company. And there are rumors in this area that a French corporation is trying to buy our local water supplies.

May 14, 2014 at 11:43 AM  

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