California agriculture provides much of the nation’s fresh fruit and produce. Growing conditions in the Central Valley are near-perfect, except for one thing: the area is naturally bone-dry most of the time. To get around this, massive government irrigation projects have long provided California farmers with heavily subsidized water supplies to grow nearly everything. The result has been abundant, cheap produce, but at significant cost to the taxpayer and local/regional agriculture everywhere else that can’t compete on the open market with subsidized California produce. This report from the Environmental Working Group details far more of the problematic and wasteful aspects of the current system.
Major changes to this system are in the air, however. Via the Chicago Tribune/AP, I see that severe drought and environmental ramifications of this extensive irrigation are starting to force changes in federal irrigation policy:
…this winter thousands of acres are turning to dust as the state hurtles into the worst drought in nearly two decades…Last year, federal water deliveries were just 40 percent of the normal allocations, fallowing hundreds of thousands of acres and causing nearly $309 million in crop losses statewide…Federal reservoirs are now at their lowest level since 1992.
The immediate result is that produce growers are significantly curtailing their plantings of everything from lettuce to melons, which will of course mean higher prices for these items in grocery stores due to limited supply. It’s easy to see this as yet another hit on households struggling to keep budgets together, and it will hurt badly in the traditional California agricultural communities.
However, as a Midwestern market grower, I’m thrilled. I’ve long felt, and argued, that food in the US is artifically cheap, and that our culture has become addicted to achieving rock-bottom prices regardless of the ulterior cost. The huge amounts of money poured into irrigating California’s (and Arizona’s) deserts come out of everyone else’s pockets; in effect, I’m subsidizing my own competition to undercut me.
As industrial food prices rise due to issues like oil prices and irrigation limitations, local/regional prices become more competitive. Already last year, many more visitors to the Columbia Farmers Market were noting that prices were actually quite comparable to the grocery stores. Joanna and I scoped out organic produce prices at Hy-Vee the other day, and were quite surprised at how high they were. In some cases, I would have to raise my prices just to match the store’s.
While this may not be such a feel-good story for anyone watching a household budget in hard times, consider that Americans spend a far lower percentage of their income on food than most developed countries. Consumers can afford to pay more for food, they’ve just gotten used to not doing so. It will be very interesting to see how situations like the California drought impact the ongoing boom in local/regional food supplies. What will lettuce prices be this summer in Missouri grocery stores, and how will that affect the competitiveness and cost of farmers market lettuce?