We can conclude that the current data shows a steady growth in water markets despite the recent predominance of relatively wet years. In spite of the active and growing water market, Hanak points out that California’s water market only accounts for 3 percent of total annual water use. Hanak estimates that Central Valley farmers have accounted for approximately three-quarters of all water sales, while the rest of the water has been supplied from Imperial and Riverside Counties. According to Hanak, environmental regulations, rather than urban agencies, have been the major sources of the increased demand for water. Direct purchases for in stream uses and wildlife reserves constituted over one third of increased water trades since 1995, while agricultural activities in the San Joaquin valley accounted for over half of the increase in water purchases. This increase in agricultural demand for water stems from the reduction in contractual water deliveries under environmental regulations. However, municipal agencies are the principal purchasers of long-term and permanent water contracts, which constitute approximately 20 percent of total water trades. The 2001 legislation that requires that local governments ensure adequate water supplies for development is likely to increase the urban demand for long-term water transfers.Within California there is considerable resistance to water trading which stems from communities in the source regions. These communities are concerned that water sales will generate significant “third-party” effects; i.e. trades may have an adverse impact on both local groundwater users and the local economy.
These concerns have arisen from communities’ perception of the impacts of short-term water transfers in the early 1990’s,hydroponic bucket which involved the implementation of fallowing contracts by the state to purchase water for the 1991 drought water bank. Water transfers, which were accompanied by land fallowing, slightly reduced the demand for labor and other farm inputs and also decreased the supply of raw materials to local processors. Howitt estimated that losses in county income in two counties that transferred water ranged between 3.2 percent in Solano County, where 8 percent of the acreage was fallowed for transfers, to 5 percent in Yolo County, where 13 percent of the irrigated acres were fallowed. Those farmers who replaced the surface water they had sold by pumping additional groundwater were accused of reducing both the quantity and quality of water available to other users. Because groundwater resources are not regulated by the state, the implementation of the Californian water market has sparked concerns that aquifers will be subject to uncontrolled mining. The experience of the 1990’s has exacerbated another source of anxiety: local officials fear that once water has been transferred elsewhere, local communities will have insufficient money and political influence to retrieve these water entitlements . Currently, state approval is only required for water transfers pertaining to surface water entitlements that were acquired since 1914, certain types of groundwater banking and any water that is conveyed through a publicly owned facility. The state only actively safeguards against negative economic impacts on source counties when water is conveyed through these publicly owned facilities. In the other two cases, traders are obligated not to harm other surface water rights-holders, fish and wildlife. Rural counties have attempted to protect their water interests by implementing local restrictions on water marketing in the form of local ordinances . By late 2002, 22 of the state’s 58 counties had put ordinances into effect . These ordinances mandate the acquisition of a permit before exporting groundwater or extracting groundwater to substitute for exported surface water. Individuals who wish to obtain a permit have to undergo an environmental review process.
According to Hanak, the very low number of permit applications indicates that this process acts as a deterrent to water trades, rather than as a screening mechanism. Statistics for 1990 to 2001 suggest that the implementation of groundwater export restrictions reduced a county’s water trades by 14,300 acre-feet and transferred 2,640 acre-feet of water purchases to in-county buyers. Since 1996 total groundwater exports were reduced by 932,000 acre-feet or 19 percent and total water sales were reduced by 787,000 acrefeet or 14 percent .While the 1994 appellate court decision favoring Tehama County sanctioned the implementation of groundwater ordinances, counties do not have the legal authority to ban crop fallowing, although several counties have implemented such policies. According to Hanak, these counties tend to have boards that are elected by the general community, as opposed to boards that only permit landowners to vote. In general, landowners are more likely to fallow land for the water market, especially when crop prices are low. Section 1745.05 of the Water Code mandates that any fallowing proposal that exceeds 20 percent of the local water supply must undergo a public review. Hanak found that water districts that implement fallowing programs tend to include restrictions in these programs that ensure that the viability of idled land is maintained and that landowners who engage in land idling are not solely engaged in selling water. In summary, a well functioning water market is seen as essential to California’s ability to adapt its restricted developed water supplies to changing demands for water. Over the past seventeen years the water market has evolved different forms and has shown steady growth despite relatively good water years. However in recent years, local resistance to water markets has taken the form of local ordinances. These ordinances need to reflect both the interests of local communities and state water users to enable the development of effective markets without imposing undue costs on local communities.
Over the course of a year, some 35,000 of the state’s 750,000 employers hire a total 800,000 individuals to work on the state farms, so that about 5 percent of California’s 16 million workers are “farm workers” sometime during a typical year. Agriculture is a seasonal industry, hiring a peak 455,000 workers in September 2002 and a low of 288,000 in February 2002. Since most farm workers are employed for fewer hours than manufacturing workers, and earn lower hourly wages, they have lower than average annual earnings. Average hourly earnings in California agriculture are about half of average manufacturing wages, $7 to $8 an hour versus $14 to $15 per hour,1 and farm workers average about 1,000 hours a year, so that farm workers have annual earnings of $7,000 to $8,000 a year, a fourth of the $30,000 to $35,000 average for factory workers.Since 1975, farm workers have had organizing and bargaining rights, but there have been elections on only about 5 percent of the state’s farms,stackable planters and there are contracts on only about 1 percent. Farm worker unions have about 30,000 farm worker members; the organizing and bargaining activities of the dominant union, the United Farm Workers, have increased since founder Cesar Chavez died in 1993. Beginning in 2003, the state can require mandatory mediation that results in an imposed contract if employers and unions cannot negotiate a first agreement. During the 1990s, the percentage of unauthorized farm workers increased along with the market share of farm labor contractors and other intermediaries who, for a fee, bring workers to farms. Wages and fringe benefits generally declined in the 1990s, and farmers, fearing losses if unauthorized workers were to be removed suddenly, have lobbied in Congress since the mid-1990s for an employer-friendly guest worker program. They have not yet succeeded in winning such a program, and the debate in 2003 is whether surging Mexico-U.S. illegal migration is best managed with guest workers, legalization, or a combination of the two, so-called earned legalization, under which unauthorized foreigners in the U.S. would obtain a temporary legal status that could be converted to an immigrant visa with continued U.S. employment.Food and fiber is produced on farms, which are defined in the U.S. Census of Agriculture as places that sell at least $1,000 worth of farm commodities a year. Most of the 2.2 million U.S. farms are considered family farms, a term that is not defined officially, but a common definition is that a family farm uses less than 1.5 person-years of hired labor. 2 Most family farms are diversified crop and livestock operations that provide work for farmers and family members year-round, and the mechanization of many farm tasks has enabled most farm families to include one or more persons employed in non-farm jobs. California farms are different because of specialization, size, and the presence of hired workers. Instead of combining crops and livestock, most California farms specialize, producing only lettuce, peaches or grapes. These FVH crops—fruits, nut and berries, vegetables and melons, and horticultural specialties that range from nursery and greenhouse crops to Christmas trees, mushrooms, and sod—require large amounts of labor for short periods of time, so large FVH farms can require hundreds of workers for 3 to 6 weeks, and only a handful the rest of the year.
In California, FVH commodities occupy a third of the state’s irrigated crop land and account for half of the state’s farm sales. Producing FVH commodities with hired workers in California fields is often compared to manufacturing products on factory assembly lines. Like factories, the farms bring together people, land, water, and machines to transform seeds into crops, with agriculture’s biological production process marked by risks that do not arise in manufacturing production processes governed by engineering relationships. FVH commodities are considered “labor-intensive:” labor costs range from 20 percent to 40 percent of total production costs—higher than labor’s 20 percent share of average production costs in manufacturing, but less than labor’s 70 to 80 percent share of costs in many service industries. The people relationships on California farms are also different from stereotypical U.S. family farmers. Unlike family farmers who do most of the farm’s work with their hands every day, the managers responsible for most of California’s labor-intensive crops rarely hand-harvest themselves. Indeed, many are unable to communicate with the workers in their native languages: most managers are U.S.-citizen non-Hispanic whites, while most farm workers are Hispanic immigrants. A familiar adage captures many of the differences between California agriculture and mid western family farms: California agriculture is a business, not a way of life . Production and employment are concentrated on the largest 5 percent of the state’s farms, and in most commodities, the 10 largest producers account for 30 to 50 percent of total production. However, there are many small farmers and small farm employers, which tend to obscure the degree of concentration. Dole Food Company is probably the largest California farm employer, issuing over 25,000 W-2 employee-tax statements annually. However, Dole does not show up in state employment records as a farm employer. Dole’s Bud of California vegetable growing operation is one of the largest employers in Monterey County, and is considered in the business of selling Groceries & Related Products, not farming . Sun World International is also classified in Groceries & Related Products, as is Grimm way Farms. Similarly, Beringer Blass Wine Estates is classified as a Beverages manufacturer, as is Giumarra Vineyards Corp. and Ironstone Vineyards. Many of these non-farm operations use custom harvesters and labor contractors to bring workers to their farms, and they are required to report their employment and wages to EDD. During the 1990s, when average annual farm employment rose to a peak 413,000 in 1997, so did the percentage of workers on farms whose employers were non-farmer intermediaries—usually labor contractors who are classified as farm services by EDD. The percentage of workers on farms whose employer is a non-farmer intermediary is about 45 percent, up sharply from less than 30 percent in the mid-1980s.Employment in California agriculture is highly seasonal. The most labor-intensive phase of production for most commodities is farming, and the peak demand for labor shifts around the state in a manner that mirrors harvest activities. Harvesting fruits and vegetables occurs year-round, beginning with the winter vegetable harvest in Southern California and the winter citrus harvest in the San Joaquin Valley. However, the major activity during the winter months between January and March is pruning—cutting branches and vines to promote the growth of larger fruit. Pruning often accounts for 10 to 30 percent of production labor costs but, because pruning occurs over several months, there are fewer workers involved, and many pruners are year-round residents of the area in which they work.