The boundaries of the DWZ are shown in Figure 3.2. Only users within this zone have access to the alternative water supplies. This region was targeted because the negative externality that groundwater pumping imposes is larger for growers directly on the coast than for growers further inland. Moreover, underlying hydrologic characteristics of the aquifer mean that groundwater pumping in the southern part of the region has a greater externality than in the north. The eastern boundary of the DWZ is Highway 1, rather than a particular aquifer feature. The benefits that the recycled water has in the DWZ are threefold: the higher quality water allows growers with saline groundwater to improve their crop yields, the alternative water supply reduces pumping on the coast, and the runoff from the application of this water helps to recharge the aquifer. For most of the groundwater irrigation in the Pajaro Valley, growers bore individual tube wells on their property, rather than using canals or a shared water conveyance system. With the development of the recycled water program, the Delivered Water Zone needed a network of pipes, called the “Coastal Distribution System” to move the recycled water to eligible growers. Construction began on the CDS in 2005, and has slowly increased over time. As of 2020, the CDS is approximately 20 miles long,tower garden and provides water to 5100 of the most severely affected agricultural acres. A map of the Coastal Delivery System can be found in Figure 3.3. Along the CDS, turnouts , are installed in order to provide access to growers.
In order for a grower in the DWZ to receive recycled water, the CDS needs to reach their parcel and have a turnout, the grower needs to submit an application, and there must be enough recycled water to meet both the needs of the current users and of the applicant. Recycled water is sourced from the Watsonville Recycled Water Facility, which is a treated urban wastewater facility. It began operation in 2009. In the first full year of operation, the recycled water facility supplied 2700 acre-feet, but the facility has capacity for up to 6000 AFY, and plans have been approved to expand the facility further. While the recycled water is the main source of delivered water, there is some water available from the Harkins Slough Recharge and Recovery Facility. This facility intercepts some of the surface outflows from the Harkins Slough, which are wetlands just south of the Pajaro Valley. If not redirected for use in the valley, the outflow would have run into Monterey Bay, mixing with seawater. This storage facility has been in existence since 2002, and was the first groundwater recharge project constructed by the water management agency. While PVWMA has a permit to pump 2000 AFY from the Harkins Slough, the reality has been closer to 1000 AFY , due to a lack of flow through the Slough and the limited capacity in the recharge pond. Since recycled water comes into contact with crops, proper treatment of the recycled water is paramount. In order to meet California’s stringent recycled water standards, the water is tertiary treated, which means that all solids larger than 10 microns are removed, and the water is treated with UV light to kill pathogens. Some salts, nitrates, and phosphates may remain, but the quality is high enough to be directly applied to agricultural products, and safe enough to enter the aquifer for household use. The average total dissolved solids levels in recycled water is approximately 600 mg/L, which is high enough to cause some damage to salt-sensitive agricultural products, but much lower than TDS levels under drought conditions or in seawater-intruded wells.
To ensure that salt contents are sufficiently low, the recycled water is also blended with water from inland wells. To generate revenue to support the program, PVWMA collects augmentation fees for delivered water and fees for groundwater pumping in the basin4 . The pricing of both groundwater and recycled water began in 2002, and a tiered pricing system was established in 2010. A snapshot of 2016-2021 water prices, by category, are found in Table 3.1. The price of water varies in the Pajaro Valley depending on where the water is sourced , if the well is metered or unmetered , and if the well is within the delivered water zone. While fees for recycled water are higher than the cost of groundwater pumping in the DWZ, the fees are structured specifically such that when one factors in the electricity costs of pumping groundwater, the recycled water is slightly cheaper. To price groundwater, PVWMA meters all wells capable of extracting 10 AFY, as well smaller wells, if they serves 10 acres of orchard, 4 acres of berries or row crops, or 2.5 acres of greenhouse facilities. Municipal, agricultural, and industrial wells make up 87% of water use, while rural residential wells make up 2%, and the rest is consumed by delivered water users. Few residential wells have meters, so they are estimated to use 0.5 AFY, and are charged based on that estimate. Pajaro Valley’s water prices are high, relative to other groundwater charges. In most of the United States, groundwater pumping is not metered, and water prices are merely the electricity costs required to operate the pump. Even in locations where water prices have been implemented, they tend to be significantly lower than the prices in Pajaro Valley. In California’s productive Central Valley, water prices are commonly between $70-150 per acre-foot, and the 2018 Farm and Ranch Irrigation Survey finds that California growers pay an average of $67 per acre-foot for “off-farm” water. However, there are some regions facing similar or much higher water prices, depending on water supply constraints. Growers in San Diego county, for example, pay $1700 an acre-foot, due to water scarcity. Moreover, in Pajaro Valley, the irrigation water costs are minor when compared to the revenue and profits for the crops grown in the region. On average, revenues are $34,000 an acre, and reach up to $68,000 per acre for strawberries. The combination of high revenues and low water requirements leads me to believe that growers are not deficit irrigating in response to the water prices.
The Pajaro Valley is known for its production of delicate, high value produce, including strawberries, apples, raspberries, blackberries, artichokes, grapes, lettuce, and a variety of vegetables and herbs. As of 2019, total production value in the region was over $1 billion across 28,500 irrigated acres. The major California berry producer Driscoll’s is headquartered in the region, as is the cider producer Martinelli’s. The temperate, coastal climate is ideal for the production of these crops. Moderate temperatures year-round, sunny days, and foggy nights are excellent growing conditions for sensitive crops. However, the delicate nature of this produce means that they are also susceptible to other challenges, such as salinity damage. Salinity damage impacts almost all stages of plant growth and development,stacking flower pot tower including germination, vegetative growth, and reproduction . These effects lower crop yields and economic returns. For salinity in irrigation water, damages rarely occur until salinity reaches a crop-specific, critical “threshold”. Then, crop yields decline linearly as salinity levels rise. The threshold at which salinity damages begin to occur varies significantly, depending on the crop. For example, strawberry yields begin to decline at TDS levels of around 450 mg/L, while zucchini may not decline in yields before TDS levels reach 2000 mg/L. Grattan estimates and compiles these thresholds and yield declines for a variety of crops grown in California. Figure 3.4 depicts the relationship between irrigation water salinity and yield for a sub-sample of crops in the Pajaro Valley. Since crop revenues are so high for these products, even minor yield declines can lead to significant losses. In 2020, strawberry revenues were around $68,000 per acre, raspberries yielded around $59,000/acre, and apple revenues were $9,800 an acre. A yield loss of 10%, which would correspond to a TDS increase of 128 mg/L for strawberries, decreasing their revenue by $6,800 an acre. Therefore, growers are motivated to find possible solutions to deal with salinity issues in their groundwater, although individual basin management is out of their control. An alternative water source, such as recycled water, with moderate salinity levels, can mitigate severe crop losses while also preventing further seawater intrusion. Data provided from Pajaro Valley Water Management Agency for this analysis consist of water quality measurements from the network of monitoring wells, quarterly pumping and recycled water deliveries, depth to groundwater contour maps, and annual land use data. The details on how these data are built into a parcel-level panel are below. Additionally, I bring in variables on temperature and precipitation, property boundaries and ownership, and crop prices and revenue. Summary statistics are presented in Table 3.2. Pajaro Valley Water Management Agency has been collecting water quality data in the basin since 1957, and has built a network of 286 monitoring wells.
The locations of these monitoring wells are depicted in Figure 3.5 as black dots, overlaid on top of all the metered wells in Pajaro Valley . These monitoring wells are typically sampled twice annually, once in spring and once in the fall . This sampling method captures water quality at two critical time periods: spring is before the primary irrigation season, after winter rains and when water tables are the highest, and fall is after the main irrigation season, when water tables are the lowest. While PVWMA takes multiple salinity measurements, I use the total dissolved solids measurement, as it is generally the most salient to growers5 . For both fall and spring of each year, I take all water quality measurements of TDS and use an inverse distance weighting technique to interpolate a map of water quality for the entire Pajaro Valley. In the analysis, I focus on spring TDS, given that salinity before the growing season is considered to be the most important for agricultural water users, and is the most likely to predict summer basin conditions for growers. Figure 3.6 shows the history of average spring TDS values spanning 2003-2020, highlighting seasonal salinity patterns in the basin. Averages for the delivered water zone and the rest of the Pajaro Valley are compared. For the full region, spring TDS levels averaged 645.9 mg/L and ranged from 272.4 mg/L to 17,103.7 mg/L. The dashed line at 600 mg/L represents the approximate average TDS level of the recycled water. As can be seen, average salinity levels in the basin are frequently lower than the TDS levels of the recycled water, except in years of very high salinity. The spikes in salinity, which are especially high within the delivered water zone, are largely caused by drought conditions: groundwater pumping stays relatively stable, but the lack of precipitation leads to less groundwater recharge. With less freshwater percolating through to the aquifer, TDS levels in the remaining water are higher, and seawater intrusion is more likely to occur. As outlined above, there is significant variation in salinity across time. Importantly for our analysis, there is also spatial variation in salinity. This spatial variation is largely driven by inherent underlying characteristics of the aquifer, as well as distance to the coast and surface water sources. Parcel characteristics, such as soil properties, slope, and land elevation also play a role. Figure 3.7 shows average salinity levels across the Pajaro Valley basin from 2009-2020, plotted by decile. This figure indicates that inland regions, aside from those located near the Pajaro River, experience significantly lower levels of salinity, especially towards the south. Notably, the coastal region just north of the delivered water zone experiences some of the highest TDS levels, providing some initial evidence that recycled water may be having an impact within the delivered water zone. An impressive feature of the data from Pajaro Valley are the data on annual land use, which covers the 2009 and 2011-2020 growing seasons. PVWMA also engages in quality control practices, including randomly sampling parcels for additional checks. These ground-truthed land use data have key advantages over satellite data, which is known to have substantial error in measuring land use among California’s unique crop set . Agricultural land use types include vegetable row crops, strawberries, blackberries and raspberries , vine crops, artichokes, orchards, nursery crops, greenhouses, fallow ground, cover crops, and unknown agricultural use.