'It Would Mean Total Annihilation' – Some Farmers Sell Off Fields Ahead Of Groundwater Law

Dec 6, 2019

Even with his eyes closed, Doug Martin can recognize the sound of every tractor on his Hanford ranch. There’s the big silver work horse, and the 40-year-old Oliver that can still run his backup generator, but the one he looks at with love is a tiny green thing from 1958. “The first time I plowed ground with it, I was seven years old,” he says, recalling how he mishandled the plow and feared he had ruined the fields. He hadn’t; his father simply re-plowed them. “This little tractor did a lot,” he says, laughing.

Martin’s grandfather purchased these 200-odd acres in the 1930s after emigrating from the Azores, renovating the tiny ranch house on the northeast corner that still serves as the anchor of the property. Throughout the generations, the Martins raised cattle, then moved to row crops. “Corn, cotton, wheat, broccoli, sweet corn, garlic, milo,” Martin says. “Let’s put it this way: I’ve tried just about everything.”

Even so, running the property has become progressively harder. A few years ago, chronic illness forced Martin to retire and rent out his land to other farmers. Since then, he says it’s become hard to break even. Finally, in early 2018, he put the Triple-M Ranch up for sale. After almost two years on the market, it’s currently in escrow.

Martin plans to keep roughly two acres in his land sale, containing the corner home his grandfather renovated nearly a century ago and the newer home his daughter and grandchildren still live in.
Credit Kerry Klein / Valley Public Radio

The final straw, he says, was the Sustainable Groundwater Management Act, or SGMA, which will begin to be implemented early next year. “It would mean total annihilation of the agriculture in this state,” he says. “It will destroy it.”

For those keeping their land, Martin knows SGMA will likely mean water cutbacks, which could lead growers to spend more money on water markets or be forced to fallow some of their land. The exact details are still being worked out by hundreds of local water agencies, but the Public Policy Institute of California (PPIC) earlier this year estimated that even under the best case scenario, a half a million acres in the San Joaquin Valley—around 10 percent of the region’s irrigated farmland—could be fallowed. “Don’t think I'm going to stay here and take a beating,” Martin says. “There's a point where you've got to fold them and run.”

“People don't know for sure what to plan for, because they haven’t announced what’s anticipated that they’re going to allow us to pump,” says Russ Waymire, a friend of Doug Martin’s and a farmer-turned-agricultural realtor. His agency moves orchards, vineyards, dairies and open land anywhere from the size of a parking lot to thousands of acres.

Agricultural realtor Russ Waymire says Martin is far from the first grower he's seen grappling with dropping land values ahead of SGMA implementation.
Credit Kerry Klein / Valley Public Radio

Even though SGMA hasn’t even been implemented yet, Waymire says Martin is just one of many farmers he’s seen driven out of agriculture by future water uncertainty. “That's happened time and again up and down the Valley,” he says.

Other change is already here. In many places, land values are dropping. Waymire, meanwhile, pulls out a listing for a 150-acre alfalfa ranch he’s been trying to sell in Hanford. In just a year, its appraised value fell 25 percent. Martin found a buyer only after lowering the price of his land by over $1 million.

Farmers are worried, Bream says. Some feel angry, even betrayed by lawmakers and the environmental groups that have pressured them into what they see as ever-tightening regulations on the ag industry. While many disagree with SGMA, most do acknowledge that California’s unrestricted groundwater use has been unsustainable. “If you take the long view of agriculture, which I tend to do, we have to make sure that if we want to keep farming that we don't deplete our groundwater,” Bream says.

Bream argues, however, that much of the pressure of SGMA could have been eased by more water storage to provide a more reliable supply of surface water. Although growers receive a share of Central Valley Project water pumped out of the Sacramento-San Joaquin River Delta, allocations to agricultural contractors south of the delta fell to 0 percent at the worst of the drought in 2014 and have bounced back to 100 percent only once.

The Sustainable Groundwater Management Act has left many growers worried and angry, says Eric Bream, a third-generation citrus grower in Lindsay.
Credit Kerry Klein / Valley Public Radio

Many water stakeholders in the Valley had highly anticipated the construction of Temperance Flat Dam upstream of Millerton Lake, but of the $2.7 billion approved by voters for water storage projects on the 2014 water bond, the California Water Commission ultimately approved only $171 million for the project. Earlier this year, California Attorney General Xavier Becerra blocked an attempt to raise the height of Shasta Dam, citing concerns about wildlife habitats downstream in the McCloud River. “We hear these narratives about building additional storage that it's too expensive, there's just not enough water,” Bream says, “and then we look at a year like this where that water is going out to the ocean, and it can be frustrating.”

When it comes to land values, Bream is right about access to two water sources: More and more, banks and other lenders are looking for both when appraising property and issuing loans, says Wells Fargo agricultural economist Michael Swanson. He confirms that some land prices in California have fallen ahead of SGMA implementation. However, he asks, “does it mean less profits? That’s not as clear, because as you reduce supply of some [crops], prices might go up enough to help compensate for that lost production.” Likewise, he points out, the value of land with steadier surface water access could increase.

Swanson agrees that SGMA is a big deal in California, though he argues that water access has been changing land values—and land use—for decades. Russ Waymire, the ag realtor, was forced to sell his land and change careers in the 90s when water allocations dropped. Anyone familiar with Valley agriculture likely remembers when growers during the state’s historic drought tore up their row crops for new economic opportunities with almonds and pistachios. “So we’ve already seen this transformation starting, and SGMA will definitely define it more and probably accelerate it more,” says Swanson.

Waymire, right, is a long-time friend of the Martin family. He used to sell farm equipment to Martin's father.
Credit Kerry Klein / Valley Public Radio

“Implementing SGMA is going to be a heavy lift for the Valley,” agrees Ellen Hanak, Director of the PPIC’s Water Policy Center and lead author of the report predicting 500,000 acres of fallowed Valley land. She’s optimistic, however, that the local governments responsible for making sustainable plans, known as Groundwater Sustainability Agencies, do have options to lessen the blow to growers and other water users. “We find that with smart management, including local trading as well as maximizing the amount of cost-effective new supplies including recharge, you can reduce the costs of adjustment to SGMA,” she says. “You can get them down to about a quarter of what they would be if we don’t manage this in a smart way.”

Still, many growers lack either the patience or financial stability to wait and see how the law shakes out. As for who’s buying their offloaded land, many fear takeovers by corporations run by investors in big cities or even out of state, coming in to level fields and simply sell the water. From the trends he’s seen, Michael Swanson says those buyers are a minority—for now—and that most scooping up land are Valley-based growers or investors already holding a stake in the local economy.

Doug Martin, however, isn’t so concerned with what his buyer will do with his Hanford ranch. “The rascal's going to write me a check? I love that guy,” he says, laughing.

Martin plans to hang onto the two acres holding the homes painted sunshine-gold that’ve housed his family for generations, as well as the jungle gym he recently built for his grandchildren. For the rest of the ranch, the deal should close by Christmas.

This story accompanies two others on the Sustainable Groundwater Management Act, from the perspectives of small farmers and disadvantaged communities seeking more engagement in local decision-making.

*An earlier version of this story incorrectly stated that voters had approved $1 billion for the construction of Temperance Flat Dam.