- California’s first groundwater market was initiated by faculty at California Lutheran University, Thousand Oaks, to help farmers and ranchers buy and sell water to keep growing their crops. Photo: Courtesy of California Lutheran University
- Edgar Terry, a fourth-generation farmer and president of Terry Farms Inc., is participating in the water conservation project initiated by California Lutheran. Pictured is one of the wells on his ranch. Photo: Courtesy of California Lutheran University
- A telemetry unit monitors Edgar Terry’s groundwater extraction and transmits pumping data to the cloud. Photo: Courtesy of California Lutheran University
“You’ve got a university that is very community-oriented, and they view the community as a neighbor. What Cal Lutheran wants to do is make healthy communities. They saw that this would be something beneficial to the local community, that ag stays viable and keeps the community healthy. It was a perfect fit.” — Edgar Terry
A water conservation project initiated by the faculty of California Lutheran University, Thousand Oaks, could mean the difference between some California farmers continuing to grow citrus, berries and vegetables or letting them shrivel and die, leaving farms barren and their owners stripped of livelihoods.
The project, which received a $1.9 million grant from the U.S. Department of Agriculture, marks California’s first water market for individual landowners in Ventura County. It gives farmers on the Oxnard Plain, a coastal area in Ventura County about 54 miles northwest of Los Angeles, a one-stop shopping opportunity for buying and selling one of the state’s most precious commodities—groundwater.
Historically, California law mandated that farmers either use the water on their land or lose access to it in the future. Farmers who experienced an excess had no way of transferring it to their neighbors and friends. For the most part, groundwater was unregulated.
All of that changed in 2014 when the California Legislature passed the Sustainable Groundwater Management Act, a three-bill package that subjects local groundwater management to oversight and regulation by the state for the first time. Confronted with the act’s mandates, many regions of the state faced significant cuts to groundwater extraction, said Matthew Fienup, executive director of the university’s Center for Economic Research and Forecasting.
For example, in Ventura County, farmers and cities are looking at cuts to extraction that could be as high as 30 or 40 percent.
That allowance may be a lot less than it used to be for some growers, and it may be more or the same for other types of growers, said Edgar Terry, a fourth-generation farmer, president of Terry Farms Inc. in Ventura County and an adjunct professor at California Lutheran.
“Consequently, if I’m a grower and my allocation is less than I normally would use and I still want to grow the crops, I only have two choices,” Terry said. “I buy water to be able to grow those crops or fallow the ground.”
The onslaught of state regulation “is the difference between staying in business or just going ahead and shutting down the ranch at some point and calling it a career,” Terry added. “I think it’s that desperate.”
The 2014 state law marked a pivotal point for Fienup and Terry. The pair began meeting with farmers about a wholesale change in the way groundwater was managed. They began to talk about a market system that farmers embraced. They met with regulators, city leaders and environmental watchdogs dozens of times to brainstorm and build consensus centered on reform.
The result was the first groundwater market in California. It’s currently limited to the Oxnard Plain, but it impacts 50,000 acres of irrigated agriculture and an estimated 250 to 1,000 growers, Terry said. Most of them are citrus, strawberry and raspberry growers.
“It gives farmers another tool in their tool chest if they’re running short of water—to be able to buy water in an exchange from growers who may have excess water,” he said. “It’s like buying a share of stock on the stock market.”
A water market provides farmers, cities and other water users with flexibility to adapt to uncertain supplies by moving water from lower value to higher value uses, Fienup said. A water market also creates financial incentives to drive investment in water conservation and development of new water supplies.
From a practical standpoint, one of the reasons Terry said he was interested in California Lutheran becoming an active participant in this pilot project is that it didn’t have an ax to grind.
“As the adage goes, they ‘Don’t have a dog in the hunt in agriculture,’ ” Terry said. “They are a large university, so therein lies the perfect scenario. You’ve got a university that is very community-oriented, and they view the community as a neighbor. What Cal Lutheran wants to do is make healthy communities. They saw that this would be something beneficial to the local community, that ag stays viable and keeps the community healthy. It was a perfect fit.”
Many residents view California Lutheran as a “trustful partner” because they don’t have an agenda, Terry said. There were a lot of people out there who wanted to be part of this, but they had an agenda. The university’s only mission was to help the community.
The new grant money for the project, which Fienup describes as a “cap-and-trade” style of market, will be used to support expansion of the Fox Canyon Water Market pilot program and to explore opportunities to use market transactions to secure water for environmental use.
The largest portion of the funding will go directly to participants in the pilot program to offset the cost of implementing state-of-the-art monitoring technology.
