Westlands Exagerrating Water Cutback Impacts

  Dr. Jeffrey Michael says the Westlands Water District and Rep. Jim Costa are exagaretting the impacts of water cutbacks to the nation's largest federal water district.  Westlands may only receive 20 percent of its requested amount of water this year and claims it will be impacted worse than 2009, when Westlands supplies were held to just 10 percent.  Dr. Michael is director of the Business Forecasting Center at the University of Pacific in Stockton.  You can read his blog here: http://valleyecon.blogspot.com/

  Jim Costa, a Democrat, represents the Westlands area and wrote a letter to U.S. Bureau of Reclamation commissioner Michael Connor on March 3, claiming the cutbacks, due to dry year conditions and court ordered protections for Delta fish, including smelt and salmon, will cost his region's economy $2.2 billion.   Thomas Birmingham, general manager of Westlands, estimated economy losses of "more than $1 billion", in a March 22 press release,  more than a billion less than Costa's prediction.  Neither Costa or Birmingham revealed the source of their numbers or how they define "region."  

   Dr. Michael wrote on his blog: "I created some simple regression models this afternoon, and got forecasts ranging from 113,000 to 120,000 acres of fallowing for Westlands in 2013. If I use my prediction of 120,000 acres of fallowing instead of their predicted 175,000 acres, what is the economic loss[?]  Baseline fallowing in a wet year is about 60,000 acres, so my prediction is that about 60,000 acres more out of production in 2013 compared to a wet year. Of that 60,000, no more than about 20,000 could be reasonably be blamed on environmental restrictions, the rest is due to the dry weather.

   "What will be fallowed? If history is a guide, it will mostly be cotton. So my quick estimate of the impact of the biological opinions in 2008 on Westlands is about 20,000 acres of lost cotton production, representing about $50 million in farm revenue. [Of course, the farmers' loss is more than that, because supplemental water and groundwater pumping is more expensive than CVP supplies. However, Westlands cost for water transfers is another farmer's income in the Valley.]

   "Across the entire San Joaquin Valley, I think a reasonable estimate would be $100-150 million in revenue losses and about 2,000 jobs due to the biological opinions in 2013.

   "That's a real economic impact that shouldn't be ignored, but it is about 85% less than claimed by Mr. Birmingham and Congressman Costa."