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I don't mean to overstate the importance of these numbers. I'm certainly not suggesting that the California delegation will vote as a block on all water issues or that there is an impassible divide between the Californians and the rest of the West. But I suggest that you ask yourself whether a majority opinion on western water policy can be developed without California, most of whose representatives will be from urban areas. And I suggest that you consider the policy priorities which the California delegation will bring to the table. Agriculture is big business in California, but overall it represents just two percent of the State's $700 billion economy, while using 83 percent of the State's water. California's population is about 28 million and growing by roughly half-a-miIlion each year. Very few of those people are going into farming. I think it is safe to say that, in most cases, California's priorities will be driven by very different forces than those of other western States. If there was any doubt at all about California's key place at the water policy table, that doubt ended when the House leadership appointed Congressman George Miller as acting chairman of the House Committee on Interior and Insular Affairs, Some have said that Miller's appointment is the most important development in western water since the signing of the 1902 Rec1amation Act. I'd say it's right up there, but maybe just behind the publication of Cadillac Desert in terms of its imponance, Western agriculture has choices in how it responds to the changes taking place in water politics. My advice to western agriculture and to its defenders is to take a very hard look at agricultural communities' real water resource and economic needs. How many rural communities have unhealthy or unreliable domestic water supplies? How many irrigation projects could be upgraded to provide significantly beller service to growers while using water more efficiently? How well does the local transportation and communication infrastructure meet their needs? What kind of community and environment are the area's children inheriting from this generation? I think that one will fmd in the answers to these questions the bases for equitable exchanges political exchanges -- between western agriculture and the urban and environmental interests who are besieging the citadels of old-time water law and policy. It has been my experience that any water district in the West will find a very sympathetic audience in Congress if it were to come forward offering to work with environmental or urban interests in exchange for public investment in their water project, community, or economy. Given a choice, good politicians would prefer to reconcile competing needs and reach a compromise, rather than simply disregard one set of interests in order to favor another. My recommendation to those of you who work with water policy at the local or State level is to commit yourselves to fmding the social policy tools which will permit agricultural water interests to accommodate change without being victimized by il. The ftrst move in this direction has been taken by the growing number of States which are encouraging voluntary water right transfers and thereby letting the market achieve reallocation of water for new consumptive needs and environmental values. This is a good step .- it rewards individual water right holders for participating in the satisfaction of new social needs -- but transfers aren't a complete answer. The States are going to have to wrestle with the very difficult decision of the degree to which individual water right holders will be limited in their transfer options in order to protect the rural economies and societies which have been sustained by the exercise of those rights. The answer to this question will vary State by State, river basin by river basin. I wish you the best of luck and I encourage you to let me know how programs within the Energy Committee's jurisdiction might be improved to help develop and implement these important new policies. Thank you for this opportunity to speak with you. 4