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<br />Comments to SWSI, November 3,2003, by John Wiener <br /> <br />9 <br /> <br />counsel during the Drought of the 19508 (this is a long story; your correspondent has a <br />forthcoming pubrication if this is of interest)~ There is one other new element, as weU: the <br />remarkably fast growth of organic produce and meats, and djrect sales in the last decade (see <br />Dimitri, C. and C. Greene, 2002, Recent Growth Patterns in the U~S. Organic Foods Market, <br />USDA ERS AIB..777t avaUable on-Une, and <www.ers.usda"gov/Briefing/Organic!>. Skeptics <br />may be surprised that growth in the 19905 was greater than 20% per year; in 2000, for the first <br />time, more organic food was sold in conventional supermarkets than elsewhere. <br /> <br />One of the implications of this growth in sales and direct sales of produce and meat products is <br />that water distribution in metropolitan areas increases in value since so much of high-value <br />farming takes place in metropolitan territory. Though only 160/0 of cropland is in these countiest <br />they hold 330/0 of the farms and produce 1/3 of the value of US agricultural output (Heimlich and <br />Anderson 2001, supra.) The proximity to consumers also herps with direct sares, though in <br />Colorado there is considerable travel to farmers. markets in the Colorado Springs --Fort Collins <br />Metropolis, e~g. from Palisade and Paonia. <br /> <br />The chance to convert to higher-yieJding activjties may depend on being able to continue to use <br />low-cost water, given the continuing price squeeze on commodity farmers~ In 1998-2001, before <br />the serious drought in the PJains and Southwest of 2002t nearly half of aU US corn and wheat <br />producers, and a fourth of soy producers were unable to cover both operating and asset costs; <br />this was also true for more than half of milk producers, and nearfy three fourths of hog producers <br />(McBride, W.O., 2003, uProduction Costs Crjtical to Farming Decisions", USDA ERS Amber <br />Waves magazine (Sap 03); availabJe on..line from USDA ERS)~ The costs of even improved <br />irrigation technology such as modern center-pivot sprinklers or drag hosest or drip irrigation <br />systems are non-triviaf indeed (see Central Plains Irrigation Association website for information <br />about presentations on costs and cost-effectjverless). How can these technologies be financed if <br />the water rights are up for grabs and can be expected to cause fights over whether the ditch will <br />sellout or not? <br /> <br />The public values in aU the benefits of viable agriculture are sUbject to defeat if the public faUs to <br />support the transitions needed to keep operations going, and defending the water distribution <br />systems is arso defending those public interestsl It is not clear that this means Jarge reservoirs <br />no matter what the expense; working on that question is the purpose of the SWSI, but it does <br />seem to mean that we should avoid choices that adversely affect the non-market benefits enjoyed <br />as beneficial externalities from viabre and partly near-by agriculture. Rural sustainability is more <br />than small farm sustainability, and it depends too on retaining options and the chance to attract <br />investment and employment and tax base, which seems in turn to depend strongfy on water flows <br />and distribution, and viabJe-looking agr;culture~ Economic analysis of only part of the story will <br />mislead at best; the whore picture includes all these non-market values as weU as the short tale of <br />farming-s woes. <br /> <br />liTo be effectjve, rural poficy must address issues rerating to the full range of <br />opportunities for economic stimuJation and not just those in agriculture and other natural <br />resource related industries. n (Pulver 1996: 117, supra). <br /> <br />At this time, the open question for rural areas is whether the ndrought..induced farm recessionu <br />can be overcome (Henderson, J. and N. Novack, 2003. nWill Rains and a National Recovery <br />Bring Rural Prosperity?1I Economic Review, Federal Reserve Bank of Kansas City, (available at <br /><www.kc.frb.org>). Crop insurance went up 88 percent higher than a year before in the Plains <br />states, and became Ua primary source of income for many farmers in 2002" (ibid.)~ The drought <br />intensified the rivestock slump, and those who didn-t quit or sell off herds at reast scaled back- <br />but, as cattre on feed were down substantialry in the Pfainst they were up in the Midwest U.S. <br />net farm income was knocked down in 2002t but national supplies were not exhausted and prices <br />went up~ The problem of semi-arid marginal agriculture was again emphasjzed - the national <br />production revels don't move as much as the regional, so the counter-cyclical income supports <br />