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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 19505 (this is a long story; your correspondent has a <br />forthcoming publication if this is of interest). There is one other new element, as well: the <br />remarkably fast growth of organic produce and meats, and direct sales in the last decade (see <br />Dimitrit C. and C. Greene, 2002, Recent Growth Patterns in the U.S. Oraanic Foods Market, <br />USDA ERS AIB-7??, available on...Une, and <www.ers.usda.gov/Briefing/Organic/>. Skeptics <br />may be surprised that growth in the 1990s 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 jn value since so much of high-value <br />farming takes place in metropoUtan territory. Though only 160/0 of cropland is in these counties, <br />they hold 330/0 of the farms and produce 1/3 of the value of US agricultural output (HeimUch and <br />Anderson 2001, supra.) The proximity to consumers also helps with direct sareSt though in <br />Colorado there is considerable travel to farmers' markets in the Cotorado Springs ..-Fort Collins <br />Metropolis, e.g. from Palisade and Paonia. <br /> <br />The chance to convert to higher-yielding activities 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 Plains and Southwest of 2002, nearly half of all' 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 producerst and nearly three fourths of hog producers <br />(McBridet W.O., 2003, "Production Costs Critical to Farming Decisions", USDA ERS Amber <br />Waves magazine (Sap 03); available on..line from USDA ERS). The costs of even jmproved <br />irrigation technology such as modern center-pivot sprinklers or drag hoses, or drip irrigation <br />systems are non-trivial indeed (see Central Plains Irrigation Association website for information <br />about presentations on costs and cost-effectiveness)4 How can these technorogies be financed if <br />the water rights are up for grabs and can be expected to cause fights over whether the ditch will <br />sell out or not? <br /> <br />The public values in all the benefits of viable agricurture are subject to defeat if the public fails to <br />support the transitions needed to keep operations going, and defending the water distribution <br />systems is also defending those public interests. It is not clear that this means large reservoirs <br />no matter what the expense; working on that question is the purpose of the SWSf, 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 viabte and partly near-by agricuJture. Rural sustainabiJity 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 strongly on water tlows <br />and distribution, and viable-looking agriculture4 Economic analysis of only part of the story win <br />mislead at best; the whole picture includes all these non-market values as weU as the short tale of <br />farming's woes. <br /> <br />UTo be effective, rural policy must address issues relating to the full range of <br />opportunities for economic stimulation and not just those in agriculture and other natural <br />resource refated industries.1I (Pulver 1996: 117,1 supra). <br /> <br />At this time~ the open question for rural areas is whether the IIdrought-induced farm recessionlt <br />can be overcome (Henderson, J. and N~ Novack, 2003, IIWill Rains and a National Recovery <br />Bring Rurar 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 I-a primary source of income for many farmers in 2002U (ibid~). The drought <br />intensified the livestock slump, and those who didn1t quit or sell off herds at least scaled back - <br />but, as cattre on feed were down substantially in the Plains, they were up in the Midwest. U.S. <br />net farm income was knocked down in 2002, but national supplies were not exhausted and prices <br />went up~ The problem of semi-arid margina~ agriculture was again emphasized - the national <br />production levels don-t move as much as the regional, so the counter...cyclical income supports <br />