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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 1950s (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 safes in the last decade (see <br />Dimitri, C. and C. Greene, 2002, Recent Growth Patterns in the U.S. OrQanic Foods Market, <br />USDA ERS AIB-???, available on-line, 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 in value since so much of high-value <br />farming takes place in metropolitan territory. Though only 16% of cropland is in these counties, <br />they hold 33% 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 helps with direct sales, though in <br />Colorado there is considerable travel to farmers' markets in the Colorado Springs uFort 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 producers, and nearly three fourths of hog producers <br />(McBride, W.D., 2003, "Production Costs Critical to Farming Decisions", USDA ERS Amber <br />Waves magazine (Sep 03); available on-line from USDA ERS). The costs of even improved <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). 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 />sell out or not? <br /> <br />The public values in all the benefits of viable agriculture 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 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 viable 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 strongly on water flows <br />and distribution, and viable-looking agriculture. Economic analysis of only part of the story will <br />mislead at best; the whole picture includes all these non-market values as well as the short tale of <br />farming's woes. <br /> <br />"To 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 related industries." (Pulver 1996: 117, supra). <br /> <br />At this time, the open question for rural areas is whether the "drought-induced farm recession" <br />can be overcome (Henderson, J. and N. Novack, 2003, "Will Rains and a National Recovery <br />Bring Rural Prosperity?" 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 "a primary source of income for many farmers in 2002" (ibid.). The drought <br />intensified the livestock slump, and those who didn't quit or self off herds at least scaled back- <br />but, as cattle 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 marginal agriculture was again emphasized - the national <br />production levels don't move as much as the regional, so the counter-cyclical income supports <br />