SLO County restricts water use, promotes selling rights
February 14, 2023
By KAREN VELIE
The San Luis Obispo County Board of Supervisors is considering giving farmers the choice between planting crops or selling their water rights. It’s a move that could pay off for a group of large, wealthy landowners. The move came after supervisors reversed an ordinance allowing farmers who quit growing during the previous drought to plant crops
Large landowners spent more than a decade promoting water restrictions, banking and sales as the California drought reduced the amount of water available to farmers.
Many of the larger landowners planted crops before a restrictive water use ordinance went into effect. That locked in their water rights and increased the value of their land.
In 2018, Limoneira, a large commercial farm, described the financial benefits of its “water strategy.”
“The fair market value of the company should increase as the investment community begins to appreciate the linkage between Limoneira’s water position and its long-term business objectives,” according to the company’s water strategy. “What distinguishes Limoneira from competitors is our ability to directly and indirectly monetize the value of our water position through enhanced competitiveness positioning and profitability.”
In its letter, Limoneira explains its plans to capitalize on the transfers of water rights.
“Water transfers and exchanges can create a free market short, interim and long-term return on redistribution of water,” according to Limoneira’s water strategy.
During the early portion of the 2011 through 2016 drought, the county recommended farmers take a break from planting in order to protect the basin. Dozens of small farmers elected to reduce or to not plant at that time.
In 2013 the Board of Supervisors passed an offset ordinance that required farmers who were not growing, to provide water offsets to use more than 5 acre-feet a year.
Supervisor Debbie Arnold dissented, noting how decade-long farmers who stopped growing during the drought would lose their water rights. The supervisors put a sunset provision that would end the ordinance in two years.
Several years later, rather than sunset the ordinance, the board voted to make it permanent until a groundwater plan was in place.
Supervisor Arnold argued the county needed an ordinance to protect the small farmers who lost their rights during the 2011 drought.
In December, the board voted 3-2 to adopt a basin planting ordinance that would allow farmers not currently growing above the basin to use up to 25 acre-feet a year.
After receiving tens of thousands of dollars in donations from large farmers wanting to bank and sell water, on Feb. 7, supervisors Bruce Gibson, Jimmy Paulding and Dawn Ortiz Legg voted to rescind the planting ordinance passed in December, before it went into effect.
In support of their votes, Paulding and Ortiz Legg declared that the basin is in overdraft and that they need to restrict water rights to protect the basin.
Gibson argued that the California Department of Water Resources listed the Paso Robles Groundwater Basin in critical overdraft.
However, the executive director of the California Water Resources Control Board said that his agency made the overdraft determination based on “newspaper clips” and not on any “technical reports or maps,” according to an April 23, 2014 letter from Thomas Howard, the water board executive director.
As part of an ongoing lawsuit filed by more than 800 property owners over the basin in response to the 2013 offset ordinance, a court ruled the basin was not in overdraft nor had it been in overdraft in more than approximately 40 years,
After the board voted to end the planting ordinance, Gibson made a motion to look into allowing farmers who are currently growing to pull out their crops while retaining their water rights, which could allow the sale of those water rights to the small farmers who quit growing during the previous drought.
The board then voted 3-2 in favor of Gibson’s motion with supervisors Arnold and John Peschong dissenting.
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