Quick Facts

§         Critics of California’s farmers are challenging a U.S. Bureau of Reclamation requirement to renew 231 water contracts for water districts, farmers and cities served by the Central Valley Project (CVP). If successful, the disruption of this process could lead to dramatic impacts in California’s water supply, its economy and environment.

§         California farmers produce more than half the nation’s fruits, nuts and vegetables, generate approximately $28 billion in gross receipts annually and employ 1.1 million people. These activities create $60 billion in economic activity through transportation, packaging, equipment sales, wholesale, service industries and other businesses that depend on California farms for their livelihood.

§         One third of California’s farmland – roughly three million acres – relies on the CVP for critical water supplies.  The CVP also furnishes municipal and industrial water for about one million households and generates clean hydroelectricity to meet the needs of about 2 million Californians.

§         The CVP delivers more than 800,000 acre feet of water each year to fish and wildlife protection and habitat restoration and provides 410,00 acre feet to state and federal wildlife refuges and wetlands.

§         As required by federal statute, the U.S. Bureau of Reclamation, which manages the CVP, has executed or is renegotiating new long-term contracts for CVP water supply with water districts, cities and farmers throughout California.

§         Reclamation conducted a thorough environmental analysis of the proposed contracts, beginning in 1993 with a Programmatic Environmental Impact Statement and more recently with Endangered Species Act consultations with state and federal agencies.  The agency also conducted detailed water needs assessments for every CVP contract before determining the amount of water deliveries incorporated into new agreements.

§         Water rates in the new CVP contracts are set by federal statutes:  The Reclamation Reform Act of 1982 and Central Valley Project Improvement Act of 1992.  The contracts require that rates be based on full repayment of project costs by 2030.

§         Settlement Contracts were predicated on an exhaustive analysis of historic water use for each settlement contractor.  Challenging these settlement quantities would undermine Sacramento River water allocations and cause a need for Sacramento River water basin adjudication.  This would result in chaos and disputes over water that would last for decades and would disrupt urban and agricultural water plans.

§         State and federal policies create incentives that encourage voluntary water transfers.  Farmer-to-farmer water transfers, or transfers between farmers and cities, provide important flexibility to address shortages through voluntary market mechanisms.  The CVPIA, championed by Senator Bill Bradley and Congressman George Miller, encouraged the use of water transfers.