Pima Cotton Farmers: Making More Money with Less Water

I just came across an interesting article from the San Diego Union-Tribune about a bold shift taking place among California farmers that has been largely overlooked.  Acala cotton, long known as King Cotton in the Central Valley, is losing its market share. 

Instead of growing traditional, federally-subsidized acala cotton with heavily subsidized water, some farmers are planting premium quality Pima--a variety that attracts a higher price but is ineligible for subsidies.  

Pima can draw as much as 25 cents more per pound than generic acala. According to the Union-Tribune, in 2008, California farmers planted 151,000 acres of Pima at a value of $227 million, versus 127,000 acres of acala which only brought in $100 million.

But the most impressive trend is away from cotton altogether.  Overall acreage planted in cotton is down dramatically in the past decade, as growers turn to higher value crops like processing tomatoes.  The drought is one reason for this change.  However, several simultaneous developments show that a new way of thinking is emerging in the agricultural community. 

First, the drought is forcing some farmers to buy water on the open market from their water rich neighbors) – at unsubsidized prices.  Second, these higher water prices are leading to a significant investment in water use efficiency among agricultural water users south of the Delta. And third, in order to afford to purchase water and invest in efficiency, farmers are moving toward higher value crops. 

What these farmers are doing in their fields illustrates what water wonks like me have been saying for years: when you reduce subsidies and let the price of water more closely reflects true costs, growers have a powerful incentive to plant higher value crops and to use water more efficiently.  

In other words, the market rewards efficiency: Farmers who use less water can make more money.

Considering that California has hit peak water, and that agriculture consumes 80 percent of our water supply, this is big news.

But this big news has happened quietly.

Some Californians might be surprised to discover cotton farmers setting this example. Cotton has been the traditional bad boy of California’s crops. It has long been one of the top four water consumers, along with rice, alfalfa, and pasture.

But unlike the other three, cotton has no habitat value.  Cotton is also chemically intensive, and is grown mostly south of the Delta, which means it uses some of the most high-impact water available. Federal subsidies for cotton and for much of the water used to grow it have helped exacerbate California’s water challenges.

Now the story is changing. The way these farmers are adapting proves that when you eliminate or reduce subsidies--which can act as incentives to waste water--California farmers adapt. These sophisticated businesspeople know that when they have to pay market rates for water, it makes sense to invest in efficiency.

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