'Without water we can't grow anything': can small farms survive California's landmark water law?

Nikiko Masumoto began her farming career in the summer of 2011, just as California was entering its worst drought in recorded history.

Masumoto is the fourth generation of her family to farm this land in Del Rey: 80 organic acres of stone fruit in eastern Fresno county in California’s fertile Central Valley, its most perfect peaches bound for the epicurean Chez Panisse restaurant in Berkeley.

For four years in a row, the farm survived only on the water it could draw from underground. And as the drought persisted, the perfect peaches grew less perfect – smaller, malnourished. The farm lowered its wells and pumped more so Masumoto could keep the trees alive.

The farm made it through by way of grit and preparation. But even with plenty of both, said Masumoto, “surviving is a real question.”

At 34, Masumoto is roughly half the age of the average farmer. Where her neighbors are pondering retirement, she is thinking about how climate change and dwindling underground water reserves are going to affect the rest of her life, and her family’s legacy.

“I’m at the beginning of my career. I hope to be farming for another 40, 50 years,” she said. “I think there’s going to be another catastrophic drought. What are we going to do?”

The Central Valley is America’s fruit bowl, and the heart of California’s $50bn agriculture industry. But the 2011-2017 drought raised serious questions about the future of that industry and forced the state to grapple with regulating the one thing fueling much of it: groundwater.

Rights to California’s uniquely unregulated groundwater have always come along with ownership of the land above. Groundwater allowed farmers to make it through dry times and to plant in parched places far from natural rivers or government canals. No entity would reliably track how much water any pump sent up, let alone prevent that pumping, even as the ground sank and thousands of residential wells ran dry.

Hoping to bring overtaxed groundwater basins back into balance, the California legislature passed the Sustainable Groundwater Management Act (Sgma) in 2014 to begin regulating groundwater for the first time in the state’s history.

The law, which created management agencies and set a 2040 deadline for sustainability, stands to reshape California agriculture and the Central Valley’s way of life. The Public Policy Institute of California estimated between 500,000 and 780,000 acres would have to be fallowed in order for the state’s natural aquifers to come back into balance. But the journey to sustainability will be a slow one, as the region glides toward the deadline – and as climate change further withers the state.

Farmers with means plan for survival by seeking other water rights or planting more water-intensive but high-priced crops. Those without may be faced with fallowing their fields or getting out of the growing game altogether.

The pumping won’t stop yet, but surviving is a real question.

‘Drilling like crazy’

Some of the long banners and signs mounted beside the highways that run through the center of California have been there for years: “Save California’s Water”, “Dam Water Grows Food”, “Pray for Rain”.

They are emotional totems and rallying cries for an agricultural system built on the engineering and re-engineering of the state’s water geology above and below the ground. All of that water – roughly 80% of the water California has – built an industry on which America relies to eat, producing two-thirds of the nation’s fruits and nuts and more than one-third of its vegetables.

For over a century, farmers have drilled deeper and deeper to get the water they need for their thirsty and thirstier crops. As the years wore on, the ground sank and compressed below them, making it impossible for some aquifers to ever recharge.

The drought that struck the valley in 2011 only accelerated the crisis. Without the benefit of surface water, farmers applied for record numbers of new well permits.

Related: Everything you need to know about California's historic water law

“The really big growers were drilling these really big wells like crazy, and often neighboring farms were drying up,” said Dave Runsten, policy director at the California Alliance for Family Farmers. “In a situation like this, the people with the shortest straws lose.”

The state passed Sgma in the midst of this madness. The law tasked local authorities with forming new agencies to manage their own abused aquifers by monitoring and measuring the water table and preparing plans to recharge the aquifers and capture and store more water wherever possible by 2040.

The first Sgma plans for California’s most abused aquifers were due on 31 January – nearly six years after the law first passed. They largely focus on increasing water supplies, not limiting demand, as agencies scrounge for every drop. With deadlines decades away, the majority of plans reflect little sense of urgency to stop the underground extraction now.

“My expectation is there’s probably going to be more optimism about the ability to augment supplies than might be borne out in reality,” said Ellen Hanak, vice-president and director of the Public Policy Institute of California Water Policy Center.

The water table is expected to continue to sink, as farmers are expected to continue to pump – at least, if they can.

The toll on small farms

It is unlikely that the Central Valley will see the pain of Sgma shared equally. The cost of sustainability appears set to hit the valley’s most modest players first.

There are roughly 8,000 small farms between Fresno and Tulare counties alone, according to the 2012 agricultural census, many of them farmed by immigrants. Ruth Dahlquist-Willard, small farms adviser with the University of California Fresno Extension, worries about how those small farms will fare over the next 20 years, as the water table continues to drop.

For farms that can’t rely on surface water, local Sgma plans in their current form could mean the difference between making it another season or selling the farm. The growers with the short straws will continue to lose.

The plans set both goals and failure points for groundwater depth. In an analysis of the Central Kings groundwater sustainability plan in Fresno, UC Davis researcher Darcy Bostic found 20 agricultural wells would fail if the water table met the agency’s objectives, and 71 would run dry if it sank to its failure point. Those numbers are probably even higher, said Dahlquist-Willard, but many vulnerable wells are older than the state database. The plan assumes agricultural wells are about 600ft deep, but some small farmers in the area have just 80ft wells.

“One question is, what happens under Sgma?” she said. “Another question is, what happens under Sgma when there’s another drought and the options are more limited than they were in the last drought?”

Gianina Thaoxaochay and her husband are Hmong, a tight-knit agrarian community in Fresno. They farm 10 motley acres just south of the city, lined with a variety of flowers and vegetables, including carrots, beets, bok choy, long beans and Asian squash. Thaoxaochay, 50, relies on groundwater for all her irrigation. She pays for an allotment of surface water from her irrigation district, even though she doesn’t use it – it comes just twice a month, which isn’t often enough to grow vegetables.

Like many other small acreage farmers in local Latino and Asian ethnic farming communities, Thaoxaochay only found out about Sgma recently. When she heard about the law on the radio last year, she was shocked.

“I’m worried. Without that water we cannot grow anything at all,” she said. “It seems like things are getting tougher and tougher.”

There is a little more hope for small growers with more cost-effective, higher-value permanent crops like fruits and nuts, and the access to surface water to irrigate them.

Masumoto, the peach farmer, has a clear view of the snowy Sierra Nevada mountain range. That snowpack has been scant in this extraordinarily dry winter – roughly half of average – but the soil on the Masumoto family farm is still moist, the color of chocolate milk.

Masumoto dug her fingers into the ground. “We’re in a really lucky position,” she said, brushing the dirt from her hands. Farms here on Fresno’s east side are naturally wetter, receiving more average rainfall than their neighbors to the west. Masumoto also relies on the Sierra snowmelt, which flows through a series of canals managed by the local irrigation district. Her farm happens to sit alongside one of those open channels, which helps recharge the water table below her land.

“The story of water is not local – it’s hyper, hyper, hyper-local,” she said.

Where other farmers fear the impacts of Sgma, Masumoto is more fearful of inaction.

“Locally it seems to me like the good old boys’ club is being entrusted with implementing Sgma,” she said. “It’s not matching the urgency with which I feel we must adapt, prepare, invest and change our ways of being farmers.”

“We’ve fallowed land – a lot of our land,” she said, looking out over a lush expanse on the farm that used to be planted with rows of grapevines. “I would much rather all of us give up a little to keep on surviving than put blinders on as if there aren’t going to be climatic changes.”

A voice in Washington

Farmers who can afford it are hoping to offset Sgma’s impact not by fallowing, but by tapping other resources. Larger firms are able to lobby for additional water rights, plant higher-value crops, buy surface water through brokers or buy land that comes with additional water access.

In Fresno county, the water flows from east to west by way of nature, pumps and politics. The Westlands irrigation district covers roughly 1,000 square miles and represents the water interests of 700 farms on the west side of the county, making it the largest agricultural irrigation district in the US. Where growers here have drilled deeper for their water, the ground has sunk into “cones of depression”, drawing more water from the east. Farmers in the area relied on groundwater alone to water their crops until Westlands came late to California’s water wars in 1952. But what the district lacked in good timing, it has made up in economic and political muscle.

Westlands is seeking permanent rights to water diverted from the Sacramento-San Joaquin delta, after decades of temporary contracts. Powerful allies in the federal government may help it succeed: the interior secretary, David Bernhardt, lobbied on behalf of Westlands before joining the Trump administration, and continued working on Westlands issues after agreeing to stop. Under Bernhardt and Donald Trump, the interior department has paved the way for re-engineering California’s water allocations and sending, in Trump’s words, “as much water as possible” to farmers.

Related: Dry February sends California back to drought: 'This hasn't happened in 150 years'

Westlands contends that additional surface water, whether from the government or private purchase, is key to the sustainability of its aquifers under Sgma.

“Westlands plans to continue acquiring supplemental water transfers to augment its Central Valley Project surface water allocation, which will reduce groundwater pumping,” Katarina Campbell, Westlands’ supervisor of resources, said in a statement.

Daniel Errotabere, 64, is a third-generation farmer and the president of the Westlands board of directors. “Some degree of regulation was probably needed to save us from ourselves, but now we’ve become extremely inflexible in drought times,” he said. “In the old days when we had plenty of surface water, we would only pump in truly dry years. Now we’re pumping almost all the time. In the big picture, the answer to groundwater usage is surface water delivery.”

Errotabere and his two brothers use drip irrigation on the almonds, pistachios, wine grapes, cotton and vegetables on their 5,200 acres in order to keep water use – and costs – low. Looking to raise receipts, Errotabere and other growers across the valley have turned to higher-profit commodities like nuts, which are far more valuable than fruits and vegetables. California almond acreage has more than doubled since 2000. They are also a less labor-intensive crop. But what growers save in worker costs, they can end up spending on water: it takes a gallon to produce one almond.

“We catch a lot of arrows for growing almonds, but those are the ones that pay the bills. I used to love growing a lot of cantaloupes and lettuce, but it just financially can’t work,” he said. “Under all this stuff, you can’t be a small family farm. It’s driving out the smaller players – they can’t keep up.”

Between 2017 and 2018, California lost more than 1,000 farms, most of them small.

‘Workers will feel it the most’

Public comments on groundwater sustainability plans reveal that managers of large farms are looking to learn more about plans for water credits and new markets that would allow for the sale of more water.

The ranks of those large farms are growing – despite increasing dryness, there is still money to be made in Central Valley soil. Over the last decade and a half, right through the drought, hedge funds including the Teachers Insurance and Annuity Association and Hancock Agricultural Investment Group have increasingly become major players in the Central Valley.

Luis Katsurayama has managed Jasmine Vineyards in Kern county for six seasons. In recent years, he’s watched mid-sized grape growers around him sell, one after another. “These pension funds and investment firms see this land as a goldmine,” he said. “We’re going to lose out on a lot of the farming essence of California.”

Kern county nearly matches Fresno’s agricultural output, but the farms here are larger – on average, over 1,200 acres.

This is where Trump visited to rally with farmers and sign a long-promised memorandum to deliver more water through federal channels, over objections from the governor, Gavin Newsom, and environmentalists. “It would be different if you had a drought,” he told the Bakersfield crowd erroneously – more than half of the state is abnormally dry or in moderate drought. “You don’t have a drought. You have tremendous amounts of water.”

If a wet spring compensates for this dry winter, all that promised water could make up some of the Sgma difference. But it will still have to actually get here. And the Friant-Kern canal, a 152-mile federal lifeline for 15,000 farms across the valley, has been so damaged by land subsidence from overpumping groundwater that it can now carry less than half of the water it was designed to convey.

Less water means more expensive water, one way or another, at a time when growers are also coping with other rising costs.

At Jasmine, they’re pulling out some of the farm’s least productive vineyards. The fields will go fallow until they figure out how, and if, they can afford to farm them again. “We’re trying to diversify but let’s be realistic – we’re grape growers. How many almond trees can really be planted here in the Central Valley?” said Katsurayama.

With the institution of Sgma, experts expect more almonds, more contraction and more consolidation. That will send ripple effects across the valley and beyond, as farmland values dip and produce prices rise. But the first to feel it will be the people who once worked the now-empty fields.

On a dry winter morning in the vineyards of a Delano grape grower in Kern county, workers pruned back dried vines under a clear, sunny sky, making their way quickly down the rows.

Sgma may control these workers’ fates, but they had never heard of the law.

Maria Duran, 35, has been working in the fields for 14 seasons. “I hadn’t heard about it at all,” she said in Spanish from behind the bandanna that covered her face, protecting her from the valley dust.

She furrowed her brow and readjusted her gloved grip on the long pruning shears. “The ones who are going to feel it the most are farmworkers.”