When fiscal experts start talking about land use, planners often get nervous. Economists and planners don't necessarily have the same definition of "good" land use.
So I found it interesting during the Great Valley Center's annual conference on May 9 and 10 in Sacramento that a UC Davis economics professor and a banker made two compelling arguments regarding the "best" use of farmland. UC Professor Richard Howitt argued for retiring large chunks of farmland in the Bay Delta region, while Ken McCorkle, a Wells Fargo senior vice president, told the gathering that one of the biggest threats to California's $34 billion agricultural industry is urban sprawl.
Howitt spoke during a breakout session on the Delta and, specifically, on a recently released Public Policy Institute of California (PPIC) study that he helped write. One of the assumptions of past studies, he explained, is that agricultural islands within the Delta must remain viable. But Howitt dug further and found that most agricultural acreage in the Delta is devoted to field corn, alfalfa and pasture — very low value crops. Plus, most of this low-value ag is concentrated on islands that are the most vulnerable to flooding.
Many Delta islands lie 20 feet or more below sea level and are protected by levees. One of the PPIC study's conclusions is that letting some of those levees fail, thereby flooding islands, could aid the Delta's ecological health. Local farmers, of course, vigorously oppose such a plan. But Howitt argued that a "crash" in the Delta — either a complete ecological collapse, which appears near, or a natural disaster such as earthquake-caused levee failures — could cost other portions of the state tens of billions of dollars in economic damages cause by interruptions in the State Water Project and Central Valley Project. Meanwhile, the value of all ag products in the Delta is less than $300 million a year, or less than 1% of the state's total.
Howitt had a perfect example. Two years ago, a levee protecting an island known as the Jones Tract failed. The state raced to plug the gap and ended up spending somewhere between $45 million and $65 million to stabilize the levee. But Howitt estimates that the value of the privately owned farmland protected by the publicly funded levee is at most $28 million. To an economist — and probably to most taxpayers — this makes no sense.
Speaking during a lunch session, McCorkle, manager of Wells Fargo's agricultural industries group, said the Central Valley farm industry is thriving and has a bright future. However, he said, that future is threatened by four things: the loss of unique farmland to urban development, an inadequate and unreliable water supply, an inadequate labor supply and an overloaded transportation system.
If the Central Valley continues developing in its current pattern, it will lose about 900,000 acres of farmland (14% of the total) by 2040, said McCorkle, who emphasized that the region's combination of soil and climate is exceedingly rare in the world.
"It's time to start going up a little bit more, rather than going out," McCorkle urged.
In fact, this has been a theme at every Great Valley Center conference since the first one in 1998. Usually, it's the planners making this pitch. Now, even a banker agrees. Maybe he'll have more impact than the planners have had.
— Paul Shigley
