“Buy-and-dry” and “the community fund is a band-aid”

When RWR Managing Partner Sean Tonner addressed the economic impact of the Renewable Water Resources proposal with Douglas County Commissioners this week, he said two aspects of the project made it “drastically different” from other groups like American Water Development Inc. and Stockman’s who tried, unsuccessfully, to export water from the San Luis Valley in the past.

First, Tonner said, RWR plans to replace water they pumped from the aquifer at a one-to-one-plus rate. Second, a $50 million community fund RWR plans to create will allegedly yield $3 million to $4 million in interest each year “in perpetuity.” Tonner said the money could be used to support the valley, which he described as impoverished with few businesses, few services and underpaid public servants.

James Henderson, a fifth-generation farmer from Conejos County and current Vice President of the Colorado Farm Bureau “representing the strength of 800,000 members”, had a very different perspective of the RWR proposal, which he clarified before getting into the matter.

“The Colorado Farm Bureau has never taken a position on a water transfer,” he said, “but we have clear policies on buy and dry of agricultural land.” Henderson said his comments on buy-and-dry could be attributed to the Farm Bureau. Specific comments about RWR’s proposal were his alone and spoken as a farmer and rancher in the San Luis Valley.

Henderson then gave a “macro” description of agriculture in Colorado, citing 31.8 million acres of agricultural land in Colorado, which is half of the state’s entire land mass. The state is home to more than 38,000 farms, 97% family-owned. Agriculture is a $47 billion industry that creates 190,000 jobs, jobs that are “crucial” to the small communities where they are largely located.

“So, what’s the rub with this project?” Henderson said. “It’s not a project. It’s a theory. Projects have timelines, budgets and engineering. I don’t see any of that in this proposal. The premise, the initiating factor is buy-and-dry. It’s the permanent removal of land from agriculture and putting that water somewhere else.”

Henderson described the practice of buy-and-dry as the “rotary telephone” of water management. “It’s old. It’s outdated. Does a rotary telephone work? Sure, but it’s not the best way. Buy and dry creates winners and losers. One loses water, the other one gets it. Sure, you can outspend us. You can out vote us – farmers and ranchers are only 2% of the population. But is this really ‘win-win’? Or is it lose-lose?”

Henderson then spoke of the cultural value of the agricultural community that exporting water puts at risk. “Why should a Douglas County citizen care what happens to some farm down some road? They didn’t know about the farm before, why would they care when it’s gone? But when you lose the production off the land, you lose the farmers.

“Farmers are the stewards of the land. They know every rock, stick and twig. These are people who are tied to the land. They know how to take care of it.

“Go into any farm household in Colorado, and you’ll find a wall full of pictures of their grandparents and parents. On that same wall, there will be an aerial picture of their land and their livestock. I may be wrong, but I don’t think people put pictures of their rental property next to their grandparents. You do not want to lose that from this state. The culture associated with that - you don’t want to lose that.

“Can you imagine a summer without San Luis Valley potatoes? All of those things are at risk when you start going into these communities and messing with their resources.”

The future, Henderson said, the path forward is through partnerships between water utility providers and farmers. “That is the way forward.”

Chad Cochran followed Henderson, directly challenging the economic benefits Tonner highlighted. Cochran is a senior loan officer who lends to farmers of all sizes “from hobby farmers with two acres to multi-millionaires farming tens of thousands of acres” and “from the top of Poncha Pass to Antonito.”  

Cochran also wears a “second hat” as the owner and operator of a family cattle ranch. “We have water in two different subdistricts and have to manage water in two different ways with water from four different ditch companies.’ That, he said, has made him very aware of the water situation, which has always been a challenge.

Cochran sees RWR as being no different from AWDI and Stockman’s. “I don’t understand. We’re in a high desert valley with a depleting aquifer, over-appropriation and continual drought for years. We rely on agriculture to survive, and agriculture relies on water. How can you design something to take that water away?”

Using USDA data from the 2017 agriculture census initially compiled by the San Luis Valley Council of Governments in collaboration with the San Luis Valley Development Resources Group and confirmed by CSU Extension for the San Luis Valley, Cochran addressed Tonner’s replacement proposal, which would take 34,000 acres of land out of production to replace the water extracted and sent to Douglas County.

Referencing printed information presented to the commissioners, Henderson said, “Taking those 34,000 acres out of production would be a loss of $18 million of revenue, and that’s only in direct sales. 34,000 acres are 5% of irrigated land in the San Luis Valley.”

After discussing the impact extracting 22,500 acre-feet from the confined aquifer would have on other aquifers within the valley, Cochran returned to the numbers, reflected in the USDA data compiled in 2017.

Cochran reported that, in 2017, the total agricultural output in the San Luis Valley was $708 million. (Total agricultural output is the total economic value of agriculture produced in a given year.)

Cochran then discussed output multipliers. (Output multipliers calculates how a dollar of agriculture is multiplied by creating other financial opportunities within the local economy where the agriculture was produced.) Applying the output multiplier to that $708 million figure from 2017 brings the total economic impact of agriculture in the San Luis Valley to $1 billion.

“Drying up five per cent of irrigated land equals a loss of $53 million. A community fund of $50 million is nothing more than a band-aid. It equals just one year of trade.”

Cochran also refuted Tonner’s claim, made earlier in the meeting, that property value of a farm would increase when an adjoining farmer’s water rights were bought at a better than market price.

“How does the value of land go up when the land next to it is dry?” he asked. “We’re taking two hundred acres of agricultural land out of Colorado every single day, and you want to dry up 34,000 acres to send water to Douglas County. When is enough enough?”