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California agriculture is entering a new phase of water management under the Sustainable Groundwater Management Act, one in which managing demand — not just finding new supplies — will increasingly determine the future of farming.
Water managers, researchers and consultants are seeing groundwater sustainability plans translate into on-the-ground changes for growers. They warn that while SGMA has triggered new investments in recharge, infrastructure and water markets, the next challenge will likely be reducing groundwater demand — a process with potentially significant economic consequences for farming regions.
Mike Myatt, senior director of climate resilient water systems at the Environmental Defense Fund and one of the founders of the Groundwater Demand Management Network, told the State Board of Food and Agriculture last week that the California Department of Water Resources has been “really stressing” the approach in its reviews of groundwater plans.
“And demand management is not cheap,” said Myatt. “To lean into demand management as a reduction approach is critically important … but it doesn’t come without its own price.”
Aaron Fukuda (TID photo)Demand management gaining attention
The network launched last year to help agencies and stakeholders share information and develop strategies for meeting SGMA requirements, with help from researchers and consultants.
The concept of demand management broadly refers to reducing groundwater use — whether through land fallowing, crop changes, efficiency measures or market mechanisms. Those tools will likely become more important as groundwater sustainability agencies begin implementing the plans approved by DWR.
Myatt said a statewide survey conducted by the network last year found strong recognition that demand management will play a role in achieving groundwater sustainability. He explained that about three-quarters of the respondents recognized demand management as important.
Yet the survey also revealed widespread confusion about what the term actually means.
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Many associated the concept with new water supplies rather than reductions in pumping — highlighting the need for better communication and technical assistance as agencies move forward.
Economic pressure building in farm regions
Aaron Fukuda, general manager of Tulare Irrigation District and interim general manager of the Mid-Kaweah GSA, said the economic impacts of SGMA are already visible in the southern San Joaquin Valley.
One of the most immediate effects has been a steep drop in farmland values tied to groundwater restrictions, with Fukuda comparing the loss of land to the 2008 housing crash.
“We had built in the state of California an equity that you could not imagine in our agricultural community,” Fukuda told the board. “And we just lost it overnight.”
In some cases, he said, farmland values have fallen by half or more as buyers account for reduced water availability.
“We’re seeing land devalue 50 to 60%,” Fukuda said, adding that the decline could be even larger depending on whether properties find buyers, but warned it is “more likely it ends up in the bank.”
Those changes are rippling through local economies.
Preliminary economic analysis in the Kaweah subbasin by researchers at the University of California, Merced, and ERA Economics suggests that achieving groundwater sustainability could cut farm-gate revenues by several hundred million dollars annually, with broader economic impacts approaching $1 billion.
“Many of our small c
Mike Myatt (EDF photo)ommunities do not survive that,” warned Fukuda.
Despite the growing pressure, Fukuda said the transition is happening gradually in many areas.
Permanent crops like almonds and pistachios still dominate the landscape, limiting how quickly growers can adjust their water use.
Still, some changes are emerging. He has noticed a slight shift in cropping patterns, with some farmers returning to olives, cotton or other crops that require less water while still generating revenue.
Fukuda noted that some practices once criticized as wasting water — such as flood irrigation — are now being reconsidered as tools for groundwater recharge.
“It’s funny how things go in cycles,” he said. “We used to say, ‘You bad farmers for flood irrigating.’ Now we’re saying, ‘Can you do that? But we’ll call it AgMAR.’”
Technology and information gaps
Researchers and consultants say one challenge for growers is simply keeping track of the rapidly evolving water landscape.
Tomo Kumahira, co-founder of water management startup WaterOne, said farmers frequently struggle to navigate complex groundwater policies while running day-to-day operations. Summarizing feedback from growers his company has interviewed, Kumahira said the top concern was that farming is already a full-time job and now growers have to manage water as well. Many producers face mounting administrative burdens as they monitor groundwater allocations, fees and regulatory changes.
To address that issue, his team has begun tracking hundreds of meetings held by GSAs, irrigation districts and water agencies to help farmers stay informed, “especially when things are changing every quarter.”
While demand management is gaining attention, supply-side solutions remain essential, requiring a combination of groundwater recharge projects, new conveyance and storage infrastructure, water trading systems and conservation measures.
Jeff Davids, a supervising engineer at Davids Engineering Inc., and Isaya Kisekka, a UC Davis professor of hydrology and agricultural water management, are both involved in the demand management network. They emphasized that sharing data and lessons among GSAs will be critical as agencies test different strategies.
The network aims to create a hub where water managers, researchers and farmers can compare approaches and avoid duplicating mistakes.
“My goal is to create a community of learning and sharing,” said Myatt.
