Banning Almonds could save Colorado ranches

Are hedge funds managers betting on the Almond Earthquake?

Their economic value is second only to milk, but unlike the ‘happy ‘ cows , almond trees are demanding more than their fair share of resources of California. As an entrepreneur I strongly believe in a free market. But when the government gives special advantages to one group or business, freedom and opportunity are replaced by bureaucrats and regulations that too often put politics above public interest.

Colorado farmers, ranchers and oilmen are suffering from the effects of investors betting on profits from water in California’s drought stricken central valley. The fight to preserve our western land and lifestyle is expected to get much worse as local and federal governments reach deeper and deeper onto private property.

It seems for now, at least, the political support by the almond growers has more influence than the lives and property the of untold millions of citizens who are beginning to pay the real cost of subsidizing the almond crop. According to the United States Geological Survey, the valley between the mountains along the eastern border of California and the coastal mountains, commonly known as the central valley, has been sinking for several years now at a rate of about 11 inches per year! The cause is proving to be the underground water levels beneath the valley which are dropping as more and more water is pumped to the surface for agriculture. Meanwhile hedge fund investors are financing multi-million dollar water well projects to irrigate the hundreds of thousands of acres of almond trees now producing 300% more almonds than in 2000.

The 400 mile long swath of central California produces more than 80% of the entire world’s almonds. According to the growers’ association, 70% of the nearly 2 billion pounds annual harvest is exported, with the largest portion of that volume going to China. The value of the almond crop is expected to reach $5.8 billion dollars this year. But the 1.1 gallons of water for every single almond may increase the cost to Californians to an unimaginable level. Understand, that’s every single almond, not a pound of the water gulping nuts.

While the $5.8 billion dollars the almond industry generates might seem like a big number to those of us who dream of having a few hundred thousands, the impact of the industry measured within the $2,050,000,000,000 ($2.05 trillion) dollar California economy in total is virtually insignificant compared to the damage already being seen in the central valley infrastructure – roads, bridges, utilities above and below ground and, of course, the depletion of the underground sea of fresh water. But make no mistake, the occasional house-swallowing sinkhole we read about in Florida will be forgotten altogether when sections the central valley collapse into the vast caverns left vacant by consumption of millions of cubic yards of water.

For those of us here in Colorado who have been told that the underground water and the rivers and streams are “public” and must be allocated among all users across various states, the system of water regulations in California might seem – well, stupid, if not totally upside down. The State there feels that any water that rains down on your property is the State’s to regulate and tax. You might say the State believes God is only willing to deal directly with government; so rain water belongs to the State. But if you can afford to drill a well you are welcome to as much water from underground as you want? That explains why investors are supporting the multi-million dollar well projects for water gulping almonds in the central valley while citizens in the cities face $500 per day fines for using too much water. To be fair, “too much” doesn’t yet seem to have been defined in the law.

How does the economics of almonds in the California central valley have a negative impact on Colorado ranchers, farmers, and oilmen?

The answer to that question would easily fill an economics book or a thick thesis about population migration. Immigrants always bring changes in lifestyles to both the area they left and the area where they settle. To the many of us who understand that socialism always fails when ‘other people’s money’ runs out, the obvious problem is immigration of the socialist ideology arriving with liberal Californians fleeing drought, high taxes, and big government.

Laimer and Weld Counties are seeing a dramatic influx of Californians. Unfortunately thay are bringing with them their dependence on big government. Ironically, the lack of water for the cities, the impending “almond earthquake,” the burdensome taxes, and business regulations are all the result of people voting to grow government and support their liberal/leftist ideology. Many of those same voters are now fleeing to Larimer and Weld Counties and once again voting for liberal politicians who enact the very government and lifestyle environment they came here to escape.

Perhaps Fort Collins’ city council is as good an example of new liberal government as could be cited anywhere in America – outside of maybe San Francisco itself. Ft Collins’ council – elected mostly with support of liberal immigrants – hasn’t yet officially allowed people to walk around naked and relieve themselves against storefronts along the public sidewalks, but since this sort of behavior is accepted in San Francisco, it is only a matter of time before this too is forced into the lifestyle of Larimer County. Meanwhile, regulations governing, taxing or banning everything from oil wells to grocery sacks are forcing out the lifestyle of freedom and personal responsibility traditionally found among ranchers and farmers in Colorado.

Perhaps if enough honest, logical minded people realize – in time – the agricultural waste of thirsty almond trees in a semi-arid valley and recognize the enormous disaster risk the coastal population is facing to satisfy the taste of diners in Asia, hedge fund managers won’t soon be trying to recover their losses in the valley by buying up “lakefront property” in Harry Reid’s back yard. More importantly, maybe the migration of the California lifestyle into northern Colorado will slow enough to preserve a little of what was the Colorado lifestyle.

This situation is much like the story of the folks who loved the forest so much they decided to build their homes there. But after cutting the trees to build their houses, roads and defensible spaces, they looked around and wondered what happened to the forest.

Craig Masters

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