During a recent drive through the Central Valley of California, I saw electric motors on the corners of irrigation blocks pumping water to all manner of crops in a state that provides 90% of the nation’s vegetables and nuts, as well as rice, cotton and alfalfa. It was a reminder that most water used for irrigation comes from our hidden treasure, groundwater.
In August, the New York Times released “Uncharted Waters,” an investigative series of four reports that found some striking trends.
The articles highlight the shocking dangers that lay ahead for America due to its over-reliance and unsustainable mining of the nation’s groundwater - a natural heritage that can’t be replaced. The dramatic findings include:
“A wealth of underground water helped create America, its vast cities and bountiful farmland. Now, Americans are squandering that inheritance.”
“The Times analyzed water levels reported at tens of thousands of sites, revealing a crisis that threatens American prosperity.”
“Nearly half the sites have declined significantly over the past 40 years as more water has been pumped out than nature can replenish.”
“In the past decade, four of every 10 sites hit all-time lows. And last year was the worst yet.”
“These declines are threatening irreversible harm to the American economy and society as a whole.”
Groundwater trends are resulting in lower agricultural yields, increased costs, growth limits and failing farms. This can’t go on as business-as-usual. Here are my three controversial recommendations that would make a significant difference in sustaining our ability to continue to feed the American people.
Rebecca Noble for The New York Times
First, there should be a national policy discussion around groundwater management that sets controls on groundwater extraction beyond safe scientific limits. If farmers, local managers and state governments are unable to police themselves from continually pumping towards “managed depletion” and exhaustion, then federal agencies like the USDA and EPA need to consider setting and enforcing limits to ensure sustainable agricultural production.
Second, growing food for people should be prioritized over crops for biofuel. Corn is America’s largest crop, covering 95 million acres. 45% of corn produced goes not to feed people or animals, but to produce ethanol, a biofuel that is used as a gasoline additive and solvent, and which the federal government mandates under the Renewable Fuel Standard. In addition, corn ethanol has a low energy balance, meaning that after accounting for all the energy used to produce it, it provides very little net energy gain as a biofuel.
Third, the US should consider enacting agricultural export controls to limit the damage to our groundwater stocks. 48% of the soybeans grown on 83 million acres in the US are exported. 10-20% of corn production is exported as well. So, the US is basically engaged in the annual export of 50,000,000,000,000 gallons of water for irrigating soybeans while depleting groundwater that is increasingly irreplaceable in any meaningful timeframe and which once depleted will no longer be available to grow food for people.
Echo River Capital is investing to innovate precision irrigation while improving productivity, what we call crop-per-drop. Eight of 18 investments so far focus on water and energy efficiency in agriculture - the most investments made to any one industry. This makes sense given that over 70% of global water used is for irrigated agriculture. These companies will make a tremendous impact and will contribute towards the fourth agricultural revolution with the demonstrated potential to increase agricultural productivity by 20-30%. But even the widespread adoption of these technologies will be insufficient and misplaced if there isn’t a larger intention and focus on the long-term sustainability of groundwater.
In essence, current American national policy is incentivizing the endless and destructive mining of our groundwater heritage for gifts to energy companies, multinational agricultural corporations, and foreign countries. Surely, we can revisit these misaligned policies and lack of controls to better secure the future of our national food supply.
Peter Yolles
Echo River Capital
Data Sources: USDA, ES&T, Hay and Forage Grower, S&P Global, NASS/USDA, ERS/USDA, Farm Policy News/UI, The Three Ages of Water by Peter Gleick (2023), Chapter 17: The Blue-Green Revolution, Dr. Michael Webber, “How to make the food system more energy efficient,” Scientific American, 2012.
Thank you for reading my recent post and following Echo River Capital.
- Peter