FRESNO, Calif. -- A new state report shows California farmers reaping record sales despite the epic drought, thriving even as city-dwellers have been forced to conserve water, household wells have run dry and fish have died.
California's 76,400 farms recorded $53.5 billion in sales in 2014, the year Gov. Jerry Brown declared the state in a drought emergency and launched what in 2015 became mandatory conservation for cities and towns. The sales figures are the most recent annual ones released by the state agriculture department.
With the punishing drought entering its fifth year, the figures are sure to stoke tensions between farmers on one side and, on the other, city-dwellers and environmentalists, who complain they are being forced to make greater sacrifices than growers.
Experts cite two key reasons for California farms' strong showing even in dry times: a California almond boom fed by surging demand from China and elsewhere, and farmers' ability to dig deeper, bigger wells to pump up more groundwater when other sources run out.
The state report tracked sales, not profits. Higher costs for water and other expenses of the drought outstripped sales for some farmers, but experts said it is clear many others made strong profits, as evidenced by the rush by growers and corporate investors to get into the almond business and take advantage of a run-up in prices.
Jay Lund, a water-resources researcher at the University of California at Davis and an influential voice in water policy in the state that is America's agricultural powerhouse, said the sales figures show that California farmers are doing what they should be doing in a dry spell.
"To me it illustrates that you can actually have a fairly good job in managing water," Lund said.
Some of those who consider themselves the losers in California's water wars see it differently.
"The water they're taking, they're also taking from communities around them -- like us," said Guillermo Lopez, a resident of Fresno County, the state's third-most productive farming county, who was forced to haul water when his family taps ran dry. "We're the ones left with no water."
Lopez's family well was one of 2,250 household wells around the state to run out of water because of the drought and overpumping of the state's underground water reserves, according to state figures.
Wells in Lopez's neighborhood outside the city of Fresno began running dry a year ago, and his family was forced to buy bottled water until a state relief fund paid to have a large water tank installed next to the home. Lopez said that was about the same time he also noticed farmers nearby pumping heavily from deep wells to irrigate their crops.
Wildlife has also suffered, including endangered fish. Federal and state water managers, trying to balance competing demands from farms, cities and the environment, were unable to keep enough water in rivers for California's endangered winter-run Chinook salmon, which have gone through record die-offs.
California farmers' record sales come "at the expense of our rivers and fisheries," said Kate Poole, a senior attorney at the Natural Resources Defense Council.
"There've been vast amounts of water taken away from the environment" by water managers in the drought, Poole said. "It's caused many of our native fish to crash to the lowest levels ever."
California just went through its driest four-year period on record. Brown asked California cities and towns to cut water use 20 percent in 2014, then made a 25 percent cutback for urban users mandatory the next year. Californians learned to take shorter showers and let their lawns turn brown.
Farmers say that they have suffered in the drought, too, and that the rising cost of irrigating their crops is eating into their profits. Not only are their water costs higher but their power bills have shot up because they're running their well pumps more.
"You can't assume all farmers have a new pickup and their wives all have a new Cadillac," said Pete Belluomini, who grows potatoes, onions, almonds and other crops in Kern County, the state's No. 2 agriculture county.
The University of California at Davis estimates that more expensive water and other drought-related expenses cost farmers $2 billion in 2014.
The state ordered thousands of farmers to stop taking water from rivers last year in rare move that hit even some of those with seemingly ironclad water rights dating back a century. In the fertile San Joaquin Valley, some farms in 2015 received no surface water for a second year in a row and were forced to rely on their wells to irrigate crops.
Experts warn that Californians are pumping up groundwater at unsustainable rates, causing the ground during the drought to sink more than a foot in parts of the Central Valley farm country.
Meantime, state water regulators are accused of going too far by potentially launching a criminal investigation against a local water board official, CBS affiliate KOVR in Sacramento reported.
The State Water Resources Control Board has proposed a $1.5 million fine against the Byron-Bethany Irrigation District, accusing it of pumping 675 million gallons of water from a channel in June, even after state water regulators warned the channels was running too low to provide water.
On June 12, the state cut off water to the district and other senior water rights holders in the region under an emergency curtailment order, an unprecedented step in the fourth year of California's drought. Previously, their water supply was thought untouchable under California's convoluted water system.
The hearing is set for March, but while they wait, irrigation district officials believe the state is now unfairly probing beyond the scope of the water usage investigation.
"We have information that the state water board attempted to conduct a criminal background investigation on one of our board members," attorney Daniel Kelly told KOVR. "We thought that was highly unusual."
The irrigation district has subpoenaed the state board.
"The subpoena that we sent to the state water board to understand under what authority they can conduct those background checks and number two what they learned from those background checks," Kelly said.
The irrigation district wants to know how far the state is allowed to go.
"That's what we're trying to find out. Is this highly unusual or is this something the state agency does on a routine bases? I just simply don't know," he said.
The attorney representing the state didn't want to speak to KOVR on camera, but called the allegations vague and possibly baseless.
Heavy demand for almonds in Asia and Europe has spurred a boom in the planting of almonds in California and drawn hedge funds and big corporations into the business. California almond production has doubled since the start of this century, surpassing even grapes in 2011.
Environmentalists and others complain that almonds are thirsty crops, requiring about a gallon of water per nut, or more than wine grapes use. Some agriculture experts counter that almonds are exactly the kind of high-dollar crop California farmers should be planting to make the most of scarce water.
California farmers have passed the higher costs of water on to consumers, with almond prices soaring from $2.40 a pound in 2012 to $5 last year.
The recent state agriculture report, released late last month, shows almonds were the state's second-biggest cash crop in 2014 after dairy. Exports accounted for $4.5 billion of California almond farmers' total $5.9 billion in sales, agriculture officials say.
However, the outlook for almond sales has dimmed since 2014, with overplanting by eager farmers and an economic slowdown in China threatening to end the boom.
"It's a curious case where the effects of the economic growth thousands of miles away might have more effect than a drought in California," said Lund, the UC-Davis expert.