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California’s Agtech-Focused Plan for Tackling Its Ongoing Water Problem

June 23, 2016

Despite recent rains and rising water levels, the drought crisis in the West is far from over. While many farmers struggle to keep their operations afloat with less water, low crop prices and high farm input prices are compounding an already stressful situation.

Many startups and businesses are hard at work developing technologies that can help farmers make each drop count. Next week, the Israeli-California Water Conference will convene in Marina Del Ray where attendees will discuss innovative water technologies that may have the potential to help the state achieve water sustainability. The three main sectors slated for discussion during the event include agriculture, municipal, and industry.

The companies attending and presenting at the event are innovating in a variety of sub-sectors, including water storage, leak detection, water management, and agriculture water efficiency.

So what is the current state of the drought crisis in California compared to this time last year?

According to a team of researchers at UCLA, it could take the region another four years to recover from the last five years of serious drought despite the near-average precipitation that the state has received over the past year. The team’s recent report compiled 30 years of satellite imagery from NASA’s databases that tracked snowpack in the Sierras. According to the Department of Water Resources, the region’s current snowpack is a mere 8 percent of normal for this time of year.

“We still have a huge problem on our hands,” Dave Puglia, executive vice president at Western Growers tells AgFunderNews. “It has to do with the increasing probability that a good year this last year will now be followed by additional dry years because we have a La Nina weather pattern developing that is likely to put us back into drought.”

From a future vantage point, this current period could simply be one average precipitation year bookended by two periods of severe drought, says Puglia, who will be speaking at the event next week.

Michael George, the Delta Watermaster for the State Water Resources Control Board, agrees that California’s drought situation is far from resolved.

“We are still grappling with the effects of having turned too long and too much to depleting our groundwater as partial replacement of the missing water in our reservoirs and rivers,” he tells AgFunderNews. “In addition, the drought’s damage to the environment cannot be overcome with a wet year or two.”

But he’s positive about the steps taken by farmers and civilians to conserve water recently. “Conservation of scarce resources has become a way of life for urban California and the ag sector has made impressive gains in squeezing more ‘crop per drop’ from limited irrigation allocations.”

Agriculture technology startups are all playing their part to help farmers with this conservation and efficient use of water. “I think we are all seeing an explosion of investment in agtech generally and in the water space especially. That is great and we are encouraged by that,” says Puglia.

In particular, Western Growers is performing field trials in San Joaquin Valley with Denver-based SWIIM, a water management software platform, which helps farmers measure their water use and enact water-saving measures to sell any unused water rights back into the system. SWIIM raised $3 million in Series A funding on AgFunder last year and is one of many agtech startups aiming to assist farmers in managing their water resources. Precision ag technologies — most of which aim to help farmers use water and other resources more efficiently — collectively raised over $600 million in venture funding last year.

Puglia cautions that some of these technologies may yield unintended consequences, however. Precision irrigation may help farmers use their water allocations wisely, but less water running across the surface of a field means there is less water traveling below the root zone to refill the aquifers below.

“Water use efficiency technology is a double-edged sword. We will lower ag demand for surface water supplies, but on the other hand, we won’t be recharging basins,” he says. “In the San Joaquin Valley, there is no other way to recharge than surface water being delivered from the Delta.”

Regulations may also make farmers think twice about investing in water-focused technologies, says Puglia, such as the federal Endangered Species Act. This unprecedented move to start regulating groundwater basins has become a source of pressure for many farmers who are accustomed to drawing water from wells with little to no oversight.

“Because we have endangered species in the Delta and because the regulators and the fish agencies view the operation of the pumps that supply the state and federal water projects as the primary culprit in the demise of some species, their response is to keep turning pumps down,” says Puglia. “We know from buckets of research that there are multiple other stressors impacting species decline. It’s not just the unnatural flow of water that pumps cause or the entrapment of species, we also have toxins from urban runoff, pollutants from Sacramento’s outdated sanitation system, and invasive species.”

Ultimately, water efficiency is only as good as the availability of water for management. This makes the adoption of water efficiency technologies not necessarily a good use of capital and investment for farmers, adds Puglia.

On the flip side, the State Water Board is enacting a new regulation in 2016 that may spur farmers to adopt water technologies sooner than they’d choose otherwise, according to George, who is also speaking at the Israeli-California Water Conference. Under the new regulation, water users who withdraw more than 10 acre-feet of water per year from surface water supplies must measure and report that diversion.

After the regulation takes effect and after the Sustainable Groundwater Management Act is implemented, the state will create a data set to assist law and policymakers with making difficult decisions about how to use California’s limited water resources.

To support its new water management requirements and to facilitate the development of a statewide data set, California will need better, more durable, and more accurate equipment, as well as automated smart controllers that can turn the data into actionable insights and automated management plans.

“One of the reasons the legislature instituted the new statutory regime is because they recognize that new technology was bringing accurate measurement, recording, reporting, and response within reasonable financial reach. As importantly, however, lawmakers recognize that we need to do more, make greater progress, and bring costs down further in order to meet our water management challenges,” says George.  “These new laws should assure a growing market to induce even more innovation in precision agriculture, which is the viable future for California agriculture.”

California’s State Water Resources Control Board is responsible, among other things, for administering a complicated water rights system based on long-standing and often obtuse laws. Although many describe the state’s policy with the catch phrase, “First in time, first in right,” George cautions that it’s far more complicated than the slogan suggests.

The Delta Watermaster sees the physical infrastructure that houses the state’s water, and the legal infrastructure that regulates it, as facing consistent strains season after season.

His bottom line? Agriculture is facing new challenges to achieving profitability during a time when water sources will remain severely constrained. George thinks California’s farmers and ranchers will eventually recalibrate to meet the demands of this new normal, but that the transition won’t be without its growing pains.

Fortunately, he sees a few tools that can make the process a bit smoother for some farmers.

“Technology is incredibly important. The old saying is true: ‘You can’t manage what you don’t measure.’”

For agtech entrepreneurs, investors, and farmers, that comes as very good news.

Are you attending the ICWater Conference? Let us know! Tweet us @AgFunder, tag us on Facebook @AgFunder, or drop me a note: [email protected] sharing your highlights and takeaways.

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