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Power woes could cut produce supplies, hike prices Filed: 03/09/2001
By LESLIE GORNSTEIN
AP Business Writer
LOS ANGELES (AP) — Agricultural products ranging from cotton to lettuce could cost consumers more within the year, thanks to California's ongoing energy crisis, farmers said Thursday.
Allotments of water for the 40 percent of California farm acres dependent on state or federal supply programs are expected to linger at a miserable 15 to 40 percent of normal this April because of the low snow pack and reduced precipitation in mountain areas.
That could force farmers to use 30 to 50 percent more electricity to pump water from underground reserves.
Rather than face increased power bills, some farmers say they'll cut back on production, which could lead to increased consumer prices.
"As a result of the energy crisis, some growers may be going away from certain crops, and that will lead to higher prices," said Jim Crettol, owner of a 2,600-acre farm in Wasco, Calif., near Bakersfield, where he grows sugar beets, cotton and grapes for wine.
Farmers said they expect power prices to increase even more this summer because of new long-term contracts struck between Gov. Gray Davis and major suppliers.
The state has been working for months to alleviate the crisis, spurred by struggling utilities trapped between legally imposed price caps for customers and soaring electricity prices on the spot market.
Doug Carter, who owns a 3,000-acre farm in McFarland, Calif., north of Bakersfield, says he won't plant cotton this year — or any other field crops — because he doesn't want to pay for the power needed to irrigate.
"You go to the coffee shop and people say we could get a 50 percent allotment (of water), if we are lucky," said Carter, who gets most of his water through a federal program. "We have had 'Miracle Marches' in the past, when there has been a lot of rain, after all. But with the whole energy situation and the fuel costs and natural gas shortages, it doesn't look good."
Just how much more consumers might have to pay remained uncertain.
But if farmers this year choose not to plant key crops, the supply shortage could lead to increased prices at the supermarket, according to Loron Hodge, executive director of the Kern County Farm Bureau.
The bureau serves about 2,000 member farmers in one of the state's biggest agricultural hubs.
The state Department of Water Resources, which provides water for about 7 percent of California's farms via its aqueduct, said Thursday that spring allotments are expected to be 80 percent lower compared to the past six years.
State officials hope that projection will improve to 75 percent within the week, thanks to recent storms. Meanwhile, some farmers said they had heard from local irrigation districts that they could get as much as 40 percent of their allotment by April.
The 30 percent of California farms that get water from the federal Central Valley Project are also hoping to see their estimated allotments increase from 15 percent to 40 percent by spring.
Farmers could opt to shell out money this summer for the power to pump from water reserves. But they would not be able to pass those costs on to consumers because produce prices are based on supply and demand, not production costs, farmers said.
Recent rain and snow storms were not expected to ease the situation.
The latest estimate shows a snow pack of more than 80 percent of normal in the Sierra Nevada. But state law requires much of that water to go to salmon and smelt conservation programs before being allocated to farmers.
Crettol expects to spend 15 to 25 percent more for electricity this summer.
"Where we get the money, who knows?" he said.
-- Martin Thompson (firstname.lastname@example.org), March 09, 2001