Wells are running dry in Southwest as foreign-owned farms feed cattle overseas
lite.cnn.com
lite.cnn.com
In Warren Buffet's explanation he uses selling farm land as this exact example.
Of course under free trade we would expect foreign buyers to own bits of land. The challenge for America: these are not land swaps. America is not buying up bits of land elsewhere. Instead America is selling these bits of land for trinkets.
The US Dollar is a global reserve currency. Which in the abstract sounds nice to have other countries sell US things in exchange for more US debt: but in practice that means selling assets. US Government Bonds or US Farm Land. Both are assets openly traded.
The issue is not foreigners. The issue is America is running up a debt and is selling the farm.
The other issue you've touched on is a mistake that even economists make, which is to conflate the freedom of trade with the free movement of capital. These are two entirely different things. If you buy something, that's trade. If you sell land, that's the movement of capital. You can and should have policy that honors that distinction.
About the time the TPP was being rejected, I saw this comic [2], which honestly is worth a read as it explains pretty accurately this distinction.
Another angle to this is debt trap diplomacy [3].
[1]: https://en.wikipedia.org/wiki/Triffin_dilemma
American investors incl. Private Equity are still owning and buying up quite a lot of foreign companies. European countries are quite afraid of the pockets of American PE and VCs to gobble up the most promising or profitable businesses.
A great many countries don’t allow foreign nationals or foreign corporations to own land. Most you can get is a long term lease.
>>"You can't take water and export it out of the state, there's laws about that," said Arizona geohydrologist Marvin Glotfelty, a well-drilling expert. "But you can take 'virtual' water and export it; alfalfa, cotton, electricity or anything created in part from the use of water."
Seems it is time to put a stop to a LOT of that. Fortunately we already are returning semiconductor & other mfg. Must keep this up...
Even if, and especially if, a mfg process is highly automated, it takes myriad layers of expertise to get it right. That is the LAST thing you want to ship overseas to your adversaries, which both increases their expertise in the field and your dependence on them.
Economically, it is long-term-stupid. Strategically, it is suicide.
The purpose aligned pretty much with your observations and the utility of this was involved in building a billion+ of devices.
I did see one case where it sort of made sense to offshore to China, and then only to have production near some other markets. The company literally prepared and shipped only the final secret input chemical and it's curing agent, to be mixed in a certain ratio, poured into a big vat, then cut into slabs. They were still wicked nervous about it, and I don't think the arrangement lasted long.
Even if all the components are made here, with all the materials engineering, CNC machining, molding, forming, fabrication, etc. done here, and only final robotic assembly done in China, that is still a non-trivial skill to program and maintain those robots. And at that point, it's only a few experts, so why ship it and not keep it here?
They made sure that the availability of components for all these global (mostly US it seems) companies wanting to rent time in their factories would face minimal supply chain difficulties, by making the component availabilities a local thing.
It's very orthogonal to all you mentioned, which I agree is logical. Also, programming the robots could be done domestically, then binaries of the programs run in the contract manufacturing facilities. Point is, I think what you emphasize actually has long been a priority.
I can't comment for the rest of the world, but US corporations are certainly buying up farming and forestry land in my country, New Zealand:
https://www.nzherald.co.nz/business/united-states-buying-up-...
Incidentally the debt America is running up is ultimately owed to the Federal Reserve, which is a creature of the US government. There are major unsustainable problems with US economic policy, but Congress borrowing from a bank that it controls[1] isn’t one of them.
[1] As Dune taught us the power to destroy a thing is the power to control it, and Congress can assuredly destroy the Fed.
What I always said about the Bush wars. For the cost of those wars, we could have bought all of rural Canada.
US would be better off if land was owned by the people and reclaimed by the people after a generational time period.
Part of why China now has a imploding property market is that governments got addicted to leasehold revenues to keep taxes low, and so encouraged a lot of artificial scarcity. Affordability is much worse there; house prices in NYC are 10.5x income, SF is 12, LA is 13.
Shanghai has a house to income price ratio of 47
It looks great in China and Singapore because, well, the leases haven’t run out yet.
They’ve just started to in Singapore and the end result is “you have until the end of the month to leave and you receive $0 compensation”.
As a result they have to spend a ton of money on social housing and create massive disruption in the lives of seniors.
There is no free lunch here.
(it's quite bizarre how this story seems to have brought out a desire on HN for Soviet levels of state controlled farming!)
And nothing about our current land use and tax policy results in good land use. It can, at best, result in good land use for some of the people owning it, but that doesn't optimize for what is good for anyone else.
If you let the situation rot too much, the same factors that drove that revolution can result in similar political instability. I don't believe we are close to that point, though.
[1] Of course, ironically, a coup backed by a strong public desire for peace resulted in a civil war which was in every respect worse than World War I for every participant.
https://grist.org/article/the-butz-stops-here/
many American hippy environmentalists cried in pain, since some of these farms are their birthing grounds; but in the mix was a hopeless morass of post-Civil War small holders with provably dysfunctional operations, and the promises of Big Returns for Big Capital on the other side of that fence -- where the grass is always greener.
The land remains in America subject to American law which is decided by American voters. The value of the land can be recovered for Americans by e.g. taxing it and spending the money on services for citizens.
Not a libertarian anymore, but this sentiment has nothing to do with libertarianism. You also can't recover something like water with taxes. It takes years to refill those aquifers if you begin overusing them.
Edit: Very disappointing to see reductive politics do so well on here. Keep in mind, Libertarians only have ever garnered 1.2% of the national vote. Your dishing is literally just a signal of your own shittiness.
Thousands of years if not longer in the case of fossil aquifers. In regions where the aquifers are capped by an impermeable layer, rain water does not replenish the ground water at any meaningful speed. In these regions, using ground water is unsustainable no matter how much money you're charging for it or what you're using it for. Some of these aquifers were filled thousands of years ago during climate conditions drastically different from today, and these will never refill under present or foreseeable climate conditions.
Let people farm there using the finite water supply and they'll make a lot of money up front, but that gravy train has to stop eventually. But by the time the water runs out they've made a lot of money, and probably use that money to lobby for wetter regions to hand over their water too.
Tapping fossil aquifers should be illegal. If you can't make due with surface water and/or aquifers that refill regularly from surface water, then you should go somewhere else. Don't farm in deserts.
https://revealnews.org/podcast/high-and-dry-a-deep-dive-into...
https://www.npr.org/sections/thesalt/2015/11/02/453885642/sa...
He's also a producer/face on a new documentary making the rounds at film festivals this year:
https://www.imdb.com/title/tt21820452/
There's a trailer on https://www.docnyc.net/film/the-grab/ as well as online viewing in mid-November. I haven't seen it yet, but it's been well-received thus far.
Which, in and of itself, is not necessarily a bad thing, but it is when water is essentially so mispriced that it's a really bad deal for the place that is supplying the water, especially during a mega-drought.
The article is very much pot, kettle black. Agriculture is using the majority of the water and mostly for growing alfalfa to feed cows. Everything there is wrong. We don't need that many cows. If the town wants to save itself, it must start water-rationing for agriculture, and ban a lot of alfalfa growing.
Or more effectively (because it is much simpler and can’t be gamed nearly as easily), price the water appropriately based on the sustainable supply. Then it will not be profitable to use at huge scale for low-value water-intensive crops.
If fairly pricing the water ends up hurting local residents, that would best be dealt with by directly paying cash to every resident to make up the typical difference.
(We should do the same with other resources that are scarce or have negative externalities; e.g. gasoline should have the environmental costs of carbon emissions priced into it with a very steep tax, and then every resident should be directly paid cash enough to make up the difference for a typical person’s transportation. Otherwise, people are incentivized to over-use resources that are effectively being subsidized, and the free market economy cannot perform its function.)
In the regions where the water problem is most relevant, pricing based on the sustainable supply isn't possible because the water supply isn't sustainable, and won't be no matter how much you charge or how little you use.
I don't agree with the solution advanced in the linked video of paying farmers not to grow alfalfa. I think we should reduce the cow population by 75% (bringing meat consumption in line with the rest of the world), raise the price of beef, and tax the hell out of it. We do it for tobacco, and meat eaters put the same kind of strain on the health system, so let them pay for their entitlement. And saving water isn't the only benefit of reducing the population of cows, which would include longer life spans and much, much less contribution to Climate Change.
That's pretty easy to do with graduated rates, where customers are charged a low rate for the first X gallons of water, but then higher rates for more usage.
The bigger issue, though, is water rights are completely fucked. In a lot of jurisdictions you are free to suck out any water you can with a well on your property. That means those with the "strongest pump" are essentially free to suck out all the water from their neighbors. Our system of water rights in the West needs a major overhaul that won't be easy due to entrenched, powerful interests and the difficulty of changing some of these laws.
The average American eats 55lbs. of beef a year, 4.5lbs. a month, over a pound a week. I guess we can wait until they all have massive coronaries, but it would be better to just stop this madness and restrict these eaters to 3 quarters of a pound of beef a week.
I completely agree, which is why I said that graduated rates are a good solution - they would tax agricultural (and any heavy user) heavily while leaving residential use cheap.
However, I'm also not in favor of other solutions that are complete fantasies when it comes to our political system. You say "but the easiest and best solution is to adjust population diet, curb agricultural greed and entitlement, massively reduce the population of cows, raise the price of beef and tax it." Except that is a guaranteed political non-starter in essentially every country that has high beef consumption.
50 years ago everyone smoked. What we need are Surgeon General reports linking eating red meat to cardiovascular disease, coronary heart disease, stroke, type 2 diabetes, and especially colon and rectal cancers, which shouldn't be too difficult because it's true. Then we need ad campaigns, "Mmmm meat! Tastes just like cancer!" Then all that is needed is for the American Heart Association, American Cancer Society and American Diabetes Association to sue Tyson, JBS, Cargill, and National Beef, to find they lied to the American public about the deadly effects of their product, which they intentionally marketed to children - the meat food group was always bullshit. Then comes taxing red meat and the collapse of these industries, because unlike nicotine, red meat is not addictive. Viola! Suddenly there is more water in the West than they know what to do with. Ranchers, cowboys, cattlemen and meat processors are retrained to work at all the water parks and recreational reservoirs that could then exist throughout the West, drawing in fortunes in recreational boating and tourism.
There are observational studies demonstrating a correlation between red meat consumption and various health problems, but risks involved from eating red meat vs. smoking are not remotely comparable, nor is the scientific evidence anywhere near as convincing.
Nor does some people eating meat directly affect others’ health, the way smoking in enclosed indoor spaces does.
It would be better to give people truthful information about what risks are known and what our confidence is in those, rather than trying to scaremonger or force lifestyle changes based on exaggerated health claims.
Climate risks and environmental externalities are a much bigger problem with red meat than direct health effects. (And a better cause for ending subsidies / adding taxes.)
If you are just worried about health per se, it would make much more sense to start by targeting soda and alcohol, and follow up by targeting candy, cookies, chips, etc. Even in fast food restaurants, the fries and soda are a bigger health problem than the burgers.
The World Health Organisation has classified cured and processed meats as Group I carcinogens because there is a causal link between consuming these meats and bowel cancer. Group I carcinogens also includes tobacco, alcohol, arsenic and asbestos, all known to cause certain cancers. WHO classified red meat as Group 2A carcinogens, indicating it most likely causes cancer.[1] Group 2A carcinogens includes alcohol, benzine, diesel exhaust, and formaldehyde.
And having that many cows around hurts everyone on the planet, vegans included. There's 94M cows in the US, or 1 for every 3 people. But it would take 4 people eating 55 pounds of beef a year to consume one 1400lb. dressed cow. On the face of it, there are, at the very least, 25.5M superfluous cows producing more than 5B pounds of methane every year while consuming 46.5B pounds of alfalfa requiring ~7.2B gallons of water to grow.
Say what you will about smoking, but no one ever tried to grow tobacco in a desert during a drought.
And I'm not sure soda consumption is a significant contributor to Global Warming. The health concern is the meat eaters' incentive to quit, while I'd like it to stop being so damn hot and killing everything for the sake of meat gluttons indulging themselves. Eating meat is not any kind of virtue, and it is certainly not more important than the biosphere. For the sake of life on Earth, I can live without people eating so much damn meat all the time.
[1] https://www.hsph.harvard.edu/nutritionsource/2015/11/03/repo...
Definitely. The less red meat eaters the better, so do your best to eat as much as you can.
The only solution is limit ground water extraction. Putting this on foreign owners dodges the solution no one wants to talk about.
Fresh water at the moment is not a short-term renewable resource. In some places fresh water takes a long time to correct when there is an input/output imbalance.
So just like any non-renewable resource, particularly one vital to life and food, it should be guarded as a local and national security asset.
The article is very focused on the "evil foreigners" angle, which is understandable. I also do not like Saudi Arabia buying up farms and exporting water. But this problem is a tiny subset of the overall problem, which is unsustainable water use. I am concerned that by focusing too much on the evil foreigners, we'll end up with a solution targeted at the evil foreigners, or exporting alfalfa, and we'll end up with the same farms growing alfalfa for cows in California or Arizona which does not solve the problem at all.
What we need is to cap all water usage to sustainable levels, ideally with a cap and trade or market system which would incentivize investing in water conservation and encourage efficient land use. Given how climate change legislation has gone in the US we'll probably end up with the worst water uses being banned, and subsidies for better water uses. It's politically easier to pay people for good outcomes than to charge them for bad ones.
The irony!
It's one in a series of several articles on climate change and megadroughts [3].
[1] https://grist.org/regulation/arizona-groundwater-cochise-cou...
No, while this assumption seems econ 101 logical for a second, it’s not really true and the paper I linked above explains why. The pricing has to match the approximate order-of-magnitude cost of externalities for it to actually prevent any of the consequences we’re discussing here (or more likely be regulated so that Saudi Arabia can’t buy all the water regardless of price). There’s enough price flexibility over water and high enough demand that increasing prices 2x or even 10x today will not slow consumption at all. Water in the US west is already over-subscribed, and people with more money have already lined up to buy whatever becomes available. Increasing prices a little will only change who buys water, not whether it gets used. It has to be high enough that people start choosing not to buy it, which with water is an extremely high bar. In the mean time, draining our aquifers has ramifications for the next several thousand years.
This is the whole problem with cost-benefit analysis and free market thinking. When it comes to things that all humans need, like air and water, we have never yet managed to calculate either the true costs or the true benefits correctly, and reducing the equation to money loses all sense of proportion, and more or less always frames things in terms that let rich people and corporations win and take whatever they want.
Yes, there will be large demand for water even at higher prices. But less than at lower prices. Maybe a little less, maybe a lot less, but either way we are better off than now.
Also, there are many other effects to consider besides how much the demand will change. As the price increases, alternative water sources become more economic - trucking water in, building pipelines and canals, building water capture systems, desalinization, etc. Rather than solving the problem by using less water it may be possible to solve the problem by using water that has less environmental impact.
Generally speaking, I find your framework hard to parse. Free market thinking and cost benefit analysis are orthogonal, not two parts of a whole. Pricing externalities, as we are discussing here is not the same thing as cost benefit analysis.
Cost benefit analysis is a bureaucrat sitting in an office and deciding what policies should be enacted. Pricing an externality means assigning a cost to use of some scarce resource, and letting the market decide if and when the resource is worth the cost.
That’s just assumption, and history has sometimes proven this assumption wrong. Higher prices do not automatically yield lower demand. It may take a threshold price increase before consumption changes at all, especially for scarce resources.
It’s true that alternatives change the equation, that I agree with. But the problem with allowing the market to sort it out is that Saudi Arabia might always be able to afford more than small town, Arizona. If you raise prices, you might only price out the locals and surrender your water to foreign interests. Charging money is in no way certain to fix this problem, it might make everything even worse.
> Pricing an externality means assigning a cost to use of some scarce resource, and letting the market decide if and when the resource is worth the cost.
What you just described is cost benefit analysis followed by free market thinking, definitionally speaking.
A cost-benefit analysis is the process of comparing the projected or estimated costs and benefits (or opportunities) associated with a project decision to determine whether it makes sense from a business perspective.
Generally speaking, cost-benefit analysis involves tallying up all costs of a project or decision and subtracting that amount from the total projected benefits of the project or decision. (Sometimes, this value is represented as a ratio.)
That is simply not the same as applying a tax or surcharge to something to internalize an externality.
It doesn't matter if these soybeans are going to China, Mars, or Washington state, the only thing that matters is whether the people growing them are exhausting their region's water supply.
Almonds is really the only contentious item on this list as they are grown in areas with water insecurity.
https://ipad.fas.usda.gov/rssiws/al/crop_production_maps/US/...
The midwest (not counting Arkansaw in that set, and just going from the labeled state numbers) makes up at least 80% of the total soybean production (Wisconsin and Michigan aren't labeled).
You will note not even a pail yellow on anything west of the Dakotas.
If we want to talk about water... check out rice production. https://ipad.fas.usda.gov/rssiws/al/crop_production_maps/US/...
Though there's some other interesting parts on that - https://www.npr.org/transcripts/1019488080
This is how all civilizations traditionally cultivated grasslands -- as lands on which ruminants were raised, and then you drink the milk and eat the meat of the ruminants as your main source of calories.
Trying to raise crops on arid cattle country requires you to deplete aquifers and then import large amounts of fertilizers because the land itself can't sustain that type of production. It can, however, sustain growing grass, with no fertilizer or water additions required. Then as the ruminants eat the grass, they fertilize the soil and the roots decompose, adding more nutrients. Do that over many generations, and you create a rich soil, and on the rich soil, a few crops can be grown, and then they need to be replaced again with grass and cattle.
The decision to grow millions of acres of soybeans and corn in this desert is a short sighted policy. Milk and meat need to be food products from that region, given the climate. East of the Mississippi, there is a wetter climate, and that's where we should be growing most of our crops.
Corn production: https://ipad.fas.usda.gov/rssiws/al/crop_production_maps/US/...
https://www.cropprophet.com/soybean-production-by-state-top-...
Alfalfa is a uniquely bad crop to grow in dry areas. It uses up a lot of water, and there's nothing special about alfalfa from the Western US - it goes to feed cows and there's plenty of other ways to feed cows.
There's no real reason to create laws specific to foreign-owned farmers, or alfalfa. Just make farmers pay the same amount for water as anyone else pays.
In the treaty that ended the Mexican American war, the US agreed to respect all Mexican land grants. Those grants are still enforced by US law.
Of course with eminent domain the government might be able to seize water rights (i don’t know) but owners would need to be paid a fair cost for the loss of those rights.
Groundwater is the lifeblood of the rural Southwest, but just as the Colorado River Basin is in crisis, aquifers are rapidly depleting from decades of overuse, worsening drought and rampant agricultural growth.
Residents and farms pull water from the same underground pools, and as the water table declines, the thing determining how long a well lasts is how deeply it was drilled.
Now frustration is growing in Arizona's La Paz County, as shallower wells run dry amid the Southwest's worst drought in 1,200 years. Much of the frustration is pointed at the area's huge, foreign-owned farms growing thirsty crops like alfalfa, which ultimately get shipped to feed cattle and other livestock overseas.
"You can't take water and export it out of the state, there's laws about that," said Arizona geohydrologist Marvin Glotfelty, a well-drilling expert. "But you can take 'virtual' water and export it; alfalfa, cotton, electricity or anything created in part from the use of water."
Residents and local officials say lax groundwater laws give agriculture the upper hand, allowing farms to pump unlimited water as long as they own or lease the property to drill wells into. In around 80% of the state, Arizona has no laws overseeing how much water corporate megafarms are using, nor is there any way for the state to track it.
Essentially, this means that in most of Arizona, the water in the ground is free and unmetered for agricultural use by anyone who owns enough land to drill a well. As one would guess, this creates a crisis when some users are drawing enough water to lower the water table on surrounding land.
It is not a new thing for some wells to run dry because of neighbors' water use. And it isn't catching anybody by surprise. There's a whole lot of gunfighters flowing into these here parts. Uh hem, sorry. I mean lawyers.
Note that unlike the other states you mentioned, the standard in Arizona is "reasonable use". Texas is the other big outlier. Do you have links (or good search terms) for the recent judgments you refer to? I know some things about this area (certainly enough to call it "complex"), but there is a lot I'm ignorant of.
Great Basin Water Network court case
SNWA water war
Snake Valley production wells
Tribal leaders oppose southern nevada water
If you are a non-native English speaker, you probably want to avoid this term unless you are conscious that many readers will code you as "progressive left". It's not as strong as "Amerikan" (sometimes used to imply Americans are Nazis), but it has a similar register.
Here's an HN thread from a few years ago about it: https://news.ycombinator.com/item?id=9994159.
I've come to accept that I am pedantic. I use phrases like "Native American" to avoid ambiguity, not for any political correctness. I don't refer to anything east of Colorado as the Midwest. I sometimes call cornets trumpets but mostly because I am ignorant. Mostly I find that it's less work to use accurate language instead of long clarifying explanations. But you got me this time.
If we agree that overconsumption of groundwater combined with under-replenishment of all frewshwater resources due to climate change implies a coming strategic shortage of water, then yes, absolutely, state and federal government should be severely scrutinizing where water is going and prohibit excess water consumption for luxuries and for exports.
Another way to go about it would be what the person above you said: Create tiered pricing for water such that the reasonable monthly use of water is as close to free (minus upkeep of water infrastructure) as possible, while quickly ramping up marginal cost.
On the former Soviet Lunar prison turned colony, electricity, water, and air are,by necessity not free.
According to Native Americans, we already did that.
Are you suggesting export controls on vegetables?
But sure, we can declare any kind of export control we determine a state interest in. Other people can play even better word games than you just tried to, to articulate both the problem and a response. You didn't show how it's an invalid idea at all.
If these things happen to produce a side effect that it's not profitable to use that piece of land to grow almonds or grass or whatever, so be it. You still didn't confiscate anyone's property that they ever had any valid right to in the first place in the libertarian fearmongering sense.
Or you could mark the water resource as public and go ahead and confiscate the property for some reasonable market value (not a value based on selling a valuable public resource). It's not inconsistent with property rights and free markets or anything like that even if you do decide you have to plain take over something.
Unless by regulate you mean ban, none of that will make a fossil aquifer sustainable. The best you can do is push back the date the water runs out, but the water will run out. You can't call it sustainable just because it lasts longer than your lifetime. By that standard, coal mining was "sustainable".
In regions with regular rainfall where shallow wells suffice, sustainable use of groundwater is simply a matter of balancing inflow with outflow. But in regions where aquifers are deep and sealed, or were filled thousands of years ago when North America was covered in a mile of ice, you cannot use the water and balance inflows and outflows because inflows are effectively zero. The only way to balance inflows and outflows of fossil water is to ban the use of fossil water.
Also, I don't immediately see why depleting a fossil aquifer would be bad (as opposed to using coal or oil, which affects CO2 levels). Do I miss any side effects? If not, it might be reasonable to use fossil water as long as it is available to make a region liveable, but restrict its use for e.g. agriculture, to make the water last longer.
I mean regulate, as in devise some rule. The exact details are open ended and infinite. You could make up any kind of rule that says what the water may or may not be used for, how much may be extracted per time period, require other things that will eventually lead to the creation of some other water source while this one is being consumed, etc.
All kinds of things.
Under such a theory this issue actually is regarding individual freedom.
But sure, ignore that context when over-analyzing my response.. ;-)
Also, not sure why you felt the need to take a shot at me in the end there. Apologies if my words offended you somehow?
And it's important for policymakers to have the context that international trade considerations have introduced incentives to the region that may not have been present beforehand - as a result, one should not simply say "we never needed to regulate this before" because there are material changes to the situation.
Are we to believe the water usage would be less if Americans owned the ground?
With all of this, Gary Saiter doesn't care if the farm is owned by a company overseas. The way he sees it, it doesn't make much of a difference who owns the farm; he just wishes they were better neighbors.
"I am kind of ambivalent about the Saudis," Saiter said. "You can't control where people sell stuff, and it's going to go somewhere."
"I just don't like the crops they're growing and the water they're pumping," he added.
The practical difficulty of transporting large amounts of water long distances is even worse than electricity, so I don't think it'll ever be easy to say "Minnesota has a water surplus this year, let's just adjust the pipes to send it to Nevada".
Awful idea. Why should the wet parts of the country pump their water into deserts where people shouldn't be living/working in the first place? If people want to live in deserts, let them find their own water. No other region should be obliged to supplement their unsustainable desert lifestyle. Let nature take her course and depopulate those deserts in due time. If you want water, move to where the water is.
Everyone benefits from specialization and trade. I don’t see any reason it wouldn’t apply to water too.