State groundwater law drives 85% of surveyed small farmers toward shutdown, report finds

Eighty-five percent of 170 small farmers surveyed in the San Joaquin Valley said they are concerned they will have to shut down under California’s Sustainable Groundwater Management Act, according to a report released by the California Alliance with Family Farmers and the UC Agriculture and Natural Resources Small Farms Network.

“They’re actually reducing the amount of food that they’re producing,” said Alyssa DeVincentis, one of the report’s authors, during an August 3 webinar discussing the findings. Some are “cutting their farms in half, or more.”

The law, known as SGMA, requires local Groundwater Sustainability Agencies to develop plans preventing six “undesirable results” tied to depleted aquifers — subsidence, degraded water quality, dropping water tables. The report argues the loss of small farms is a seventh undesirable result.

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The San Joaquin Valley contains roughly 34,500 farms. About 77% — roughly 26,500 — are considered small, with fewer than 100 acres of irrigable land, according to the Public Policy Institute of California.

The three-year study included on-farm meetings, workshops, and statewide surveys. “The findings are consistent and concerning,” the report’s executive summary states, particularly regarding farm shutdowns and reduced food production.

Larger operations don’t feel SGMA’s impact as severely despite a far greater effect on groundwater depletion, the report finds. “In the critically overdrafted Tule and Tulare Lake subbasins, over 40% of pumpers account for only 1% of total water use,” it states. Researchers say that 40% is made up mostly of small farmers.

That 40% faces the same pumping cutbacks and fees as larger, better-resourced farms. Fees in the valley’s most critically overdrafted basins can reach $500 per acre-foot, with significant penalties for exceeding a farm’s allocation.

A modeled example in the report: a $300-per-acre water cost consumes 94% of a 10-acre farm’s profit, compared with 34% for a 1,000-acre farm.

“I think something at the heart of the concern with allocations is that every agricultural user is being treated the same,” said Ngodoo Atume, an academic coordinator with UC Agriculture and Natural Resources and report co-author. “Small farmers are typically not the ones contributing the most to that overdraft within the subbasin.”

Large landowners can buy more land to offset new pumping costs, said Catherine Van Dyke, CAFF’s director of water policy. “They’re like, ‘OK, well, I’ll leave that portion aside.’ Small farmers just don’t have that capacity.”

More than two-thirds of surveyed small-scale farmers work fewer than 50 acres and many are tenants. GSAs often send ballots, information, and fee notices to landowners, overlooking the actual water users. Missed communications can lead to billing surprises devastating small farmers.

The Breakdown

• SGMA mandates that local Groundwater Sustainability Agencies develop plans to stop six “undesirable results” from depleted aquifers: subsidence, worsening water quality, plummeting water tables, and three others.
• GSAs typically charge fees based on how much a farm pumps — fees can reach $500 per acre-foot in critically overdrafted basins, with penalties for exceeding allocations.
• The report finds pumping allocations don’t distinguish between low-impact users (small farmers) and high-impact users (large operations), despite small farmers accounting for a disproportionately small share of total groundwater use.
• In the Tule and Tulare Lake subbasins, over 40% of pumpers — mostly small farmers — account for only 1% of total water use, yet face the same fee structure as large operations.
• The report recommends GSAs identify small-scale farmers by groundwater use, community value, and financial vulnerability; it also suggests state funding for outreach and technical assistance to small farmers and support for transitioning to less water-intensive land uses.

What This Means for You

SGMA is state law. How local agencies implement that law determines which farms survive and which don’t. If small farms producing food for local and regional markets shut down at the scale this survey suggests, the consolidation reshapes what’s grown in the Central Valley and who grows it.

What to Watch

The report frames this as a design flaw, not an accident: pumping allocations treat a 10-acre farm the same as a 1,000-acre operation, despite vastly different resource bases and contributions to overdraft. A $300-per-acre water cost eating 94% of a small farm’s profit versus 34% of a large farm’s profit is not a marginal difference — it’s the difference between viability and closure.

Small farms don’t have the option large operators do — buy more land, leave a parcel fallow, absorb the cost elsewhere. They either pay fees that consume nearly all their profit, or they shut down.

The report recommends state funding for outreach and support to help small farmers transition to less water-intensive uses. Watch whether the legislature funds the mitigation the report says is necessary, or whether it leaves small farmers to navigate a system the report’s own data suggests is structured around large operations’ capacity to adapt.