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Identifying water risk is crucial to ensuring your organization is protected from unexpected shifts in water supply, demand, quality, or cost. Threats to a water district, farmer, agricultural lender, appraiser, real estate broker, investor, and community member take many specific forms depending on what you do and where you operate. However, there are broader conditions and indicators that impact everyone: 

  • Groundwater Basin Condition 
  • Available Surface Water Supply 
  • Water Demand 

On the horizon, the Sustainable Groundwater Management Act (SGMA) will impact how we understand the above conditions, but focusing on the present can prepare us for the SGMA future. 

Groundwater Basin Condition 

As you may have noted on the free map, many of the areas that produce the most agricultural products and value are also in some of the highest priority (indicated in red on the map) groundwater basins. When you click on the map, the specific groundwater basin is identified in the left side-bar: 
Screenshot of GSA Information

The Department of Water Resources investigated historical conditions of the groundwater basin and determined a ranking system for each basin. The high priority basins were the least healthy and are first to be subject to SGMA’s Groundwater Sustainability Plan (GSP) requirements. Areas that are high priority are be more likely to experience reduced groundwater pumping through regulatory restrictions until the basin reaches sustainable yield. The potential for reduced groundwater pumping is an indication of risk for operations that rely on groundwater during dry and even average precipitation years. 

Available Surface Water Supply 

Surface water reaches water districts in various ways. Some districts rely on the State Water Project or the federally operated Central Valley Project for water deliveries. Other water districts rely on the natural cycles of nearby rivers, or on contractual obligations for water banking, transfers, and exchanges. Accounting for the supply of a water district over time, during dry, average, and wet years indicates the ability for that water district to supply water to their customers in various climatic conditions. By combing through water district, state, and federal datasets on water deliveries, one can piece together a picture of how a district manages water in dry times and the not so dry times. The less water available means a higher risk to operations within that water district unless that operation has access to alternative means of water or can reduce its demand without reducing viability of an operation. 

Water Demand 

After acknowledging water supply, it is equally important to understand the water demand for a water district, GSA, or parcel of land. Planting crops like almonds, grapes, and other permanent crops can have a high impact on water demand per acre. Other factors such as soil type, drainage, and irrigation efficiency also impact water demand. If a water district has a generous supply of water but the operation has an equally generous water demand, then the two factors may cancel each other out.  

Combining the Three to Identify Risk 

Each indicator is important to review but analysis of the three indicators together and understanding their relationships produces better results. For example, if an agricultural lender is looking at two parcels of property:

  • The property that contains 80 percent almonds in a high priority basin, with a water supply sourced from one river that provided next to nothing during the drought is a high risk.
  • A property with 60 percent almonds in a medium priority basin, and serviced by a water district with multiple sources of reliable surface water is less risky.
  • Weighing the importance of these relationships to your specific operation in light of the myriad of variables impacting your operations is an ongoing, essential practice for identifying water risk.

Taking Action

Utilizing the indicators described in this article and our free map allows you to start identifying potential water risks. There is much more data and analysis required to get a full picture of water risks which is why AQUAOSO created a research tool to advance your organization’s ability to identify potential water risks. Contact AQUAOSO Today to discuss how our software can help you!

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