In The San Joaquin Valley, Hardly A Sprinkle

It isn't a cheerful group gathering around the dinner table these days at the Willie Rodrigues household. The vegetable grower, who farms outside Fresno, Calif., listens while his son Dennis wonders where the $1,000 will come from for new tractor batteries. Until then, he's forced to jump-start seven of the 15 tractors that are needed for the 3,700-acre farm. Another son, Bruce, hasn't taken his $1,000 monthly draw from the farm's income home to his family of three since December. And those woes may seem small if local lenders decide against giving the family the $1.5 million it needs this spring to plant tomatoes, peaches, and garbanzo beans.

California has declared its six-year drought over, but in the San Joaquin Valley, center of the state's $18.5 billion agriculture industry, it lives on. The two weeks of strong rain this winter that swelled reservoirs and piled snow on the mountains is only trickling toward the region's nearly 20,000 farms. Federal water officials are under heavy pressure from the Environmental Protection Agency, which wants to improve water quality, and are worried about the plight of endangered fish in the Sacramento River. So, on Mar. 12 they announced they will send farmers only 40% of the water allotments they got before the drought (table). The rest is being held against possible shortages.

SIGN FROM ABOVE. For the once-green valley, another year without water has brought many farmers perilously close to extinction. "If you don't have water, it doesn't matter how good you farm," laments Clay Groefsema, a garlic and onion grower 45 miles west of Fresno. Some 50 farms were shuttered in his region in the past two years. Now, local officials worry that many more could go down in the next year. As much as 10% of the land in the Westlands Water District, an area the size of Rhode Island, will be idled this year, district officials say. In that region alone, farmers expect to lay off 3,500 workers. Sales of fertilizer and farm equipment are down by 30% as farmers brace for the cutbacks.The bad news is being delivered to the valley's 100,000 workers by local banks. No longer confident that farmers will have the water they need, fewer lenders will ante up. Tenant farmer Dean Ferguson couldn't get a loan for the 500 acres he rented last year, and he won't plant this year at all. "You can't make financial judgments on the mere assumption the water is going to be available anymore," says Mike Fitch, a vice-president at Wells Fargo Bank in Walnut Creek.

The bankers have been burned before. In the mid-1980s, when the drought first hit, banks were forced to take losses on up to 6% of the $3.4 billion in loans they had issued to California farmers. At one point, as many as one in five loans was past due. Since then, overall ag lending has tightened up, and loans have fallen dramatically: In 1991, just $13.8 billion in ag loans was issued in the state, according to the U.S. Agriculture Dept., down from $17.6 billion in 1984.

Even for those able to swing a loan, life isn't simple. Tomato grower William Coit had to pony up 25% of his farm's $1 million in needed working capital--vs. 10% in the past--before the bank would finance the rest. With banks lending less, loans at Fresno's Prodco Finance Co. have jumped by 20%. "It's like God has pointed a finger at us and said, `you're it"' for making loans this year, marvels Prodco Vice-President Mark Turmon.

Worse yet, the days when farmers were guaranteed their full water allotment from the federal Central Valley Project aren't likely to return anytime soon. So far, farm lobbyists are fighting a losing battle in Washington and Sacramento against environmentalists eager to save such endangered species as the delta smelt and the winter run of chinook salmon. Boosting water supplies to valley farmers might harm both fish, which are protected by the Endangered Species Act of 1973. And many city businesses, fretting they won't have enough water, back the environmentalists.

SPRING HOPES. Still, most farmers will be able to hang on. Thirsty as many farms are, most are getting more water now than in the worst of the drought--when allocations fell to as little as 25% of normal. And more water may be available once the Sierra Nevada mountain snow runoff starts this spring. Up north, federal supplies to farmers have already risen to 65% of normal.

It may take a lot more, though, to get families such as the Rodrigueses off the endangered list. The family had greeted this February's heavy rain like a long lost relative, but now it's just one more disappointment. "I remember as a kid Dad bringing us out to this field," recalls Dennis. "He used to say, `this is where our future is.' Now, all we've got is dust." If relief doesn't come quick, that lament will echo through the San Joaquin Valley in the months to come.

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