Dan Keppen Executive
Director Family
Farm Testimony
Before the Subcommittee on Water and Power Committee
on Resources Oversight
Hearing on Environmental
Regulations and Water Supply Reliability Thank you for the opportunity to appear before you to discuss how the
Endangered Species Act (ESA) can impact the water supplies and livelihoods of
family farmers and ranchers. My name is Dan Keppen, and I serve as the executive
director of the Family Farm Alliance. The Today,
I would like to focus my comments on the on-the-ground impacts of the ESA to
farmers and farm families. While the membership of the Family Farm Alliance
spans most of the West, I would like to focus on some very specific examples of
how the ESA can impact the daily operation of a family farm or ranch. The
observations I will make today are based on my experience working in the I
moved to the During
my tenure with KWUA, I represented rural farmers and ranchers in communities
whose very existence relies upon the certain water supply developed 100 years
ago for the purposes of irrigation. I also directly witnessed the stress and
anxiety that rural families faced in 2001 and the troubling years since, the
drain on their finances, and the toll on their health. These farmers – my
neighbors and my friends – were impacted in almost unimaginable ways when
their water supplies were curtailed in 2001. Those impacts continue to linger
today, four years later. Klamath
Project Farming Thousands of
people make their living directly from farming and ranching in the Klamath
Project. In turn, their activities
support the communities of Malin, Merrill, Bonanza, The
irrigated farm land of the Klamath Project includes about 230,000 acres.
Of this, the great majority is served from diversions from Klamath
Project irrigation and refuges are, of course, only some of the many uses of
water in the much‑larger Historic
Operations For
90 years, Klamath Project reservoirs and diversion facilities were operated to
serve the authorized irrigation purpose of the Klamath Project.
There were no downstream Demand
for Change in Purposes of Operation
Starting
in the 1990’s, political and regulatory demands have affected activities at
the Klamath Project. For example,
in 1988, the short nose sucker and the In
late 1994, demands were made by various parties that Reclamation reprioritize
and reallocate water. In
particular, demands were made that Reclamation take steps to increase both Changes
to Klamath Project Operations In
1997, Reclamation made a fundamental change in the operation of the Klamath
Irrigation Project. Prior to that
time, Project reservoirs and other facilities were operated to ensure irrigation
deliveries; the authorized purpose of the Project.
In 1997, priorities were reversed, such that the Project was operated to
increase flows in the Klamath River (for NOAA Fisheries-driven coho salmon
purposes) and to maintain high lake levels in the Upper Klamath Lake reservoir
(for the sucker fish), with only the water left over being available for
irrigation and wildlife refuges that the Project had previously served for
nearly a century. In
more blunt terms, the Project was operated in a manner to promote the potential
for water shortages.
2001
Operations Plan On
Impacts
to the Community The types of
economic, human, and environmental suffering caused by the 2001 Plan were
catastrophic and well-documented. Hundreds
of farm and ranch families without income experienced hardship trying to support
themselves. Their ability to pay
bills and service debt was impaired. Similar
types of impacts occurred for farm employees, and for the owners and employees
of the agriculture related businesses. The
demand for social services increased. Some
people simply moved out. City parks,
schoolyards, and cemeteries went without water.
Farm fields became fields of weeds and dust.
Tremendous wind‑borne soil erosion occurred, impairing land
productivity and causing air pollution.
Irrigated
farmland provides food and habitat for the abundant waterfowl, deer, antelope,
and other species. This value was
also lost. Tragically, two of the
nation’s premier national wildlife refuges were left without water for
wetlands and waterfowl habitat. The 2001 Real
Impacts to Real People I also draw in this testimony from the observations of Greg Williams, the The impacts described below rely heavily on input provided by these two
individuals, who have direct, on-the-ground experience with real-world impacts
that tie back directly to agency implementation of the ESA. Their observations
will likely be replicated in other parts of the West should implementation of
the ESA or other federal regulations reallocate water supplies originally
intended for agriculture. The Income Tax Impacts - Inability to Establish Credit - Another financial impact to the
Carletons has been the loss of credit and inability to establish an operating
line of credit. The Carleton’s credit rating with their bank dropped in 2001,
and they were told that their bank would not refinance them in 2002. The
Carletons felt their only option was to file a Chapter 11 bankruptcy. Primarily
because of that action, and due to the uncertainty of future water deliveries,
banks have been unwilling to establish a line of credit for the Carletons. In
one case, they were told by a loan officer from outside the area that that
particular bank would not approve loans in the Developing Alternative Water Supplies - In January of 2003, the status
of water deliveries for the upcoming crop year was uncertain, at best. The
Carletons felt that if they were to keep on farming and have a viable operation,
they had to have assurance of a dependable water supply. With that in mind, they
chose to drill a well, even though they were short of money. Fortunately, the
well driller recognized and empathized with their dire situation and agreed to
let the Carletons delay payment of over $100,000 to drill the well. While the
Carletons were obviously pleased to have an assured water supply from this
source, the money that was spent could have been used to help pay for things
like fertilizer and fuel. That expenditure carried over into the next year, and
took away funds that could have been invested in the 2003 crop. In addition to the Carletons, there were others in 2001 who submitted loan
requests of $100,000 –$250,000 to drill and develop wells. Some of these wells
were dry or had inadequate water, which amounted, in essence, a waste of
resources. In other cases, well installation increased owners’ debt/asset
ratio, drained cash reserves, and did not appreciably increase the value of the
land. However, it may have given those landowners a safety net for the future.
Should there be another total cutoff of water, the Basin’s irrigated land,
without wells, could fall dramatically to dry land values. This would destroy
the balance sheets of Basin farmers, as well as diminish their ability to
generate income. On-Farm Impacts – The Carletons felt continuing on-farm impacts from
a year without water: §
Alfalfa crops that went without water in 2001 suffered a loss of
stand. Now, those fields must be rotated sooner than normal, which incurs
expenses sooner than normal. §
Expenses associated with weed control are now greater for the
Carletons and many Basin farmers, especially on those fields that went fallow in
2001. §
Because farm machinery was used sparingly, if at all, in 2001, and
also because only absolutely necessary repairs were made that year, farm
machinery needed extra repairs the following year. §
In some cases, crops that were planted in the fall of 2000 did not
survive the harsh conditions of 2001. Those crops had to be re-seeded, which
meant that farm ground had to be re-worked. Impacts on Ability of Farmers to
Generate Income. Capacity is defined as the ability to generate
income to pay annual operating expenses, service debt payments, and provide a
reasonable level of living for the family. The Klamath Project water cutoff in
2001 changed the ability of many farmers to repay these costs due to: 1)
Inability to grow a normal crop; and 2) Increasing expenses. The Carletons were not able to make payments on long term loans in 2002 or
2003. While the lending institutions recognized the rather unique, unprecedented
nature of this development, they did not foreclose. However, the interest on
these notes continued to accrue. So, instead of shrinking, the amount of the
loan actually increased, leaving the Carletons with a greater debt load. To
adjust, they were forced to dip into family savings to cover living expenses and
in some instances, those savings were depleted. Cumulatively, all of these new
expenses – directly tied to the 2001 curtailment of water - required money
that could otherwise have been invested in the current year’s crop. Impacts to Collateral Value:
Collateral is an important credit factor and includes assets to repay and secure
the loan. This may include a lien on crops, cattle, equipment, and real estate.
A water shutoff would cause the value of collateral to fall to the point that
customers may not be able to repay the loans from normal income or the sale of
collateral. If real estate becomes dry land, the income capacity of the land
will be limited to pasture or dry land grain, which typically is not profitable.
(For example, if potatoes are grown, the gross income may typically be
$2,700/acre. As a dry land farm, the income may only be $100/acre.) In other
words, if land value drops by 80%, many of the land owners will not be able to
either sell out or generate sufficient income to ever repay their loans. Uncertainty - The water cutoff has left Klamath Project irrigators in
a position of not knowing when the next "surprise" cutoff or reduction
in water deliveries will occur. This has impacted the capacity or repayment
ability of farmers, as they have taken a more conservative approach to crop
rotation. Many farmers now plant fewer acres of row crops (potatoes and onions)
due to the risk of having the water cutoff. In addition, tenant farmers now
prefer land with secondary water sources (i.e. wells). This adversely impacts
the landlords who do not have an alternative source of water. The Klamath Project Regulatory Regime is Peer-Reviewed The U.S. Bureau of Reclamation’s final 10-year Biological Assessment for
Klamath Project 2002-2012 operations properly incorporated the findings of the
2002 interim National Research Council’s (NRC) interim report, and generally
captured the essence of the “watershed-wide” philosophy endorsed in the NRC
report. Recommendation: Inject Peer-Review
into Critical ESA Decisions The NRC committee’s reports effectively found
no scientific basis for the 2001 cut-off to the Klamath Project. Proponents of
the agency decisions (opponents of the Klamath Project) correctly point out that
the NRC committee did not say the decisions were “wrong” or “arbitrary.”
And, they say, “Science is uncertain, we all know that: hence, no big deal.” The
Family Farm Alliance strongly affirm the goals of the ESA. However, this 30-year
old law could stand some targeted reforms, including common-sense changes to
make it work better, minimize confusion, and discourage litigation. We
support legislation that would require the establishment of standards for
scientific and commercial data that are used to make decisions under the ESA. We
believe that relatively greater weight should be given to data that have been
field-tested or peer-reviewed. The former requirement would help clarify when
such things as “personal observations” or mere folklore are considered by
the agencies to be reliable enough to make decisions with potentially profound
effects. We support peer review of ESA listing decisions and ESA section 7
consultations by a disinterested panel, and we believe legislation can be
crafted to create procedures for that process. There is nothing inherent in peer review that
either favors or disfavors economic interests. If the administration of the ESA
has reached such a point that oversight is perceived as critical, the act is not
working. Thank
you for this opportunity to present testimony to you. SOURCES
OF INFORMATION (Posted
with the permission of the author)
In the wake of the 2001 regulatory disaster, the Klamath Project agricultural
community and its political leaders strongly advocated for an independent peer
review of the 2001 fishery agency biological opinions, the underlying science,
and the related overall scientific process. In early 2002, an interim report
from the National Research Council (NRC) Committee on Endangered and Threatened
Fishes in the
The panel successfully completed an objective, unbiased initial review of the
information used by the U.S. Fish and Wildlife Service (USFWS) and NOAA
Fisheries to formulate the agencies’ two 2001 Biological Opinions (BOs). The
interim NRC report concluded that there was insufficient scientific evidence
used by USFWS and NOAA Fisheries in 2001 to support changing the recent
historical water operations of the Klamath Project. Specifically, the NRC
interim report concluded that higher or lower than recent historical lake levels
or
Despite varying interpretations of the data used by the USFWS and NOAA Fisheries
in the BOs, it is especially noteworthy that the NRC panel achieved consensus on
the Interim Report’s conclusions for not just one, but both BOs. The
report’s conclusions were adequately supported by the available evidence and
analyses used by USFWS and NOAA Fisheries. It was particularly evident that the
NRC Committee report was fair and impartial, essential attributes that were
sorely lacking in
Unfortunately, the “new” fishery agency biological opinions (BOs) do not.
Despite the so-called ecosystem approach to species recovery advocated by the
USFWS and NOAA Fisheries, their actions in the Klamath basin over the past
decade amply demonstrates that the exact opposite took place. Instead, they
focused on: 1) a single-species approach; and 2) Klamath Project operations.
The USFWS opinion continues to perpetuate the questionable assumption that lake
level management is the principle mechanism affecting sucker survival in Upper
Klamath Lake (UKL). The NOAA Fisheries jeopardy decision similarly continues to
place high emphasis on downstream flows. The stored water developed for Klamath
Project farmers continues to be reallocated to meet the artificial demands set
by agency biologists.
The combined – and apparently, unanticipated – impacts placed on the
In addition to the continued uncertainty irrigators face, the opinions are
generating new, unanticipated impacts to the community. In the past 40 to 50
years, while the cropping pattern in the Klamath Project has varied from year to
year, the overall planted acreage has remained consistent. On the other hand,
the 2002-2012 biological opinion created by NOAA Fisheries for coho salmon
established the river flow schedule and an “environmental water bank” –
which ratchets up to 100,000 acre-feet this year, regardless of actual
hydrologic conditions – that is the primary source of new demand for water in
the
The result: stored water that has flowed to farms, ranches and the refuges for
nearly 100 years is now sent downstream at such high levels, that groundwater
pumped from the Lost River basin is being used to supplement the resulting
“coho salmon demand” in the Klamath River. It is not the farmers who have
imposed new water demands that, in essence, have made groundwater the default
supplemental supply to the Klamath Project. It is the opinions of agency fishery
biologists who have fundamentally altered how this century-old water project
operates, and who have apparently failed to anticipate the resulting impacts to
the community.
While Reclamation in 2002 sharply disagreed with the findings of both fishery
agency biological opinions, it is not yet clear how consultation will be
reinitiated to create a new operations plan.
For anyone who endured the consequences of the 2001 decisions, the efforts to
minimize the significance of the NRC committee’s findings are absurd. In 2001,
a desperate community was looked in the eye and told, “sorry, we know it may
hurt, but ‘the science’ is compelling and requires you to go without
water.” This was wrong, literally, and as a matter of policy. For whatever
reason, the agencies had become too close to, and too much a part of, the
side-taking that had come to dominate issues surrounding the Klamath Project.
For this reason alone, outside review was needed.
The Klamath peer review underscores the point. That peer review process not only
forced a reconsideration of otherwise-unchecked disastrous decisions, it pointed
to a better approach for species recovery. It also hints at something that is
often overlooked in the ESA debate, especially by interests outside of rural
areas. If protecting a species is
important to society as a whole, then all of society - not just select family
farms - should bear that burden.