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Amid Drought, (((Billionaires))) Control a Critical California Water Bank

PHOTO: Sam Painter/Fresh Water Films

By Chloe Sorvino | 20 September 2021

FORBES — Water prices are soaring in California’s Central Valley, where a quarter of the nation’s food is grown. As the West Coast’s megadrought worsens, one farming company has long been scrutinized for its outsize role in the arid region’s water supply.

Wonderful, the closely held company owned by billionaires Stewart and Lynda Resnick, can buy up huge amounts of water whenever it needs more. Most of the Resnicks’ water comes from long-term contracts and other water from land rights they have from the farms they own. Around 9% of the total water used by Wonderful is bought out on the open water market. While that’s not a huge amount of the water it uses, the company can outspend pretty much every other farmer in the region, which can influence water prices.

“Like all farmers, we occasionally need to purchase water for our crops,” a spokesperson for the Wonderful Co. said. “However, we prioritize water rights when purchasing farmland, thus most of our supply is not purchased on the water market. Based on this, we do not believe we have enough purchasing power to impact water prices.”

The water that the Resnicks use gets stored underground initially before the water is delivered to the roots of the Resnicks’ pistachios, almonds and pomegranate orchards. Specifically, it is stored in the Kern Water Bank, the most valuable water resource in a region critical to America’s fresh food supply. The water bank, which is a public-private partnership in which the Resnicks own a 57% stake, is a 32-square-mile recharge basin—which looks like floodlands from the street that essentially stores up to 1.5 million acre-feet of water (or 500 billion gallons) underground.

The Resnicks’ storage arrangement is controversial. “They have been banking water by using public and private dollars to corral a public resource. Because of their water rights and their wealth, they are insulating themselves from the drought,” says Char Miller, the director of environmental analysis at Pomona College. “Private capital has no problem with the drought, while the rest of us do. That’s one of the deep social divides.” […]

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