California’s First Farmer-Led Groundwater Market

Ventura County, located in California’s south coast, is one of United States’ most productive agricultural counties (ranked 10th in California and 11th in the US)1, with agricultural production valued at $2.1B in 2016.2 California’s landmark groundwater law, the Sustainable Groundwater Management Act (SGMA), requires that 127 groundwater basins, including those in Ventura County, develop Groundwater Sustainability Plans that ensure pumping within sustainable limits. In western Ventura County, where over 70 percent of groundwater use is agricultural, the California Department of Water Resources has designated two groundwater basins as being in critical overdraft under SGMA.

The local management agency may have to reduce groundwater use in these basins by as much as 40 percent to achieve a sustainable yield. While these reductions are critical to achieving long-term sustainability of water use, which includes nature’s needs, they also pose significant challenges to wisely managing reduced water allocations to keep irrigated agricultural land in production. The Nature Conservancy (TNC) has a vested interest in preserving farming in the county because it buffers important river and wetland habitat from nearby urban lands.

Growers in the region quickly identified water markets as an important tool for managing limited groundwater resources.