Danieru 2 years ago

What I find most interesting is how this plays into Warren Buffet's complaints about the American trade deficit: America has been selling long term assets to buy short term toys.

In Warren Buffet's explanation he uses selling farm land as this exact example.

Of course under free trade we would expect foreign buyers to own bits of land. The challenge for America: these are not land swaps. America is not buying up bits of land elsewhere. Instead America is selling these bits of land for trinkets.

The US Dollar is a global reserve currency. Which in the abstract sounds nice to have other countries sell US things in exchange for more US debt: but in practice that means selling assets. US Government Bonds or US Farm Land. Both are assets openly traded.

The issue is not foreigners. The issue is America is running up a debt and is selling the farm.

  • jmyeet 2 years ago

    You're touching on the Triffin Dilemma [1]. Basically, running a trade deficit is almost inevitable with any global reserve currency. There's not much you can do about that other than ot be a global reserve currency and there's simply no way that's going to happen voluntarily. The US derives too much power from the status of the US dollar.

    The other issue you've touched on is a mistake that even economists make, which is to conflate the freedom of trade with the free movement of capital. These are two entirely different things. If you buy something, that's trade. If you sell land, that's the movement of capital. You can and should have policy that honors that distinction.

    About the time the TPP was being rejected, I saw this comic [2], which honestly is worth a read as it explains pretty accurately this distinction.

    Another angle to this is debt trap diplomacy [3].

    [1]: https://en.wikipedia.org/wiki/Triffin_dilemma

    [2]: https://economixcomix.com/home/tpp/

    [3]: https://en.wikipedia.org/wiki/Debt-trap_diplomacy

  • oezi 2 years ago

    > America is not buying up bits of land elsewhere

    American investors incl. Private Equity are still owning and buying up quite a lot of foreign companies. European countries are quite afraid of the pockets of American PE and VCs to gobble up the most promising or profitable businesses.

    • lazide 2 years ago

      Cite?

      A great many countries don’t allow foreign nationals or foreign corporations to own land. Most you can get is a long term lease.

  • toss1 2 years ago

    And not only the farm assets, but the other natural assets, not to mention the know-how of manufacturing (the stupidest thing we ever did was follow the MBA's recommendations that "labor is just fungible, ship it off to the lowest-cost markets").

    >>"You can't take water and export it out of the state, there's laws about that," said Arizona geohydrologist Marvin Glotfelty, a well-drilling expert. "But you can take 'virtual' water and export it; alfalfa, cotton, electricity or anything created in part from the use of water."

    Seems it is time to put a stop to a LOT of that. Fortunately we already are returning semiconductor & other mfg. Must keep this up...

    • jjtheblunt 2 years ago

      What about labor that is fungible insofar as it is easily done by robots?

      • toss1 2 years ago

        Not to be rude, but you don't work much with manufacturing or robots, do you?

        Even if, and especially if, a mfg process is highly automated, it takes myriad layers of expertise to get it right. That is the LAST thing you want to ship overseas to your adversaries, which both increases their expertise in the field and your dependence on them.

        Economically, it is long-term-stupid. Strategically, it is suicide.

        • jjtheblunt 2 years ago

          Not rude, but i did work for a while on robot automation using expensive swiss industrial robots for a FAANG, in the US btw, for years.

          The purpose aligned pretty much with your observations and the utility of this was involved in building a billion+ of devices.

          • toss1 2 years ago

            Then you, of all people, should understand how massive is the value and expertise chain all the way from the product, to the CNC machine tool, to the CAM programming, to the CAD software, and the other forks up through the materials, the robot assembly. Even if you worked only in robotic final assembly, that is NOT stuff we want to offshore.

            I did see one case where it sort of made sense to offshore to China, and then only to have production near some other markets. The company literally prepared and shipped only the final secret input chemical and it's curing agent, to be mixed in a certain ratio, poured into a big vat, then cut into slabs. They were still wicked nervous about it, and I don't think the arrangement lasted long.

            Even if all the components are made here, with all the materials engineering, CNC machining, molding, forming, fabrication, etc. done here, and only final robotic assembly done in China, that is still a non-trivial skill to program and maintain those robots. And at that point, it's only a few experts, so why ship it and not keep it here?

            • jjtheblunt 2 years ago

              China did something prescient roughly a couple decades ago which the US missed the ball on: they set up that entire manufacturing zone, famous for the contract manufacturers used by Dell, Apple, ...., Google etc., such that one critical aspect unrelated to tech savvy was optimized.

              They made sure that the availability of components for all these global (mostly US it seems) companies wanting to rent time in their factories would face minimal supply chain difficulties, by making the component availabilities a local thing.

              It's very orthogonal to all you mentioned, which I agree is logical. Also, programming the robots could be done domestically, then binaries of the programs run in the contract manufacturing facilities. Point is, I think what you emphasize actually has long been a priority.

      • MichaelCollins 2 years ago

        High tech manufacturing is even more important to keep domestic.

  • User23 2 years ago

    The great thing about selling land to foreigners is that foreigners can’t vote and we can just eminent domain it back. See Kelo vs. New London.

    Incidentally the debt America is running up is ultimately owed to the Federal Reserve, which is a creature of the US government. There are major unsustainable problems with US economic policy, but Congress borrowing from a bank that it controls[1] isn’t one of them.

    [1] As Dune taught us the power to destroy a thing is the power to control it, and Congress can assuredly destroy the Fed.

  • jeffbee 2 years ago

    > America is not buying up bits of land elsewhere.

    What I always said about the Bush wars. For the cost of those wars, we could have bought all of rural Canada.

    • MichaelCollins 2 years ago

      I don't think that would work; 89% of Canada is owned by the Crown. I doubt the Crown would allow even a substantial fraction of Canada to be sold to America. It's not as though they're strapped for cash, so what's in it for them?

      • jeffbee 2 years ago

        Alaska was owned by the Tsar of Russia and they sold us Alaska. Who knows what kind of deal could have been struck with the Saxe-Coburg despot.

        • gnu8 2 years ago

          Leading me to ask, was the land not offered to the UK or were they not interested?

  • causality0 2 years ago

    Here's a hot take: nobody anywhere should be able to purchase land they're not allowed to live on.

    • bushbaba 2 years ago

      Here’s a hot take. China did it right by not selling land and only selling a 75 year land lease agreement.

      US would be better off if land was owned by the people and reclaimed by the people after a generational time period.

      • bobthepanda 2 years ago

        Leasehold comes with its own problems.

        Part of why China now has a imploding property market is that governments got addicted to leasehold revenues to keep taxes low, and so encouraged a lot of artificial scarcity. Affordability is much worse there; house prices in NYC are 10.5x income, SF is 12, LA is 13.

        Shanghai has a house to income price ratio of 47

      • refurb 2 years ago

        Singapore does this too (very little land is freehold).

        It looks great in China and Singapore because, well, the leases haven’t run out yet.

        They’ve just started to in Singapore and the end result is “you have until the end of the month to leave and you receive $0 compensation”.

        As a result they have to spend a ton of money on social housing and create massive disruption in the lives of seniors.

        There is no free lunch here.

    • pjc50 2 years ago

      So, like H1B but worse; if you're an immigrant but not a permanent resident, if you get stopped at the border for a visa error your house gets seized?

      (it's quite bizarre how this story seems to have brought out a desire on HN for Soviet levels of state controlled farming!)

      • vkou 2 years ago

        It's not bizarre, when you consider that the why of the communist revolution was driven by a popular desire for land reform. (Also Bread and Peace, neither of which could be offered by the provisional government of the February revolution. [1])

        And nothing about our current land use and tax policy results in good land use. It can, at best, result in good land use for some of the people owning it, but that doesn't optimize for what is good for anyone else.

        If you let the situation rot too much, the same factors that drove that revolution can result in similar political instability. I don't believe we are close to that point, though.

        [1] Of course, ironically, a coup backed by a strong public desire for peace resulted in a civil war which was in every respect worse than World War I for every participant.

    • chrisseaton 2 years ago

      You think the state should own all land except residential?

      • gadflyinyoureye 2 years ago

        Functionally they own all land. There’s just contract law blocking the direct seizure.

    • bparsons 2 years ago

      I would go further. No one should be able to purchase land they do not live on.

      • 8bitsrule 2 years ago

        I would go further still: No one should be able to purchase a house unless they agree to live in it for at least a year. And, one at a time.

        • c_o_n_v_e_x 2 years ago

          Seems like this would limit the supply of housing, though I don't know what problem it is that you're trying to solve?

        • refurb 2 years ago

          I would go further and say you can only buy one house your entire life.

  • engineer_22 2 years ago

    Same thing happened in the 90s and 00s. There was worry that the Japanese were buying everything.

    • CountSessine 2 years ago

      Yes exactly - and the US dollar plunged afterward and sank most of those investments. Trading goods for capital investment isn’t the one-sided trade it appears to be.

  • mushbino 2 years ago

    A huge amount of farmland in Ukraine has been bought recently by American corporations.

    • hulitu 2 years ago

      They are there to help. Themselves.

      • pnutjam 2 years ago

        The Lord helps those who help themselves; so help yourself to everything you can get your hands on.

  • mistrial9 2 years ago

    applicable here -- "A reflection on the lasting legacy of 1970s USDA Secretary Earl Butz"

    https://grist.org/article/the-butz-stops-here/

    many American hippy environmentalists cried in pain, since some of these farms are their birthing grounds; but in the mix was a hopeless morass of post-Civil War small holders with provably dysfunctional operations, and the promises of Big Returns for Big Capital on the other side of that fence -- where the grass is always greener.

  • ethotool 2 years ago

    This reminds me of the toll roads here in America. We can’t afford to take care of our own roads so we’ve opened it up to foreign investment. Companies based internationally now own our roads too.

    • whatthesmack 2 years ago

      And unsurprisingly they're some of the best roads on which to drive. Also, I've never been able to drive faster than I have on a toll road in Texas. Also, the idea that the people who use it are the people who pay for it is pretty neat.

      • ethotool 2 years ago

        What about the gasoline tax that we pay for on every gallon that’s supposed to go towards our roads? Not only are we being taxed on every gallon but we have to rely on foreign investment too? It should be either or.

  • klipt 2 years ago

    But thankfully we don't live in a libertarian utopia where owning all the land means that you automatically run the world.

    The land remains in America subject to American law which is decided by American voters. The value of the land can be recovered for Americans by e.g. taxing it and spending the money on services for citizens.

    • JKCalhoun 2 years ago

      The land is already being taxed? I suspect though the water (in this case) is not — or not effectively.

      • klipt 2 years ago

        Right taxing negative externalities more would be a good thing, but I think that's kind of independent of whether the land is owned by a foreigner or a local?

    • kodah 2 years ago

      > But thankfully we don't live in a libertarian utopia where owning all the land means that you automatically run the world

      Not a libertarian anymore, but this sentiment has nothing to do with libertarianism. You also can't recover something like water with taxes. It takes years to refill those aquifers if you begin overusing them.

      Edit: Very disappointing to see reductive politics do so well on here. Keep in mind, Libertarians only have ever garnered 1.2% of the national vote. Your dishing is literally just a signal of your own shittiness.

      • MichaelCollins 2 years ago

        > It takes years to refill those aquifers if you begin overusing them.

        Thousands of years if not longer in the case of fossil aquifers. In regions where the aquifers are capped by an impermeable layer, rain water does not replenish the ground water at any meaningful speed. In these regions, using ground water is unsustainable no matter how much money you're charging for it or what you're using it for. Some of these aquifers were filled thousands of years ago during climate conditions drastically different from today, and these will never refill under present or foreseeable climate conditions.

        Let people farm there using the finite water supply and they'll make a lot of money up front, but that gravy train has to stop eventually. But by the time the water runs out they've made a lot of money, and probably use that money to lobby for wetter regions to hand over their water too.

        Tapping fossil aquifers should be illegal. If you can't make due with surface water and/or aquifers that refill regularly from surface water, then you should go somewhere else. Don't farm in deserts.

naycombinator 2 years ago

I've been following reporter Nathan Halverson on this topic (and other related ones) for years now. Some of his older work on this is still worth a read or a listen:

https://revealnews.org/podcast/high-and-dry-a-deep-dive-into...

https://www.npr.org/sections/thesalt/2015/11/02/453885642/sa...

He's also a producer/face on a new documentary making the rounds at film festivals this year:

https://www.imdb.com/title/tt21820452/

There's a trailer on https://www.docnyc.net/film/the-grab/ as well as online viewing in mid-November. I haven't seen it yet, but it's been well-received thus far.

mastax 2 years ago

You could try to come up with a scheme that targets people you don't like, but that leaves you with an inconvenient truth: people you do like are just as capable of sucking the wells dry.

  • pwarner 2 years ago

    Yeah the foreign owned part seems like the least important part.

    • hn_throwaway_99 2 years ago

      It's not really so much that the farm is foreign owned, it's that the very water intensive crop is grown so it can be shipped overseas to feed livestock for foreign populations. This is essentially "exporting water".

      Which, in and of itself, is not necessarily a bad thing, but it is when water is essentially so mispriced that it's a really bad deal for the place that is supplying the water, especially during a mega-drought.

      • Maursault 2 years ago

        > it's that the very water intensive crop is grown

        The article is very much pot, kettle black. Agriculture is using the majority of the water and mostly for growing alfalfa to feed cows. Everything there is wrong. We don't need that many cows. If the town wants to save itself, it must start water-rationing for agriculture, and ban a lot of alfalfa growing.

        • jacobolus 2 years ago

          > If the town wants to save itself, it must start water-rationing for agriculture, and ban a lot of alfalfa growing.

          Or more effectively (because it is much simpler and can’t be gamed nearly as easily), price the water appropriately based on the sustainable supply. Then it will not be profitable to use at huge scale for low-value water-intensive crops.

          If fairly pricing the water ends up hurting local residents, that would best be dealt with by directly paying cash to every resident to make up the typical difference.

          (We should do the same with other resources that are scarce or have negative externalities; e.g. gasoline should have the environmental costs of carbon emissions priced into it with a very steep tax, and then every resident should be directly paid cash enough to make up the difference for a typical person’s transportation. Otherwise, people are incentivized to over-use resources that are effectively being subsidized, and the free market economy cannot perform its function.)

          • MichaelCollins 2 years ago

            > price the water appropriately based on the sustainable supply.

            In the regions where the water problem is most relevant, pricing based on the sustainable supply isn't possible because the water supply isn't sustainable, and won't be no matter how much you charge or how little you use.

            • Maursault 2 years ago

              And this sort of thing would also kill individual residents that aren't agriculture conglomerates with deep pockets. Agriculture water use must be separated from residential uses. They'll never recover enough water by squeezing residential use because 86% of the water in the West is used for crops.[1] Over 30% of all the water used is for growing crops to feed cows.

              I don't agree with the solution advanced in the linked video of paying farmers not to grow alfalfa. I think we should reduce the cow population by 75% (bringing meat consumption in line with the rest of the world), raise the price of beef, and tax the hell out of it. We do it for tobacco, and meat eaters put the same kind of strain on the health system, so let them pay for their entitlement. And saving water isn't the only benefit of reducing the population of cows, which would include longer life spans and much, much less contribution to Climate Change.

              [1] https://www.youtube.com/watch?v=f0gN1x6sVTc

              • hn_throwaway_99 2 years ago

                > And this sort of thing would also kill individual residents that aren't agriculture conglomerates with deep pockets. Agriculture water use must be separated from residential uses.

                That's pretty easy to do with graduated rates, where customers are charged a low rate for the first X gallons of water, but then higher rates for more usage.

                The bigger issue, though, is water rights are completely fucked. In a lot of jurisdictions you are free to suck out any water you can with a well on your property. That means those with the "strongest pump" are essentially free to suck out all the water from their neighbors. Our system of water rights in the West needs a major overhaul that won't be easy due to entrenched, powerful interests and the difficulty of changing some of these laws.

                • Maursault 2 years ago

                  Residential water use is not the problem. Not even remotely. The penultimate problem is agriculture, and the singular ultimate problem is, seriously, cows. They can screw around with minor adjustments here and there, but the easiest and best solution is to adjust population diet, curb agricultural greed and entitlement, massively reduce the population of cows, raise the price of beef and tax it.

                  The average American eats 55lbs. of beef a year, 4.5lbs. a month, over a pound a week. I guess we can wait until they all have massive coronaries, but it would be better to just stop this madness and restrict these eaters to 3 quarters of a pound of beef a week.

                  • hn_throwaway_99 2 years ago

                    > Residential water use is not the problem. Not even remotely. The penultimate problem is agriculture, and the singular ultimate problem is, seriously, cows.

                    I completely agree, which is why I said that graduated rates are a good solution - they would tax agricultural (and any heavy user) heavily while leaving residential use cheap.

                    However, I'm also not in favor of other solutions that are complete fantasies when it comes to our political system. You say "but the easiest and best solution is to adjust population diet, curb agricultural greed and entitlement, massively reduce the population of cows, raise the price of beef and tax it." Except that is a guaranteed political non-starter in essentially every country that has high beef consumption.

                    • Maursault 2 years ago

                      > Except that is a guaranteed political non-starter in essentially every country that has high beef consumption.

                      50 years ago everyone smoked. What we need are Surgeon General reports linking eating red meat to cardiovascular disease, coronary heart disease, stroke, type 2 diabetes, and especially colon and rectal cancers, which shouldn't be too difficult because it's true. Then we need ad campaigns, "Mmmm meat! Tastes just like cancer!" Then all that is needed is for the American Heart Association, American Cancer Society and American Diabetes Association to sue Tyson, JBS, Cargill, and National Beef, to find they lied to the American public about the deadly effects of their product, which they intentionally marketed to children - the meat food group was always bullshit. Then comes taxing red meat and the collapse of these industries, because unlike nicotine, red meat is not addictive. Viola! Suddenly there is more water in the West than they know what to do with. Ranchers, cowboys, cattlemen and meat processors are retrained to work at all the water parks and recreational reservoirs that could then exist throughout the West, drawing in fortunes in recreational boating and tourism.

                      • jacobolus 2 years ago

                        > What we need are Surgeon General reports ...

                        There are observational studies demonstrating a correlation between red meat consumption and various health problems, but risks involved from eating red meat vs. smoking are not remotely comparable, nor is the scientific evidence anywhere near as convincing.

                        Nor does some people eating meat directly affect others’ health, the way smoking in enclosed indoor spaces does.

                        It would be better to give people truthful information about what risks are known and what our confidence is in those, rather than trying to scaremonger or force lifestyle changes based on exaggerated health claims.

                        Climate risks and environmental externalities are a much bigger problem with red meat than direct health effects. (And a better cause for ending subsidies / adding taxes.)

                        If you are just worried about health per se, it would make much more sense to start by targeting soda and alcohol, and follow up by targeting candy, cookies, chips, etc. Even in fast food restaurants, the fries and soda are a bigger health problem than the burgers.

                        • Maursault 2 years ago

                          The claim that eating red meat is not as harmful as smoking is hedging and a fallacy of relative privation. Just because eating plutonium is more deadly than eating red meat doesn't make eating red meat any less harmful.

                          The World Health Organisation has classified cured and processed meats as Group I carcinogens because there is a causal link between consuming these meats and bowel cancer. Group I carcinogens also includes tobacco, alcohol, arsenic and asbestos, all known to cause certain cancers. WHO classified red meat as Group 2A carcinogens, indicating it most likely causes cancer.[1] Group 2A carcinogens includes alcohol, benzine, diesel exhaust, and formaldehyde.

                          And having that many cows around hurts everyone on the planet, vegans included. There's 94M cows in the US, or 1 for every 3 people. But it would take 4 people eating 55 pounds of beef a year to consume one 1400lb. dressed cow. On the face of it, there are, at the very least, 25.5M superfluous cows producing more than 5B pounds of methane every year while consuming 46.5B pounds of alfalfa requiring ~7.2B gallons of water to grow.

                          Say what you will about smoking, but no one ever tried to grow tobacco in a desert during a drought.

                          And I'm not sure soda consumption is a significant contributor to Global Warming. The health concern is the meat eaters' incentive to quit, while I'd like it to stop being so damn hot and killing everything for the sake of meat gluttons indulging themselves. Eating meat is not any kind of virtue, and it is certainly not more important than the biosphere. For the sake of life on Earth, I can live without people eating so much damn meat all the time.

                          [1] https://www.hsph.harvard.edu/nutritionsource/2015/11/03/repo...

                          • ahefner 2 years ago

                            If we're going to raise the cows anyway, I think what you're telling me is that I need to try harder to eat more beef.

                            • Maursault 2 years ago

                              > I need to try harder to eat more beef.

                              Definitely. The less red meat eaters the better, so do your best to eat as much as you can.

            • CaptainNegative 2 years ago

              Wouldn't that be a self-correcting problem as much of the population moves away due to enormous utility costs?

              • Maursault 2 years ago

                The water-use by agriculture is unsustainable whether there is population or not. Compared to agriculture use of water, all other water uses are negligible. So if you eliminate the residential population and empty the cities, agriculture will still use all the water and fail. But if you eliminate the agriculture, there will be plenty of water for the cities and population. A desert has enough water to support a population. It was foolish to introduce industrialized agriculture in a desert.

              • MichaelCollins 2 years ago

                It would be, except that the farmers become wealthy from their unsustainable business practices and start lobbying for insane shit like piping in water from wetter regions. The problem needs to be nipped at the bud; ban farming with fossil water.

        • supportlocal4h 2 years ago

          Instead we need to be growing more chicken feed?

      • dehrmann 2 years ago

        But to the original point, with domestic ownership, the domestic owner would grow the same crops and sell them to the same foreign buyers because they're willing to pay the prices that make it work.

        The only solution is limit ground water extraction. Putting this on foreign owners dodges the solution no one wants to talk about.

    • ericmcer 2 years ago

      It is more relevant when you see all the signs and ads about neighborhoods "doing their part" to help conserve water by not watering plants and taking shorter showers. If those conservations are being used to enrich a microscopic part of population who is shipping all that water overseas it raises questions about who and what we are conserving for.

  • jeffbee 2 years ago

    True, the Americans of western Kansas have managed to drain the aquifers there right down to zero.

  • unethical_ban 2 years ago

    Not sure what point you're making. Let's pivot.

    Fresh water at the moment is not a short-term renewable resource. In some places fresh water takes a long time to correct when there is an input/output imbalance.

    So just like any non-renewable resource, particularly one vital to life and food, it should be guarded as a local and national security asset.

    • mastax 2 years ago

      Let me be more clear.

      The article is very focused on the "evil foreigners" angle, which is understandable. I also do not like Saudi Arabia buying up farms and exporting water. But this problem is a tiny subset of the overall problem, which is unsustainable water use. I am concerned that by focusing too much on the evil foreigners, we'll end up with a solution targeted at the evil foreigners, or exporting alfalfa, and we'll end up with the same farms growing alfalfa for cows in California or Arizona which does not solve the problem at all.

      What we need is to cap all water usage to sustainable levels, ideally with a cap and trade or market system which would incentivize investing in water conservation and encourage efficient land use. Given how climate change legislation has gone in the US we'll probably end up with the worst water uses being banned, and subsidies for better water uses. It's politically easier to pay people for good outcomes than to charge them for bad ones.

      • ericmcer 2 years ago

        I know the evil foreigners angle is associated with racism and ignorance nowadays but separate societies have different priorities and agendas right? A society should view its natural resources being sold externally as less beneficial than being used internally, unless in some kind of universally beneficial exchange. If a society doesn't exist to enrich its members then what is even the point of it?

        • supertrope 2 years ago

          The United States cannot simultaneously push the benefits of free trade and block foreign investment. Reactionary laws like banning the export of crude oil ultimately drive up costs. There's no such thing as a free lunch.

tzs 2 years ago

Here was an interesting recent longer story about megafarms vs residents conflicts over water in one particular Arizona county and what residents are trying to do about it: "The Cochise County Groundwater Wars--A thirsty megafarm is driving a libertarian enclave in Arizona to embrace a radical solution: government regulation" [1]. I submitted it to HN a few days ago but it went nowhere [2].

It's one in a series of several articles on climate change and megadroughts [3].

[1] https://grist.org/regulation/arizona-groundwater-cochise-cou...

[2] https://news.ycombinator.com/item?id=33407914

[3] https://grist.org/series/drought-parched/

mtw 2 years ago

The US exports $25B worth of soybeans per year, which is one of the most water intensive crop. Should these exports be banned? same for almonds, cotton, rice etc.

  • zamfi 2 years ago

    No but perhaps the negative externalities of water overextraction should start to get priced in.

    • dahart 2 years ago

      How? When it comes to pricing the environment, we have a long history of missing the mark by orders of magnitude, due in part to the extremely long delays between cause and effect, and also due to markets and financial vested interests preventing accurate information about costs, and even preventing the analysis of costs. https://scholarship.law.georgetown.edu/cgi/viewcontent.cgi?a...

      • richk449 2 years ago

        If the externality currently has no cost, then even pricing it low by orders of magnitude should be better than the status quo. Pricing it high by orders of magnitude would have negative consequences, but that seems unlikely to happen in practice.

        • dahart 2 years ago

          > even pricing it low by orders of magnitude should be better than the status quo.

          No, while this assumption seems econ 101 logical for a second, it’s not really true and the paper I linked above explains why. The pricing has to match the approximate order-of-magnitude cost of externalities for it to actually prevent any of the consequences we’re discussing here (or more likely be regulated so that Saudi Arabia can’t buy all the water regardless of price). There’s enough price flexibility over water and high enough demand that increasing prices 2x or even 10x today will not slow consumption at all. Water in the US west is already over-subscribed, and people with more money have already lined up to buy whatever becomes available. Increasing prices a little will only change who buys water, not whether it gets used. It has to be high enough that people start choosing not to buy it, which with water is an extremely high bar. In the mean time, draining our aquifers has ramifications for the next several thousand years.

          This is the whole problem with cost-benefit analysis and free market thinking. When it comes to things that all humans need, like air and water, we have never yet managed to calculate either the true costs or the true benefits correctly, and reducing the equation to money loses all sense of proportion, and more or less always frames things in terms that let rich people and corporations win and take whatever they want.

          • richk449 2 years ago

            I don’t think it is as black and white as you make it out to be.

            Yes, there will be large demand for water even at higher prices. But less than at lower prices. Maybe a little less, maybe a lot less, but either way we are better off than now.

            Also, there are many other effects to consider besides how much the demand will change. As the price increases, alternative water sources become more economic - trucking water in, building pipelines and canals, building water capture systems, desalinization, etc. Rather than solving the problem by using less water it may be possible to solve the problem by using water that has less environmental impact.

            Generally speaking, I find your framework hard to parse. Free market thinking and cost benefit analysis are orthogonal, not two parts of a whole. Pricing externalities, as we are discussing here is not the same thing as cost benefit analysis.

            Cost benefit analysis is a bureaucrat sitting in an office and deciding what policies should be enacted. Pricing an externality means assigning a cost to use of some scarce resource, and letting the market decide if and when the resource is worth the cost.

            • dahart 2 years ago

              > But less than at lower prices.

              That’s just assumption, and history has sometimes proven this assumption wrong. Higher prices do not automatically yield lower demand. It may take a threshold price increase before consumption changes at all, especially for scarce resources.

              It’s true that alternatives change the equation, that I agree with. But the problem with allowing the market to sort it out is that Saudi Arabia might always be able to afford more than small town, Arizona. If you raise prices, you might only price out the locals and surrender your water to foreign interests. Charging money is in no way certain to fix this problem, it might make everything even worse.

              > Pricing an externality means assigning a cost to use of some scarce resource, and letting the market decide if and when the resource is worth the cost.

              What you just described is cost benefit analysis followed by free market thinking, definitionally speaking.

              • richk449 2 years ago

                Here’s a definition of cost benefit analysis:

                A cost-benefit analysis is the process of comparing the projected or estimated costs and benefits (or opportunities) associated with a project decision to determine whether it makes sense from a business perspective.

                Generally speaking, cost-benefit analysis involves tallying up all costs of a project or decision and subtracting that amount from the total projected benefits of the project or decision. (Sometimes, this value is represented as a ratio.)

                That is simply not the same as applying a tax or surcharge to something to internalize an externality.

                • dahart 2 years ago

                  I agree with that; you’re just not thinking all the way through what it means to do what you suggested, assign a cost to a scarce environmental resource in order to avoid the kind of negative future consequences we’re discussing here. In this context, the premise behind assigning such a cost requires a cost benefit analysis.

                  • richk449 2 years ago

                    No, assigning a cost requires evaluating the cost. It doesn’t require evaluation of the benefits.

                    • dahart 2 years ago

                      Hehe, then you can’t possibly claim a mild price increase is mildly helpful.

                      • richk449 2 years ago

                        Truly, you have a dizzying intellect.

    • rubyfan 2 years ago

      Seems hard to put a price on some of those negative externalities. A tariff or something doesn’t really fix or curb the problem.

      • vkou 2 years ago

        It's pretty easy, just charge ruinous usage rates for any water use that is beyond replenishment rates.

        It doesn't matter if these soybeans are going to China, Mars, or Washington state, the only thing that matters is whether the people growing them are exhausting their region's water supply.

      • silon42 2 years ago

        Has the tariff been tried? Increase it if the aquifer levels are dropping.

  • JoeAltmaier 2 years ago

    We grow a butt-ton of soybeans in iowa, and I have yet to see anybody irrigating them anywhere. See, we water crops here like god intended - by water falling from the sky for free.

  • pixl97 2 years ago

    How much of the soybean crop is grown in the desert southwest versus the midwest?

    Almonds is really the only contentious item on this list as they are grown in areas with water insecurity.

  • rsj_hn 2 years ago

    We really shouldn't be growing soybeans or corn in Great American Desert (the vast plains west of the Mississippi and east of the Rockies). That is arid land intended for grass, and then you should raise cattle and livestock on the grass, with at most occasional rotations for crops, say once every 30 years or so. That is why herds of buffalo roamed this area and only small regions were cultivated for corn, and only for a few growing cycles, before it again returned to grassland for cattle.

    This is how all civilizations traditionally cultivated grasslands -- as lands on which ruminants were raised, and then you drink the milk and eat the meat of the ruminants as your main source of calories.

    Trying to raise crops on arid cattle country requires you to deplete aquifers and then import large amounts of fertilizers because the land itself can't sustain that type of production. It can, however, sustain growing grass, with no fertilizer or water additions required. Then as the ruminants eat the grass, they fertilize the soil and the roots decompose, adding more nutrients. Do that over many generations, and you create a rich soil, and on the rich soil, a few crops can be grown, and then they need to be replaced again with grass and cattle.

    The decision to grow millions of acres of soybeans and corn in this desert is a short sighted policy. Milk and meat need to be food products from that region, given the climate. East of the Mississippi, there is a wetter climate, and that's where we should be growing most of our crops.

labrador 2 years ago

A civilization in the desert and that wastes the limited water supply for the profit of the owners at the top should fail. When the last drop runs out maybe people will wake up. That's my view from a distance.

  • birdyrooster 2 years ago

    Except then its an expensive emergency for the state to deal with, it would be far less expensive for the average stake holder to create a political solution that either resolves the shortage or creates a way for the towns to depopulate in a dignified way over time.

    • labrador 2 years ago

      Good luck with that. Arizona is filled with rabid religious nuts so I don't expect much to change until the last minute.

lacker 2 years ago

American-owned farms do the same thing. They get water for far cheaper than a residential household gets water, and so they are incentivized to waste it.

Alfalfa is a uniquely bad crop to grow in dry areas. It uses up a lot of water, and there's nothing special about alfalfa from the Western US - it goes to feed cows and there's plenty of other ways to feed cows.

There's no real reason to create laws specific to foreign-owned farmers, or alfalfa. Just make farmers pay the same amount for water as anyone else pays.

  • refurb 2 years ago

    That sounds simple, but water rights, especially in the West can back further than it’s incorporation into the US.

    In the treaty that ended the Mexican American war, the US agreed to respect all Mexican land grants. Those grants are still enforced by US law.

    Of course with eminent domain the government might be able to seize water rights (i don’t know) but owners would need to be paid a fair cost for the loss of those rights.

    • jdkee 2 years ago

      The laws and treaties and compacts governing water rights can be changed. They are not set for eternity in a stone tablet from the Creator, they are human constructions.

  • supertrope 2 years ago

    Irrigation water is not potable, it's not plumbed to the point of use, and no sewage treatment is needed afterward. There's definitely some perverse pricing of agriculture use due to the water rights legal framework (e.g. use it or lose it discourages water saving) but tap water and irrigation water are different commodities.

renewiltord 2 years ago

Foreign ownership doesn't matter since domestic owned farms will do the same. Drive down California's Central Valley to LA and you'll find farmers' signs decrying Newsom for "wasting our water" (letting the rivers flow into the sea).

criddell 2 years ago

Is the water free for anybody to take, or is there a system of water rights that have to purchased first?

  • nkurz 2 years ago

    Water rights in the Southwest are complex, but in general, "surface water" (rivers and streams) is alloted according to historical water rights, but "ground water" (drilled wells) is available to whoever owns the land on the surface. From the article:

    Groundwater is the lifeblood of the rural Southwest, but just as the Colorado River Basin is in crisis, aquifers are rapidly depleting from decades of overuse, worsening drought and rampant agricultural growth.

    Residents and farms pull water from the same underground pools, and as the water table declines, the thing determining how long a well lasts is how deeply it was drilled.

    Now frustration is growing in Arizona's La Paz County, as shallower wells run dry amid the Southwest's worst drought in 1,200 years. Much of the frustration is pointed at the area's huge, foreign-owned farms growing thirsty crops like alfalfa, which ultimately get shipped to feed cattle and other livestock overseas.

    "You can't take water and export it out of the state, there's laws about that," said Arizona geohydrologist Marvin Glotfelty, a well-drilling expert. "But you can take 'virtual' water and export it; alfalfa, cotton, electricity or anything created in part from the use of water."

    Residents and local officials say lax groundwater laws give agriculture the upper hand, allowing farms to pump unlimited water as long as they own or lease the property to drill wells into. In around 80% of the state, Arizona has no laws overseeing how much water corporate megafarms are using, nor is there any way for the state to track it.

    Essentially, this means that in most of Arizona, the water in the ground is free and unmetered for agricultural use by anyone who owns enough land to drill a well. As one would guess, this creates a crisis when some users are drawing enough water to lower the water table on surrounding land.

    • supportlocal4h 2 years ago

      It is not true that ground water from wells is freely available to whomever owns the land. See recent judgements regarding multi-billion dollar disputes in Nevada, Idaho, and Utah.

      It is not a new thing for some wells to run dry because of neighbors' water use. And it isn't catching anybody by surprise. There's a whole lot of gunfighters flowing into these here parts. Uh hem, sorry. I mean lawyers.

      • nkurz 2 years ago

        I was definitely handwaving when I said "in general", but I meant something like "in the absence of local laws to the contrary". And (without sufficiently specifying) I intended to limit my comment to Arizona because that was the focus of the article. Arizona is different than the other Southwestern states. Here's what seems like a more complete overview: https://groundwater.stanford.edu/dashboard/arizona.html

        Note that unlike the other states you mentioned, the standard in Arizona is "reasonable use". Texas is the other big outlier. Do you have links (or good search terms) for the recent judgments you refer to? I know some things about this area (certainly enough to call it "complex"), but there is a lot I'm ignorant of.

        • supportlocal4h 2 years ago

          SNWA loses another water fight

          Great Basin Water Network court case

          SNWA water war

          Snake Valley production wells

          Tribal leaders oppose southern nevada water

          • mjhay 2 years ago

            Those are in Nevada and Idaho, not Arizona.

            • supportlocal4h 2 years ago

              Yes. While I originally disagreed with nkurz, I responded to their non-confrontational approach. So the above is not an argument, it's a cooperation. (I know; weird)

supportlocal4h 2 years ago

Surely the irony is not lost that USians fret over alfalfa and oranges getting shipped overseas after so many decades of shipping oil, autos, bananas, etc. into the US from around the world.

  • mym1990 2 years ago

    USians?

    • nkurz 2 years ago

      USian is used to mean people who live in the US. Some people choose it because it's shorter, some because they think it's too US-centric to call people American when there are many other countries on two continents that could match that definition.

      If you are a non-native English speaker, you probably want to avoid this term unless you are conscious that many readers will code you as "progressive left". It's not as strong as "Amerikan" (sometimes used to imply Americans are Nazis), but it has a similar register.

      Here's an HN thread from a few years ago about it: https://news.ycombinator.com/item?id=9994159.

      • mym1990 2 years ago

        Wow, some people will really jump some extreme hoops to seem "progressive". Gave me a chuckle, thanks.

        • supportlocal4h 2 years ago

          I would color myself conservative, though most of my conservative circle might smile at that. I have no interest in seeming progressive.

          I've come to accept that I am pedantic. I use phrases like "Native American" to avoid ambiguity, not for any political correctness. I don't refer to anything east of Colorado as the Midwest. I sometimes call cornets trumpets but mostly because I am ignorant. Mostly I find that it's less work to use accurate language instead of long clarifying explanations. But you got me this time.

bamboozled 2 years ago

Free markets

  • baggy_trough 2 years ago

    Lack of proper free markets in water.

    • kevingadd 2 years ago

      Is there an appropriate price for a child's drinking water? 500/yr? 5000/yr? What if a company wants to use all our water to make really expensive luxury food and earn back everything it spends? Should we sell them all our water since they're the highest bidder?

      • malyk 2 years ago

        Under 100 gallons a day (totally random choice), free-ish. Over 1 acre-foot per day, $100,000 (totally random choice).

        • MichaelCollins 2 years ago

          How do you accomplish that sort of pricing scheme with free markets? You need government regulated markets to accomplish this.

          • unethical_ban 2 years ago

            I for one support this. Too many people in the thread are just saying a phrase like "Free markets" while making no point foolishly, followed by rhetorical questions. Allow me to be unambigious.

            If we agree that overconsumption of groundwater combined with under-replenishment of all frewshwater resources due to climate change implies a coming strategic shortage of water, then yes, absolutely, state and federal government should be severely scrutinizing where water is going and prohibit excess water consumption for luxuries and for exports.

            Another way to go about it would be what the person above you said: Create tiered pricing for water such that the reasonable monthly use of water is as close to free (minus upkeep of water infrastructure) as possible, while quickly ramping up marginal cost.

      • vitiral 2 years ago

        Considering wars have been fought and blood spilled over it I'd say the answer is yes, but it's a price many would prefer not paying.

      • TEP_Kim_Il_Sung 2 years ago

        Read "The Moon is a Harsh Mistress" by Robert Heinlein, for some perspective.

        On the former Soviet Lunar prison turned colony, electricity, water, and air are,by necessity not free.

        • kevingadd 2 years ago

          Great book, but I feel like if we decide to run the US the way we would run a lunar prison colony, we're kind of admitting that we've ruined things for ourselves.

selimnairb 2 years ago

Seize all foreign-owned land, put capital controls in place to keep this from happening again.

  • latchkey 2 years ago

    > Seize all foreign-owned land

    According to Native Americans, we already did that.

  • pjc50 2 years ago

    .. very Cuban. This kills foreign investment, and possibly results in retaliatory seizure of land overseas owned by US nationals.

ianai 2 years ago

Have to wonder why the tie-in to overseas trade in an article about wells running dry. Feels more like stoking outrage over foreigners than drought.

  • simonsarris 2 years ago

    Depleting an underground reservoir is a matter of national security. Doing it to sell alfalfa to another country is off the charts a matter of national security.

    • sbarre 2 years ago

      Would it be different if the farm was American-owned, but still growing alfalfa and selling it to another country?

      Are you suggesting export controls on vegetables?

      • Brian_K_White 2 years ago

        Are you suggesting this is not a problem, regardless the labels and frameworks currently available to describe it or address it?

        But sure, we can declare any kind of export control we determine a state interest in. Other people can play even better word games than you just tried to, to articulate both the problem and a response. You didn't show how it's an invalid idea at all.

        • pjc50 2 years ago

          As a non-American, I love how America is about individual freedom and the right to earn a living right up until the point where nationalism is invoked and everyone's back to advocating that the government confiscate farms.

          • foobazgt 2 years ago

            As an American, I feel like you're missing the point. Generally the expectation is that you have the freedom to do anything you want as long as it does not impinge upon the rights of others. Of course, there's a lot of nuance buried there, but that's the general principle. I think it's a good framework.

          • Brian_K_White 2 years ago

            There are all kinds of potential ways to address this or any other problem besides confiscating a farm, and even confiscating a farm doesn't necessarily have to violate any individual freedom principles, since nothing is pure. There has always been eminent domain.

            • MichaelCollins 2 years ago

              In the case of farms that rely on fossil aquifers, there is no way to address the problem other than shutting the farm down completely. If the farm relies on an unsustainable source of water, then it doesn't matter if the farm is owned by Americans or foreigners; it isn't sustainable no matter what.

              • Brian_K_White 2 years ago

                You could regulate use of the water, or tax it, etc. All kinds of things. Have some imagination.

                If these things happen to produce a side effect that it's not profitable to use that piece of land to grow almonds or grass or whatever, so be it. You still didn't confiscate anyone's property that they ever had any valid right to in the first place in the libertarian fearmongering sense.

                Or you could mark the water resource as public and go ahead and confiscate the property for some reasonable market value (not a value based on selling a valuable public resource). It's not inconsistent with property rights and free markets or anything like that even if you do decide you have to plain take over something.

                • MichaelCollins 2 years ago

                  > You could regulate use of the water, or tax it, etc. All kinds of things. Have some imagination.

                  Unless by regulate you mean ban, none of that will make a fossil aquifer sustainable. The best you can do is push back the date the water runs out, but the water will run out. You can't call it sustainable just because it lasts longer than your lifetime. By that standard, coal mining was "sustainable".

                  In regions with regular rainfall where shallow wells suffice, sustainable use of groundwater is simply a matter of balancing inflow with outflow. But in regions where aquifers are deep and sealed, or were filled thousands of years ago when North America was covered in a mile of ice, you cannot use the water and balance inflows and outflows because inflows are effectively zero. The only way to balance inflows and outflows of fossil water is to ban the use of fossil water.

                  • red_trumpet 2 years ago

                    That sounds totally plausible. Do you know in which regions have fossil aquifers, and which have aquifers with reasonable inflow?

                    Also, I don't immediately see why depleting a fossil aquifer would be bad (as opposed to using coal or oil, which affects CO2 levels). Do I miss any side effects? If not, it might be reasonable to use fossil water as long as it is available to make a region liveable, but restrict its use for e.g. agriculture, to make the water last longer.

                  • Brian_K_White 2 years ago

                    "Unless by regulate you mean ban"

                    I mean regulate, as in devise some rule. The exact details are open ended and infinite. You could make up any kind of rule that says what the water may or may not be used for, how much may be extracted per time period, require other things that will eventually lead to the creation of some other water source while this one is being consumed, etc.

                    All kinds of things.

          • vitiral 2 years ago

            Some more coherent theories of ownership (geo libertarian) do not consider resources like land, ore or water to be individually owned - but rather owned "in common."

            Under such a theory this issue actually is regarding individual freedom.

        • sbarre 2 years ago

          I was responding to the previous poster's specific claim that they saw this as a national security issue, and simply looking to clarify whether they believed the farm's ownership was a factor in that position, or whether it was about the actual exporting and sale of alfalfa to a foreign power.

          But sure, ignore that context when over-analyzing my response.. ;-)

          Also, not sure why you felt the need to take a shot at me in the end there. Apologies if my words offended you somehow?

      • red_trumpet 2 years ago

        How about restricting the amount of water one is allowed to extract from the aquifer?

        • btown 2 years ago

          This. We already nationally regulate crop rotation to protect against erosion and disease, which can have effects beyond the boundaries of any given farm or owner: https://www.ams.usda.gov/grades-standards/crop-rotation-prac.... It seems reasonable to me that access to an aquifer which also goes beyond the boundaries of any given farm would be a reasonable thing to regulate as well.

          And it's important for policymakers to have the context that international trade considerations have introduced incentives to the region that may not have been present beforehand - as a result, one should not simply say "we never needed to regulate this before" because there are material changes to the situation.

      • ianai 2 years ago

        Also the US long ago decided to make international trade a point of ensuring and reinforcing national security. Marshall plan and all that.

    • JoeAltmaier 2 years ago

      ...no matter who is doing it.

      Are we to believe the water usage would be less if Americans owned the ground?

    • joshe 2 years ago

      our malnourished cavalry horses!

  • nkurz 2 years ago

    A point probably worth making, but article is aware enough to consider it already:

    With all of this, Gary Saiter doesn't care if the farm is owned by a company overseas. The way he sees it, it doesn't make much of a difference who owns the farm; he just wishes they were better neighbors.

    "I am kind of ambivalent about the Saudis," Saiter said. "You can't control where people sell stuff, and it's going to go somewhere."

    "I just don't like the crops they're growing and the water they're pumping," he added.

    • ianai 2 years ago

      I’m pointing out the editorializing implicit in the framing. Apparently groundwater is used for crops all throughout Mexico and the southwest. I definitely wish it weren’t the case and instead a national water grid like how we have national power.

      • me_again 2 years ago

        Interestingly, the US doesn't have a true national power grid. https://www.epa.gov/green-power-markets/us-grid-regions

        The practical difficulty of transporting large amounts of water long distances is even worse than electricity, so I don't think it'll ever be easy to say "Minnesota has a water surplus this year, let's just adjust the pipes to send it to Nevada".

      • MichaelCollins 2 years ago

        > a national water grid

        Awful idea. Why should the wet parts of the country pump their water into deserts where people shouldn't be living/working in the first place? If people want to live in deserts, let them find their own water. No other region should be obliged to supplement their unsustainable desert lifestyle. Let nature take her course and depopulate those deserts in due time. If you want water, move to where the water is.

        • richk449 2 years ago

          Why don’t we apply that logic to other things? If you want carrots, move to where the carrots are grown. If you want a car, move near a car factory. You want oil? Move to Saudi Arabia.

          Everyone benefits from specialization and trade. I don’t see any reason it wouldn’t apply to water too.

  • im-a-baby 2 years ago

    Why do countries exist? To protect the interests of the citizens. Water is an important issue

  • LatteLazy 2 years ago

    Agreed. We can do shitty shortsighted things for money, but foreign money is "dirty"!?