California’s water regulatory environment is a mess.  One result is that it’s expensive and often arbitrary.  It’s expensive to support, but that’s the not biggest cost.  The real loss is in the efficient use of water.

Since allocation in California is increasingly a political process, there is no reason to believe it’s economically efficient.  Indeed, there is every reason to believe that it is massively inefficient.  The lost production for foregone efficient uses is probably huge.

Here’s the intro to a recent AP piece:

FRESNO, Calif. (AP) — California water regulators flexed their muscles on Thursday by ordering a group of farmers to stop pumping from a branch of the San Joaquin River amid an escalating battle over how much power the state has to protect waterways that are drying up in the drought.

The State Water Resources Control Board issued the cease and desist order against an irrigation district in California’s agriculture-rich Central Valley that it said had failed to obey a previous warning to stop pumping. Hefty fines could follow.

As you read on, you eventually get to the human costs:

“I’ve made investments as a farmer based on the rule of law,” said David Phippen, an almond grower in the South San Joaquin Irrigation District. “Now, somebody’s changing the law that we depend on.”

Phippen said his grandfather paid a premium price in the 1930s for hundreds of acres because it came with nearly ironclad senior water rights.

Phippen said he takes those rights to the bank when he needs loans to replant almond orchards or install new irrigation lines. He fears that state officials are tampering with that time-tested system.

“In the water world, the pre-1914 rights were considered to be gold,” said Ed Casey, a water attorney who says the battle between the state water board and farmers “tests … the limitations on that piece of gold.”

The human costs are hard to measure, but they are real.  Families may lose their land and end up bankrupt.  Families may be destroyed, as financial issues are a major cause of domestic violence and family breakup.

What’s so disheartening about this is that it is entirely avoidable.  A rational system, one based on market prices, would provide for a far more efficient, and ultimately humane, allocation.