Land values in California are all based on what that land can produce. If, for some reason, water allocation is cut short, the revenue potential of that land goes down. SGMA means water allocations are shrinking and shrinking this can result in less land that you can actually farm. The value of your land starts to depreciate when there is a reduction in your production. This article explains how to Increase your land value with Sustainable Groundwater Management Act (SGMA).
For example, if I had a hundred acres and I had to fallow twenty percent of that. That’s a 20 percent reduction on my revenue; 30 percent fallow not using that land means 30 percent reduction so on and so on. It’s like having an apartment building and not being able to rent 20% percent of the apartments.
What we offer
Here at UmidaAG what we emphasize on is that you can use that same amount of water allocation without having to fallow your land. Let’s say it’s only 50 percent for a hundred acres; it means you would have to typically retire 50% of your acreage. But at UmidaAG, we are actually able to stretch that 50 percent; you’re able to keep the full hundred percent acreage in production.
How It works
The way we do that is we provide a subsurface irrigation system that irrigates from the roots up. It eliminates all the water loss to evaporation. Because of that we save anywhere from 30 to 50 percent. We also make up additional water back into the groundwater table by injecting storm water or spring runoff into the system.
It is engineered so that the water flows across the whole row. It creates a virtual water table five feet below the surface. From that water table, it creates a moisture plume that the plants feed from.
SGMA valuation for banks, supply chain and investors
These pipes are not small; they are six inches in diameter which is much bigger than your cell phone if it’s standing up high. It’s a large capital investment into your farm but it secures the long-term viability of your orchard for many generations. It adds an asset and the evaluation of your farming continues to go up in value.
We help you get to SGMA compliant, that means you can say “I am groundwater balance” to the bank. You will be able to let them know they don’t have to discount your property or operating loans like everyone else due to SGMA.
You can also take that to your supply chain and show them that you have the acreage and you have the water availability to consistently supply them with the products that they desire. Maybe it’s almonds, peaches, apricots, cotton whatever it may be, you can secure your supply chain. It will allow them to report back to their investors that they are secure for the inputs of their agriculture products to make their products.
We know It’s new
We know it’s completely new and it’s scary, but 20 years ago in 1960 drip irrigation was new. It really started coming into California about 20-30 years ago. People were scared of how drip was going to help their orchards. Now it’s a standard. It’s the same thing with us, we have a new category, a new style of irrigation.
It might be scary in the beginning. But the leaders who adopt it early, are going to be ahead of the curve. Think of it as an opportunity to invest in your farm with upward potential. Or you can just sit and wait to see how SGMA plays out and most likely it’s going to be negative to the value of your farm and increase your land value.