DAVID GREENE, HOST:
Here in California, an historic drought is forcing farmers and ranchers to rethink just about everything about their businesses. By some estimates, California produces more than half of all the fresh food we consume in the United States. Now as NPR's Kirk Siegler reports, some are finding opportunity in these tough times.
KIRK SIEGLER, BYLINE: Ask sheep rancher Dan Macon what this drought is doing to his pocketbook, and he'll break it down for you real quick.
DAN MACON: It's like if you woke up one morning and lost 40 percent of the equity in your house. Our primary investment in our ranch is in these sheep, and we just sold 40 percent of our stock.
(SOUNDBITE OF SHEEP)
SIEGLER: He had to sell off 40 percent of his herd - cheap. There wasn't enough feed to go around. This is the worst drought he's had to cope with. He's been ranching here in the Sierra Nevada foothills, not far from Lake Tahoe, for two decades now.
MACON: With lower gross income, I've taken on an off-farm job. So in addition to taking care of the sheep, I work 30 to 40 hours a week.
SIEGLER: Macon works at the local extension office for the big ag school UC-Davis. That's where he picked up a few ideas on how to get through this. He used the drought as an opportunity to experiment.
(SOUNDBITE OF SHEEP)
SIEGLER: These sheep on this baked-brown pasture don't know it, but they're also helping trample thousands of experimental rye and wheat grass seeds into the soil.
MACON: This is part of our drought strategy, frankly, to find some grass species that we can introduce that'll do better in drier conditions.
SIEGLER: The hope is that if the big storms don't hit northern California again this winter, these grasses will do better than what's growing here now, and maybe the pastures will hold through another hot, dry summer. Another strategy is to make better use of technology from right here at his pickup.
MACON: I've got things on my cell phone that allow me to monitor our forage use and to map the areas that we're grazing that I didn't have five years ago, and that all adds to our capability to manage through the dry period.
(SOUNDBITE OF TRUCK)
SIEGLER: Manage with a lot less water. You're starting to hear this a lot from farmers and ranchers across California. This is an industry that has long been criticized for being reluctant to change. Agriculture still uses 80 percent of all the water in California. But talk to long-time farmers like Kirk Schmidt, and it's clear there's more to the story than that. Schmidt is also a water attorney and former Farm Bureau president in Santa Cruz County.
KIRK SCHMIDT: Agriculture is an industry and industrial research is always led by the demand of the industry. So there was no need for research in water conservation or reducing fertilizer use because there was no demand by the farmers.
SIEGLER: But with droughts becoming the new norm, Schmidt says farmers have to change. Traditionally, research focused on maximizing yields and profits regardless of water. Now it's starting to move the other way. How do you squeeze more out of less water and still turn a profit? Schmidt says a good analogy is to compare agriculture to the auto industry, which historically resisted tougher fuel standards. But today, new cars get better mileage than ever.
SCHMIDT: Much like the auto industry, the problem is, it's one thing to know this and it's another thing to have the knowledge of how to do this is. And that's where the delay is going to be.
SIEGLER: Sometimes it takes a crisis to act. This is what happened in Schmidt's own backyard in the fertile Pajaro Valley along California's central coast.
STUART KITAYAMA: I'm Stuart Kitayama from Kitayama Brothers. We're longtime flower growers here in Pajaro Valley.
SIEGLER: Farmers like the Kitayamas long relied on pumping groundwater to irrigate their crops. This is where much of the country's berries and cut flowers come from, until the day when those pumps started to run dry and get contaminated with seawater.
KITAYAMA: That was a big eye-opener for us that we could have something go bad that quickly.
SIEGLER: So farmers banded together with the local water agency to build a new state-of-the-art wastewater treatment plant. It used to be that all the wastewater from the cities and towns here was treated and drained into the ocean. But at the plant, it's now intercepted, treated and pumped back to the fields. Kitayama says at first, farmers like him were skeptical, but they came around.
KITAYAMA: So unless we solve this together with fairly expansive projects, we're all going to get left out and stuck on our own.
SIEGLER: This fall, with California in one of the worst droughts on record, the state recently took notice. The water agency and farmers here got a new grant to help expand the treatment plant.
UNIDENTIFIED MAN #1: We don't want this culture to go away. We want to make sure that there are adequate resources, and this is an important day here in Watsonville. Thank you.
SIEGLER: In a year where only three inches of rain fell on Watsonville, a little creativity has brought some opportunity in these tough times. Kirk Siegler, NPR News. Transcript provided by NPR, Copyright NPR.