Start with the farmer
California farmers lead the way in sustainable agriculture while navigating water infrastructure limitations.
The entire food value chain, from farm to fork, is often a major contributor to a country’s gross domestic product (GDP), with the US Department of Agriculture stating that agriculture, food and their related industries contributed approximately 5.5 percent or USD 1,264 trillion to the US GDP in 2021. Food, specifically food prices, typically have a bigger impact on a country’s economy than this figure suggests, as food prices tend to be a disproportionate contributor to inflation, especially in developing countries. With half of the earth’s habitable land in agriculture production and nearly 1 billion people working in the agricultural industry, food and agribusiness form a USD 5 trillion global industry1. Farmers worldwide have an important role in implementing more sustainable farming practices as well as enhancing the efficiency of both food production and supply chain resiliency. In many ways, US farmers have taken the lead and are setting the standard, while at the same time maintaining their position as the largest agriculture exporter in the world2.
Sustainable farming in practice
Sustainable farming in practice
As a founding member of Leading Harvest, UBS is actively supporting US farmers across a multitude of regions and crop types to promote economical and sustainable farming practices. Leading Harvest is a nonprofit organization working to standardize sustainability measures and scale best practices in sustainable agriculture through their assurance program, the Leading Harvest Farmland Management Standard. The Standard is outcomes-based and addresses economic, environmental (eg soil health and water efficiency), social (eg public health and local communities) and governance (eg legal and regulatory compliance) matters through farm management. Leading Harvest recognizes that agriculture can be part of the solution and that alignment across the food value chain will allow farmers to demonstrate sustainability outcomes and unlock value at a global scale. The Standard, which was initially developed for the US farming sector, has successfully been adapted for Australia and continues to evolve across geographies.
Responsible water use in California agriculture
Responsible water use in California agriculture
More than ever, farmers today have an important role in furthering sustainability through the continued implementation and innovation of best farming practices. California agriculture is an example where sustainability, specifically through water management, is both environmentally and economically beneficial. More efficient water delivery and irrigation systems have improved crop yields and quality, reduced water applied per acre and positively affected water quality. In fact, California farmers’ water use has been declining since 1980, while the value of agricultural production has increased3.
Though California farmers have implemented more sustainable water practices, they are still affected by natural periods of drought and flood, which are increasing in intensity, duration and frequency. This highly variable precipitation poses both challenges and opportunities for the state’s agricultural production, which provides over one-third of the US’ vegetables and almost three-quarters of the nation’s fruits and nuts4. Thus, as a food security asset of the US, it is imperative to invest in and implement better water management strategies including the conservation, storage and diversification of water supplies to sustain California’s agricultural production.
California droughts occur in drier years when there is less snowpack and precipitation. Water storage impacts the length and severity of droughts as supplies in surface water reservoirs are depleted and water levels in groundwater basins decline. This reduces the necessary water available for agriculture, which uses approximately 40 percent of the state’s total water5.
Conversely, floods occur during periods of rapid snow melt and heavy precipitation. Though floods help to recharge groundwater and alleviate drought, excess water in populated areas can be detrimental to life and property. Due to limitations in the capacity to store and transport water effectively, this excess water often cannot be captured. California’s water infrastructure, which includes dams, aqueducts and pipelines, is frequently overextended during times of flood due to age and inefficiency. This has resulted in significant water losses due to dam failures, levee breaches and widespread flooding.
Despite farmers’ continued efforts, California is at a critical crossroads in regards to water management. While the Sustainable Groundwater Management Act enacted in 2014 addresses many issues such as overdraft and depletion, land subsidence and seawater intrusion, it does not fully address the need for improved water infrastructure.
California's need for water infrastructure investment
California's need for water infrastructure investment
California precipitation variability will undoubtedly increase, and as such will the need for a reliable and secure water source for agricultural production. Thus, public and private investment in modern, efficient and flexible water infrastructure is crucial.
Reservoirs in California have been experiencing historic highs in 2024, reaching as much as 150 percent of capacity due to multiple large storms6. Snowpack is also above-average this year ‒ the second in a row ‒ with statewide snowpack measuring 110 percent of its historical average7. Despite this abundance, most of California’s recent excess water has flowed into the Pacific Ocean due to inadequate water infrastructure. Dams are essential to capturing water during floods and storing water for periods of drought, which is especially important when considering California’s status as the nation’s most populous state8. In fact, the state has not constructed a new reservoir since the last regional dam, the New Melones Reservoir, was completed in 1979 ‒ over 40 years ago9. Yet over the same period California’s population has nearly doubled10.
In March 2024, Congress approved an additional USD 206 million in federal funding toward the California Sites Reservoir project, which is targeted for a 2026 groundbreaking. This investment makes for a total of USD 439.3 million in federal contributions to date. The project will provide an additional 1.5 million acre-feet of storage capacity, improving the state’s water reliability and resiliency.11
While this is a start, billions of dollars of public and private capital will be required to address California’s water infrastructure challenges. In the short term, the continued implementation of more sustainable water management practices, including less capital-intensive groundwater recharge practices, is necessary. However, long-term capital-intensive water infrastructure projects such as the Sites Reservoir are the solution to sustaining California’s agricultural production, which is critical for US food security.
Important information
Leading Harvest is a nonprofit organization that mobilizes the entire value chain to accelerate the transition to a more sustainable and resilient global agricultural system. It provides third-party audited standards that create trust throughout the business ecosystem while driving and validating improvement across the supply chain. UBS is a founding member of Leading Harvest. 100% of UBS’s farmland acres under management are enrolled in the Leading Harvest Farmland Management Standard as of 2020, the inaugural year. 100% of UBS’s enrolled farmland acres are certified to the Standard by an independent, third-party auditor as of 2023. For more info about Leading Harvest, please consult the webpage here and learn more about the Standard here. UBS’s certification and surveillance audit reports are publicly available here. Enrollment fees based on acreage and crop type are paid to Leading Harvest by program users annually.
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