Impacts to Local Businesses

A water shutoff would impact the agriculturally-reliant Klamath Basin business community, resulting in employee layoffs, decreased valuations of land and assets in the Klamath Project area, and potential for a decrease in the local population.

• Between Klamath County and the Tulelake agricultural communities, Basin family farmers and ranchers contribute a combined $706 million to our local rural communities. Between 2012 – 2016 Klamath County agriculture provided approximately 5,500 jobs. In 2016, total employment was 17,435. That’s nearly 1 out of 3 Klamath County jobs related to agriculture. In 2012, the last year that such data was collected, the agricultural business sector in Klamath County Oregon contributed to the full time and part time employment of roughly 8,760 people. When you look at agriculture as a business entity within our County, it is one of the business sector’s largest employers. Examples of businesses, together with employment positions which are at risk from a water shutoff include equipment sale businesses, fertilizer distributors, fencing contractors, livestock trailer companies, restaurants, trucking companies, real estate companies, grocery and convenience stores, insurance providers, banks, and others.

We know what to expect

Based on what happened when Klamath Project water was curtailed in 2001, we know what to expect, should that be repeated again. The 2001 curtailment imposed impacts to the local community that were immediate and far-reaching:

• Loss of irrigation supplies devastated farmers and imparted an estimated $200 million economic ‘‘ripple’’ effect through the broader community
• Dramatic devaluation of both land and machinery assets
• Land debt-free retirees had to borrow against deflated land values to finance tax or living expenses
• Loaning institutions discontinued service to financially viable and low-risk farm operations
• Farm operations that successfully restructured debt in 2001 later went bankrupt. Infrastructure expenditures to increase water and energy conservation actions were postponed or abandoned

This year could be worse

As bad as the 2001 water curtailment was, a shut-off this year could be far worse.

First – a tribal water rights call made earlier this year has already left ranchers above Upper Klamath Lake without surface water, for the third straight year. The total acreage left without water will be much higher than in 2001.

Second – Klamath Project farmers and ranchers have already made decisions and planted their crops for this season. Enormous financial investments have been made and a return depends upon getting crops through to harvest in the fall.

Across the Basin, local family farms will lack the ability to pay bills and service debt. Collateral (land, equipment, crops and homes) will be forfeited. Bankruptcy would be common and families will be unable to recoup massive investments made this season to date. Long-term supply arrangements with valuable customers, developed over decades, would be lost. Similar impacts would occur for farm employees, as well as for the owners of agricultural businesses. The rural community dependent on water would lose its foundation. Hispanic communities would be injured or lost. There would be a mass exodus of unemployed farm workers.

There is a very real potential for hundreds of family farm and ranch families to be without any income or ability to support themselves if this litigation is successful. If the federal court supports the plaintiff’s lawsuit, the impact will be long-lasting and catalyze the eroding of our local communities and businesses.