As LA burns, one billionaire couple are poised to have a potentially big pay day. Let me introduce you to Lynda and Stewart Resnick.
The Resnicks have made their wealth mostly through agriculture. You have to remember, California’s Central Valley is one of the world’s bread baskets. They’ve capitalised on this to become some of the richest people on Earth, with an estimated net worth of $11.2 billion. Lynda popularised mail-order flower baskets back in the late 70s. She and Stewart then started to explore bigger agricultural pursuits. Today, the Resnicks own the Wonderful brand of pistachios, almonds, and mandarins, Pom Wonderful pomegranate juice, and Fiji Water. While they’ve used this wealth for many philanthropic initiatives (Lynda has even said Stewart should be canonised), on balance they’re having more of a negative impact.
That’s because to be successful in agriculture requires one big thing: water. Since California’s basically a desert masquerading as paradise, water’s in short supply. The majority of the state has been in a drought since I was a kid, with this more acute now than ever. To feed the water-hungry south, trillions of gallons flow daily from the Sacramento-San Joaquin River Delta in the north along hundreds of miles of canals to Southern California. Over nearly a century of doing this, the Delta is near collapse. If anyone is scared of that, it’s farmers like the Resnicks who use hundreds of billions of gallons of water a year. In fact, the Resnick’s crops use more water than all homes in Los Angeles combined.
But this story goes back further, to 1994 and the sweetheart deal that gave the Resnicks control of the taxpayer-funded Kern Water Bank. A secret meeting of politicians and agricultural companies produced the Monterrey Amendments, a series of changes to California’s water regulations. The biggest change was on who had priority of water during times of drought. Originally, urban areas were given priority since this is where people live. After Monterrey, agricultural companies got priority. Any reserves they had could then be sold back to the government for a profit. They basically gained control of California’s most valuable natural resource and price gouged people who could barely afford it. Between 2000 and 2007, for example, the Resnicks bought water for as little as $28 per acre-foot (that’s how water is measured) and sold it for as much as $196 per acre-foot to the state, pocketing more than $30 million in the process.
Monterrey also gave a handful of people, including the Resnicks, control of the Kern Bank.
All this has consequences, some of which we’re seeing in the LA fires. The Resnicks have single-handedly reduced the availability of water to fight fires, dried up the land making fires more likely, and through ownership of water rights have tied a resource everyone should have access to in bureaucracy and unnecessary red tape, while increasing the cost to hard-working Californians.
Source: linkedin.com |
