How does SGMA affect California agricultural land?
SGMA — the Sustainable Groundwater Management Act of 2014 — requires California's overdrafted groundwater basins to reach sustainable pumping by 2040 (2042 for medium-priority basins). In practice it means pumping allocations, meters, and fees for wells that pumped freely for a century, and it is already repricing land across the San Joaquin Valley.
The mechanics: each basin is managed by a Groundwater Sustainability Agency (GSA) that adopts a plan, typically assigning each parcel a pumping budget that ramps down over time. Public estimates suggest 500,000 to 1,000,000 acres in the San Joaquin Valley may come out of irrigated production by 2040. Allocations, fees, and enforcement differ sharply between GSAs — sometimes across a road.
The value effect is real and uneven. Ground with surface water plus groundwater as backup holds value; ground that is groundwater-only in a critically overdrafted basin faces shrinking allocations and has already seen meaningful price discounts relative to dual-supply ground. Land with recharge potential or transferable allocation within a GSA can carry a premium.
If you are buying in California, SGMA diligence is now as fundamental as a title search: identify the basin and its priority status, get the GSA's current allocation rules for the parcel, and model whether the allocation covers the intended crop at maturity. An honest answer is sometimes "this ground supports permanent crops today but not in 2035." A California water attorney or groundwater consultant can run this analysis quickly, and it belongs in every San Joaquin Valley purchase decision.
The Turnrow angle
Turnrow underwrites SGMA-exposed ground on its post-allocation reality, not its historical pumping. Loans of 12–36 months mean we care most about supply through the loan term and the exit — but the appraisal must reflect the basin's trajectory.
Farm land loan program details →
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