The Iran Connection: Water Privatization in California

Two unlikely worlds collide.

As part of our Pistachio Wars blitz, Rowan and I did an interview with Max Blumenthal over at the Grayzone Project about the unlikely connection between America’s aggressive policies towards Iran and the billionaire-driven water grab going on in California.

Here are some snippets:

MB: How did the sanctions imposed on Iran by the Carter administration after the 1979 revolution affect America’s domestic pistachio market in general, and the Resnicks in particular?

YL & RW: Without out a doubt, President Carter’s embargo on Iran was what gave birth to America’s pistachio business. Historically, pistachios imported from Iran had dominated global markets, including in the US. When America was suddenly cut off from Iran’s pistachio supply after Carter’s economic blockade in the wake of the Iranian hostage crisis, it left a giant hole in the market and created the need for an alternative source of pistachios. At the time, pistachio farming happened on a small scale in the United States — the bulk of it in California’s Central Valley. Sensing a perfect business opportunity, farmers in California stepped in to fill the void. At that time, Stewart Resnick had just gotten into agriculture. He was a shrewd businessman and he seized the moment. 

From then on, America’s pistachio industry grew at crazy pace, with domestic output more than doubling every 5 years. In 2008, forty years after the embargo, America finally surpassed Iran as the world’s dominant producer of pistachios. And the bulk of America’s pistachio trade is controlled by one firm: the Wonderful Company, owned by Beverly Hills billionaires Stewart and Lynda Resnick…

MB: Has anyone from Resnicks’ Wonderful Company operation openly stated their intention to sabotage Iran’s pistachio exports through sanctions?

YL & RW: Iran has had America’s market closed to it pretty much since 1979. But more than half of their pistachios are exported internationally and are thus directly in competition with Iran’s exports. 

So battling and taking over Iran international marketshare — whether in Europe, China, South Korea Russia, India or Israel — has been a prime objective of the Resnicks and the greater pistachio lobby. This is done with sanctions, but it is also done with free trade agreements — lobbying countries through American government trade reps to raise tariffs on Iranian pistachios, while lowering tariffs on American pistachios to zero. 

They will use every tool they have to restrict and suffocate Iran’s pistachio industry. The Wonderful Company is very media and PR savvy so its executives and spokespeople don’t go out calling for war on Iran. But they are honest about Iran being their prime competitor and target. As one of their executives — in a very understated manner — told the press told the press not so long ago: “We don’t mind stealing share from the Iranians.”

MB: To what extent has the rise of domestic pistachio production, and particularly the growth of the Resnicks’ Wonderful Company impacted a water-deprived state like California? Would importing pistachios from a place like Iran or another pistachio-producing region take some of the pressure off of California’s water supply? And short of any market-based solution, what remedies can be applied to restore control over water to the public?

YL & RW: The two are directly connected. What makes pistachios different from other crops grown in California is that they grow on trees and cannot be fallowed in a dry year. With crops like cotton or alfalfa or lettuce or strawberries, farmers can simply not plant in a drought year when there is not enough water. But with pistachio trees it’s different. If you don’t water them, the trees die — which destroys years of investment that it took to bring them to maturity. There can be no water cutoff for pistachio orchards — they require a constant, year-round supply of water. But California has seasonal rainfall and periods drought. So in order to maintain their constant supply of water, California farmers — led by the Resnicks — have been draining aquifers and rivers at an alarming rate and are currently pushing through a devastating plan to siphon off of two largest rivers in California — all in order to feed the pistachio boom.

California’s water shortages cannot be solved through market mechanisms. A solution would require democratic control of water supplies. There needs to be a democratic political framework for determining how to use the state’s precious, over-tapped water supplies in a way that is maximally beneficial to the public and to the environment — to the future of the state. Water today is distributed purely based on raw economic power: it goes to the most powerful, most cutthroat business interests.

And that’s where we are today: not only are American pistachio farmers destroying California, but they are willing to risk war in Iran and the Middle East — all in order to boost and protect their lucrative pistachio business. 

There is a bigger issue here that goes beyond pistachios and water in California. The fact is that we in America cannot fix our belligerent and destructive foreign policy without first reigning in the economic interests that drive it and benefit from it. In that sense, the pistachio business is no different than oil companies or weapons makers — it’s just that it is not so well known.

Read the full interview here.

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—Yasha Levine