If you try to raise the price of water beyond that which farmers could work around, they'd likely just pack up and leave, like ChristianKI says. And nobody wants that, either.
I am entirely fine with that. There is no right to grow water-thirsty crops in the desert.
Look at one of the documents linked in the OP. If the farmers stop growing alfalfa hay which is one of the thirstiest crops and replace it with almost anything else, California will save a lot of water.
I think we need a discussion thread for the californian drought going on. I would like to compile information in the main post and would like help compiling it. If we really are proud to be effective altruists then this is an area we should really figure out.
Any one have any good ideas on how we can help?