The history of the San Joaquin River Exchange Contractors dates back to the early 1870’s when San Joaquin and Kings River Canal Company, and Miller and Lux, constructed canals to divert water from the San Joaquin River and the Kings River to allow for irrigation in the western portion of Fresno, Madera, Merced, and Stanislaus counties. These canals were essential to the creation of the agriculture industry in the Central Valley and were the beginning of what has come to be the most important agricultural region in the United States.

As the need for more irrigation and farmable land in the Central Valley increased, the United States Department of Interior in 1933 started the Central Valley Project, a vast undertaking to build dams throughout the Central Valley that utilized the Sacramento, American, and San Joaquin Rivers. One of the dams that was being considered at the time, the Friant Dam located north of Fresno, was dependent upon water being diverted into storage from the San Joaquin River with the goal of delivering it to the east side of the Valley.

This would impact the water supply from the San Joaquin River that farmers on the west side of the valley depended on. In order to allow the project to continue, the west side farmers agreed to an exchange contract, whereby they would instead receive a distribution of water from Sacramento River in “exchange” for water from the San Joaquin River. The Exchange Contractors, as they came to be known, also retained their rights to the San Joaquin River water. This means that if in a given year the water deliveries from the new Sacramento River water source are short of the amount they are guaranteed in the contract, the Bureau of Reclamation makes up the difference by receiving a distribution from their original water source, the San Joaquin River.