Desalination works great for residential water use. It doesn't help the farmers that want massive amounts of ultra-cheap water. Better farming techniques could help. What would help most of all is if water was properly bought and sold at market rates, so people with major water rights would sell instead of wasting.
There are policy reasons why we don't want water to go to the highest bidder - Food Security is one of the key reasons we give agriculture so much priority on water, even when economically it doesn't seem to make sense.
Would it really affect the amount going toward farming very much? Taking away a few percent of farming use could give other uses huge amounts of water.
I could see a scenario where instead of some farmers getting underpriced water, there are more farmers competing to produce food at marginally higher prices, leading more of them to use better irrigation techniques and solving the problem.
Subsidies can be applied to the food prices after this point if desired, without the side effects of water shortages.
The issue is farming, though. There is more than enough water supply in California for residential use, which makes up less than 20% of water consumption in California.
