California has a perfectly good supply of water. Usage simply far outstrips that supply, much as it does in the central plains. There's quite a few reasons behind the large agricultural industry there though. The first and biggest reason is that Central Valley is simply the largest area of high grade soil anywhere on earth and the neighboring regions are extraordinarily fertile land as well. Secondly, California is largely oriented north to south and the state has three very different seasonal cycles in the north, center, and south. The north gets quite a bit of rain, but is more mountainous and less suitable for large megafarms in most areas. The center has several major rivers and valets that are dammed to collect the moderate rainfall and stays relatively temperate year round. However, when the north and center can't grow summer crops in winter, the south is warm enough that it can. Over 90% of winter greens come from imperial and Yuma counties. The combination of incredible and abundant farmland with year round agriculture and an enormous industrial base means that California's enormous water resources are completely inadequate.

Is California really the 'breadbasket of America'? Admittedly, the state grow huge amounts of vegetables and nuts. However, far more grain is grown in the midwest/plains. California only produces significant amounts of rice, but compared to these other states its grain production is very small.