Water and air pollution and increasing pesticide use are raising the rates of cancer, asthma, and other health problems in California, particularly among children, poor city dwellers, and farm workers, according to a report released yesterday by an environmental health advocates group. The Environmental Health Policy Alliance, formed last year to advise California Gov. Gray Davis’s (D) administration on environmental health issues, said aggressive steps are needed to reverse diseases, including strong air pollution rules and a phaseout of pesticide use. California’s childhood cancer rates are 10 percent higher than they were 20 years ago, the group found. About 600,000 California children have asthma, a 160 percent increase since 1980. And at least 1,500 farm workers died from pesticide poisoning in 1996.