Drought takes 2 7 billion toll on California agriculture

The drought to cost California's agricultural economy $1.8 billion this year, about four percent of California's $45 billion agricultural economy, according to UC Davis Center for Watershed Science
Drought takes 2 7 billion toll on California agriculture

The drought is expected to cost California’s agricultural economy $1.8 billion this year, about four percent of California’s $45 billion agricultural economy, according to a new economic analysis by researchers at the UC Davis Center for Watershed Sciences.

When indirect costs are included — such as losses to fertilizer suppliers, truck drivers and corner stores — the total economic cost of this year’s drought to the state is estimated to be $2.7 billion and the loss of about 18,600 jobs.

In a region known as the nation’s produce basket, an estimated 564,000 acres of irrigated cropland will be pulled out of production this summer, up from 428,000 acres last year, the UC Davis researchers told the State Board of Food & Agriculture at a Tuesday morning meeting.

This will trigger losses of $856 million in crop revenue and $350 million in dairy and livestock value, as well as $595 million in added costs due to additional well-pumping, based on NASA space satellite imagery and an economic analysis by the UC Davis team, lead by director Jay Lund.
The greatest job losses are among so-called "contract laborers," who are hired seasonally to plant and harvest crops.

The pain is not spread uniformly across the state, but is most profound in the southern San Joaquin Valley — among the poorest towns in the state. "Tulare is taking the hardest hit," said the report’s lead author Richard Howitt, a UC Davis professor emeritus of agricultural and resource economics.

The study’s estimates are preliminary and will be revised as the UC Davis team gets new information and a clearer picture of irrigation water availability, water transfers and acreage of major crops. Their findings are based on how much water will be delivered from the state and federal projects and surveys that assess local surface water supplies and groundwater substitution.

Groundwater substitution — pulling up water from underground aquifers, via wells — has kept the problem from getting worse, substantially buffering crop fallowing, they said. Employment losses are also softened by the growth in non-agricultural sectors of the Central Valley economy, such as industry and construction.

This study did not addrress the long-term costs of groundwater overdraft, such as higher pumping costs and greater water scarity. "The socioeconomic impacts of an extended ground, in 2016 and beyond, could be much more severe," said Lund.

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