Cost of Calif. crisis climbs to $2.74B — study
The statewide impact to agriculture and related industries is $2.74 billion, up from $2.2 billion in 2014, according to a report out today from the University of California, Davis, Center for Watershed Sciences.
The state’s agricultural economy will lose about $1.84 billion and 10,100 seasonal jobs because of the drought, with the Central Valley hardest hit, the report says. That’s about 30 percent more workers and cropland out of production than last year. Most idled land is in the Tulare Basin.
The loss of the seasonal jobs, which is directly related to farm production, increased from researchers’ estimate last year of 7,500 job losses. After adding in what the study called “spillover effects” of the farm losses on all other economic sectors, the employment impact of the drought more than doubles to 21,000 lost jobs.
Several small rural communities continue suffering from high unemployment and drying up of domestic wells because of the drought, particularly in the Tulare Basin, the study says.
“If a drought of this intensity persists beyond 2015, California’s agricultural production and employment will continue to erode,” said co-author Josué Medellin-Azuara, a water economist with the UC-Davis Center for Watershed Sciences.
California is the world’s biggest food producer. Demand and prices for many of its fruits, nuts and vegetables have helped sustain the farm economy, the study says. Intrastate water transfers and shifts in food growing locations also have helped sustain the industry.
But farmers lacking water are pumping deeper from groundwater and drilling more wells. Some of the heavy pumping is in basins where use of the groundwater “greatly exceeds” replenishment of aquifers. That can lead to further sinking of the land, water quality problems and diminishing reserves needed for future droughts.
Overall, however, the agricultural industry remains “robust,” the study said. The agricultural economy continues to grow because of the “vast but declining” reserves of groundwater, which will offset about 70 percent of the surface water shortage this year, the researchers said.
“We’re getting by remarkably well this year — much better than many had predicted — but it’s not a free lunch,” said lead author Richard Howitt, a UC-Davis professor emeritus of agricultural and resource economics.
The state’s farmers and ranchers currently earn more than $46 billion annually in gross revenues, a small fraction of California’s $1.9-trillion-a-year economy.
If the drought continues through 2017, the impact then will likely be 6 percent worse than this year, with the net water shortage increasing to 2.9 million acre-feet per year, the study said.