A study (PDF) conducted by the UC Davis Center for Watershed Sciences estimated the state’s agricultural economy will lose about $1.84 billion and 10,100 seasonal jobs in 2015 because of the drought, with fallout likely being the worst in the Central Valley. But that’s also adding to their costs of doing business: Groundwater pumping is costing them an additional $590 million this year.
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A UC Davis study released in May estimated around 564,000 acres would be fallowed this year, but the update released Tuesday revised the impact “because water transfers, groundwater pumping and surface water deliveries have changed since our preliminary analysis”.
Still, the economists pointed out that California’s agricultural economy is growing despite the drought.
Despite what at first glance might seem like a ghastly snapshot, the industry overall remains robust and the agricultural economy continues to grow in this fourth year of severe drought, says the report.
The study says if California’s drought continues into 2017, the effect on the economy is likely to be about six percent worse than this year. “Agriculture is very resilient because of the underground water”, said Richard Howitt, professor emeritus of agricultural and resource economics and an author of the report. When considering the spillover effects of the farm losses on all other economic sectors, the employment impact of the 2015 drought more than doubles to 21,000 lost jobs.
The drought is leading to direct crop revenue losses of $900 million and is costing dairy and livestock producers $350 million, the report found. Crops most impacted include rice, alfalfa and corn.
“It surprised me a little bit how slowly the deterioration of agriculture is progressing”, says report co-author Jay Lund with the UC Davis Center for Watershed Sciences.
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California is the country’s top agriculture-producing state.
