Agriculture losses from drought set to jump 23% this year, but economy is coping

By Niina Heikkinen | 06/03/2015 08:14 AM EDT

This year, California farmers will likely experience worse drought conditions than they did in 2014, but a preliminary report suggests the economic impacts won’t be as severe as some researchers had anticipated.

This year, California farmers will likely experience worse drought conditions than they did in 2014, but a preliminary report suggests the economic impacts won’t be as severe as some researchers had anticipated.

According to data collected by researchers at the University of California, Davis, the amount of available surface water supply will be about 33 percent less on average.

While the reduced water level is significant, increased groundwater pumping is expected to help buffer the agricultural sector by making up for 70 percent of the supply deficit, said Jay Lund, director of the UC Davis Center for Watershed Sciences and one of the co-authors of the study.


The researchers presented their findings to the State Board of Food and Agriculture meeting in Sacramento yesterday.

Altogether, the agricultural sector would need to increase groundwater pumping by 6.2 million acre-feet, at a cost of nearly $600 million, to help make up for the 8.7-million-acre-foot reduction in surface water availability this year. (An acre-foot is the amount of water needed to fill an acre of land with a foot of water. One acre-foot is equal to about 325,851 gallons.)

The researchers predicted that the combined crop, dairy and livestock revenue losses would total $1.2 billion this year, a 23 percent increase in economic losses from 2014. In total, direct costs to the agricultural sector in California are expected to be $1.8 billion, with statewide economic costs reaching $2.7 billion.

Compare those figures to the state’s $45 billion agricultural economy, and California is looking at a relatively small economic hit from the drought this year, based on this preliminary work. However, for the small farm owners and seasonal workers who will bear the brunt of those losses, the impact is anything but insignificant, said Richard Howitt, a professor emeritus at agricultural and resource economics at UC Davis.

Idaho — a water model for Calif.?

The researchers predicted that the lower water supply would lead to about 18,600 lost jobs, mostly among contracted seasonal workers who are displaced when farmers decide not to cultivate as much land due to irrigation costs. The job loss numbers include undocumented workers, according to Josué Medellin-Azuara, a research scientist at the UC Davis Center for Watershed Sciences and a study co-author.

Based on model data, the researchers estimate that farmers in California left about 564,000 acres fallow due to drought conditions this year, with much of that acreage in the Central Valley. The biggest change in fallow acreage is in the parched Tulare Lake Basin, where farmers have left about 303,000 acres uncultivated.

While farmers in areas like the Tulare Basin are leaving more land fallow because of the high cost of purchasing water from elsewhere, farmers in the Sacramento River Basin (with 177,600 acres of fallow land) may find it more lucrative to sell their water than to plant their own crops, according to Howitt.

The ability to transfer water between districts is playing an important role in helping the region cope with what is now the state’s fourth year of drought. However, at present, the state has no centralized way to quantify or track who is trading water and at what price, according to Howitt.

When speaking before California’s Board of Food and Agriculture, Howitt urged the state to follow the lead of Idaho, which has pioneered the use of remote satellite data to track groundwater levels. The satellites work by measuring the energy difference above and below crops.

"If you want to know how to run a water system, look at Idaho. Why aren’t we there?" he said.

Murkowski calls for state-federal collaboration

Across the country, in Washington, D.C., Senate Energy and Natural Resources Committee Chairwoman Lisa Murkowski (R-Alaska) held a hearing yesterday to discuss drought conditions throughout Western states.

"Much of the West has been in varying degrees of drought for the past 15 years and the impacts are significant. In California and other parts of the west, farmers and others are feeling the pain of the drought — some communities no longer have running water and individuals in farming communities are losing jobs," Murkowski said in a statement. "Moving forward, state and federal officials must continue working together to ensure the delivery of water where it is needed."

Meanwhile, Sen. Maria Cantwell (D-Wash.), the ranking member of the committee, called for better water management strategies in her own state.

"We need to develop bold, innovative, 21st-century strategies for water management that not only respond to drought conditions today, but also prepare us for an uncertain future. This requires new ways of thinking and collaborating, and not just incremental changes at this point in time," she said in a statement.

Cantwell cited Washington Department of Agriculture estimates predicting that 2015 crop losses would cost the state $1.2 billion.