The fourth year of unrelenting drought in California will cost the state agricultural economy $1.8 billion – 20 percent more than in 2014 – although farmers and their irrigation districts “are showing more resilience to the drought than many had anticipated,” says a report by the UC-Davis Center for Watershed Sciences. Continuation of drought into 2016 or 2017 “is likely to slowly erode the state’s agricultural production and employment,” says the report.
Some 542,000 acres of irrigated cropland, most of it in the Tulare basin, were idled this year due to shortages of water, compared to 426,000 acres fallowed in 2014. Growers pumped enough groundwater from wells to offset 70 percent of the reduced supply of irrigation water from rivers and reservoirs. “The ability to irrigate permanent crops with groundwater or marketed water will largely prevent the sector from more expensive fallowing of higher-valued crops and permanent crops,” says UC-Davis.
Producers are forecast to lose $900 million in crop revenue and $350 million in dairy and livestock revenue on top of $590 million in additional pumping costs, said the report. In 2014, the crop and livestock losses were pegged at $1 billion with pumping costs up by $500 million. UC-Davis forecast losses of 10,100 seasonal farm jobs this year.
The statewide impact for 2015 was estimated at $2.7 billion, with total job losses of 21,000. Last year, the estimates were $2.2 billion in statewide costs and 17,100 jobs lost.
Growers have shifted plantings of tomatoes northward into the Sacramento Valley and away from the San Joaquin Valley. Less rice was planted in the Sacramento Valley because of the shift to tomatoes and because some growers transferred some of their water to other users. The average water price of $650 per acre-foot “generates substantially more revenue per acre than rice or other field crops grown in the Sacramento Valley,” said the report.
The report lauded an agreement in May by senior water-rights holders in the Sacramento-San Joaquin Delta to reduce their water diversions by 25 percent in exchange for a promise from the State Water Resources Control Board of no further cuts.
“While it remains too early to assess the water made available by these actions, this program is a fine example of innovative and equitable institutional changes which allow for both more flexibility and increased predictability in drought response, with a likely reduction in overall environmental and economic risk. This principle of trading risk and uncertainty for use reduction could be applied in other situations,” says the report.