Drought Economic Impact May Exceed $2 Billion

Researchers at UC Davis have updated their analysis of the potential impact of the drought on agriculture and the California economy. The results were based on several water supply and land use models and economic impact forecasting models. The study found that the 2014 drought will result in a 6.6 million acre-foot reduction in surface water available to agriculture. The loss in surface water supply may be partially replaced by increased groundwater pumping by 5 million acre-feet. The resulting shortage of 1.6 million acre-feet will result in significant fallowing of farm land and economic losses to farming and other sectors.

The researchers estimate that the drought will cause losses of $810 million in crop revenue and $203 million in dairy and livestock value, plus additional groundwater pumping costs of $454 million. The total statewide economic cost may be $2.2 billion, with a total loss of 17,100 jobs.

Some of the other findings include:

Several public and technical policy improvements were suggested by the researchers that could enhance California’s ability to deal with future droughts:

The report makes no mention of the need for more water storage or more aggressive urban conservation as necessary measures to reduce the impact of future droughts.

The analysis was conducted by staff associated with the Center for Watershed Sciences and the Agricultural Issues Center (AIC) at UC Davis. A complete copy of the report can be found at the web site: https://watershed.ucdavis.edu/.

Article written by Rob Neenan, President/CEO, California League of Food Processors

California League Of Food Producers