California drought to cost state economy US$2.7B in 2015, study says
California's severe drought is expected to be worse for the state's agricultural economy this year because of reduced water availability, according to a recent report. 
A preliminary estimate by the University of California (UC) Davis Center for Watershed Sciences estimates farmers will have 2.7 million acre-feet less surface water than they would in a normal water year — about a 33% loss of water supply, on average.
It said the impacts were concentrated mostly in the San Joaquin Valley and are not evenly distributed - individual farmers will face losses of zero to 100 percent.
"Expanded groundwater pumping will offset more than 70 percent of this surface water deficit, according to our modeling of how farmers are likely to respond," the report said.
"This leaves a shortage of 2.5 million acre-feet — 9 to 10 percent of the amount normally applied to crops — compared with a net water shortage of 1.5 million acre-feet in 2014."
The estimates, prepared for the California Department of Food and Agriculture, also show that farmers will fallow roughly 560,000 acres or 6-7% of California’s average annual irrigated cropland.
"Economically, the drought seems on track to reduce crop, dairy and livestock revenues by $1.2 billion this year. Pumping costs are expected to reach nearly $600 million," the report said.
"Overall, the drought is estimated to cause direct costs of $1.8 billion — about 4 percent of California’s $45 billion agricultural economy.
"When we account for the spillover effect of agriculture on the state’s other economic sectors, the total cost of this year’s drought on California’s economy is $2.7 billion and the loss of about 18,600 full and part-time jobs."
The drought is said to have induced job losses even while total agricultural employment continued to grow. The UC Davis Center estimates further job losses will occur in 2015.
As with last year, groundwater, global markets and water markets are greatly reducing the economic impacts of the drought on California’s agriculture and consumers worldwide.
"Still, considerable local suffering will remain in harder-hit areas," the report said.
Photo: Wikimedia Creative Commons
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