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California agriculture suffers from $1.2 billion drought

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Last year’s severe drought caused California’s agribusiness industry to lose an estimated 8,745 jobs and shoulder $1.2 billion in direct costs as water cuts forced growers to lay fallow farmland and pump more groundwater from wells, such a new study.

In a report prepared for the California Department of Food and Agriculture, researchers calculated that reduced water supplies left 395,000 acres of farmland dry and unplanted — an area larger than Los Angeles. When estimating the cost, they factored in crop losses and higher costs of pumping more groundwater.

California’s agribusiness is the largest in the country, with average annual sales of $50 billion and employing more than 400,000 people. The researchers’ analysis shows that the past year of drought has had a significant economic impact, and those costs are likely to accumulate as climate change intensifies drought and California implements regulations to curb chronic groundwater overpumping.

The report, part of a larger three-year study, did not examine how the elimination of some full-time and part-time jobs would affect farm workers. The authors said some workers have turned to other jobs, travel longer distances, or relocate.

“These farm workers are among the lowest-income group in the state, particularly in the Central Valley,” said Josué Medellín-Azuara, water resources economist and associate professor of civil and environmental engineering at UC Merced. “So when the climate hits, these communities will be hit harder.”

Medellín-Azuara and colleagues from UC Merced, UC Davis, and the Public Policy Institute of California estimated changes in acreage of irrigated arable land over the past year compared to 2018. They surveyed irrigated districts, analyzed water data, and reviewed satellite data to identify changes in arable land to track .

In addition to considering the direct impact on farms, the researchers estimated the “spillover effects” across the economy as a whole and found that the analysis calculated the overall impact on more than 14,600 lost jobs, both full-time and part-time, and US$1.7 billion -Dollar increased on gross revenue losses.

The state is now entering a third year of drought. Many reservoirs remain at low levels and snow cover in the Sierra Nevada is 67% of the average for this time of year. Federal water managers announced this week that many farmers should prepare to not receive water from the Central Valley Project.

If the state doesn’t get more rainfall in March, Medellín-Azuara said, “we’re likely to see bigger cuts from water agencies for agriculture this year, and then the impact can intensify.”

Last year was one of the driest and hottest on record in California, falling during a major 22-year mega-drought in the west that research says is being made worse by global warming.

The researchers found that the economic impact on California agriculture last year was comparable to the impact in 2014, in the midst of the last major drought, which ended in 2016.

However, they also noted that this time the drought was more severe in the Sacramento Valley and North Shore regions, resulting in an increase in dry farmland and loss of revenue in those areas.

For example, the Russian River Basin has suffered from drier conditions over the past year, Medellín-Azuara said, “so the dryland map has changed a bit.”

His team found that the fallow acreage included paddy fields in the Sacramento Valley, cotton fields in the San Joaquin Valley, and farmland used to grow grain and other crops.

These shifts are occurring in conjunction with other long-term changes in harvests driven by world markets and other factors. Over the past decade, acreage for wheat, cotton and alfalfa has declined, while new plantations of high-quality pistachios and almonds have spread across much of the farmland.

The report’s authors cited statistics showing that milk remained the state’s top agricultural commodity in 2020, followed by almonds and grapes.

The research shows a significant economic toll on agriculture, particularly in the Central Valley, where the economy is heavily dependent on agriculture, said Alvar Escriva-Bou, co-author and senior research fellow at the Public Policy Institute of California.

“It’s a lot of money, a lot of jobs,” Escriva-Bou said.

The study focused on lost revenue and pumping costs, but did not estimate gains in the agribusiness.

Farms in the Central Valley have long pumped more groundwater during droughts, and water levels have been falling for decades. State legislatures passed the Sustainable Groundwater Management Act in 2014, which established a framework for groundwater management and required local authorities to develop plans to address chronic overpumping problems.

Local groundwater authorities have developed plans to begin implementing the law by 2040, with state officials overseeing the process and reviewing the plans.

Meanwhile, falling water levels in agricultural areas have left more rural homeowners, including many farm workers, struggling with wells that have dried up. The state received reports of 975 household wells drying up in 2021, many in Central Valley agricultural areas.

The law is expected to introduce phased restrictions on groundwater pumping that will reduce stress on depleted aquifers, and these restrictions will eventually force growers to allow some farmland in the San Joaquin Valley to dry.

Escriva-Bou and other researchers have estimated that by 2040, at least 500,000 acres of farmland will likely no longer need irrigation to meet groundwater sustainability goals.

He and his colleague Ellen Hanak have presented a list of suggestions for improving the implementation of the Groundwater Act. Their recommendations include accelerating “demand management” or limiting pumping, while also planning how some arable land can be converted to other uses such as solar farms and habitat restoration areas — a direction state officials have supported by giving US$50 million. Dollars have been budgeted for a “repurposing” of land ” program.

Steps to reduce groundwater pumping should be accelerated in areas with falling water levels, Escriva-Bou said.

“We need to accelerate this to be more resilient. Because if not, we’re more vulnerable to droughts like this,” Escriva-Bou said. At the same time, he said: “We need to think about alternative income opportunities for farmers and communities.”

According to state data, California agriculture consumes nearly 80% of the water diverted and pumped for human use in an average year.

Medellín-Azuara and other researchers have written that they believe California agriculture will use less water over the long term due to the Groundwater Act and other factors, including increased development. They have also said they expect the state’s agricultural industry to continue to make efficiency improvements and benefit from growing demand for their specialty crops.

“California agriculture is very resilient and innovative,” said Medellín-Azuara. “Overall, we are weathering the drought and also adapting to future droughts.”

Agribusiness officials said the economic losses, coupled with the federal government’s announcement of minimum water supplies, suggest California needs to build infrastructure projects to capture and store more water, both in groundwater and surface reservoirs.

The decline in agriculture due to water scarcity has broader economic implications, affecting both local governments and the workers who transport food, said Danny Merkley, director of water resources at the California Farm Bureau.

“It’s a tremendous achievement and it’s only going to get worse before it gets better as we see SGMA, the Sustainable Groundwater Management Act, unfold and make an impact,” Merkley said. He likened groundwater to a savings account and said the state has cut surface water supplies — like reducing deposits into a checking account — while restricting “our ability to go to our fallback or savings account.”

Merkley pointed out that California voters passed a $7.5 billion water bond measure, Proposition 1, in 2014 and some of the funds are earmarked for infrastructure and water storage projects. He said the toll on agriculture shows California should continue building these projects to capture more water when wet weather returns.

https://www.latimes.com/california/story/2022-02-25/california-agriculture-takes-1-2-billion-hit-during-drought California agriculture suffers from $1.2 billion drought

Tom Vazquez

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