USA - California faces $2.7 billion hit from drought

03.06.2015 241 views

This summer’s fourth year of drought could cost California farmers $1.8 billion in lost crop production and groundwater pumping expenditures, or about 4 percent of the state’s agricultural economy, University of California, Davis, researchers said Tuesday.When accounting for its indirect and induced impacts on other economic sectors as well, “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 university’s Center for Watershed Sciences said.On average, California farmers face a loss of 33 percent of their normal water supplies, according to the estimates presented to Tuesday’s meeting of the state Board of Food and Agriculture.That should cause 564,000 acres of farmland to go fallow, compared to a normal year. Farm revenue losses from crops could hit $856 million, dairy income will drop by $250 million and livestock losses will amount to $100 million.But those impacts are uneven, with San Joaquin Valley farmers taking the worst hits. Some growers will lose all their irrigation supplies, while some will have all the water they need.For affected farmers, it will be devastating, said John Kautz, Lodi area vineyard and orchard crop grower and Ironstone Vineyards owner. He addressed the state board following its formal discussion of the UC report.To the board he said the lessons of the current drought is the state’s failure to create new reservoirs or groundwater recharging facilities in recent decades.“We have to build storage and we have to prepare for the next drought,” he said. “I’ll guarantee you we’ll have another drought.”Without that resource today, farmers will have to do what they can to adapt to having a lot less water.“You going to dry up, fallow and otherwise underutilize quite a bit of ground in our area,” he said after the meeting.Kautz said farmers with multiple crops, like himself, will forego less-valuable field crops in favor of more valuable tree and vineyard plantings.“The lesser crops will be the first to go, not get planted,” he said. “That’s all going to affect your tax base, your workers’ wages, on and on and on.”Stockton economist Jeffrey Michael, who has also weighed the drought’s impact on the state and regional economy, said the UC Davis estimates were well considered.“This seems to me to be a reasonable estimate of substantial drought impacts,” he said.“Based on what we we’re hearing from most people, we’re expecting a 20 percent higher impact this year compared to last year. These estimates are pretty close to that.”Michael, director of the Center for Business and Policy Research at University of the Pacific, generally agreed with the UC Davis estimates for fallowed land and crop losses, but said they may have overstated the potential job losses.“I would be a little bit more cautious,” he said.There is a bit of well-educated "guesstimating" involved, Michael allowed.“Making a forecast like this is something like a three-combination pool shot,” he said.

Source - http://www.recordnet.com/

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