Drought has already cost close to $2 billion and 14,000 jobs, and it’s likely not over yet
In 2021 alone, researchers estimate that drought conditions in California resulted in $1.7 billion in direct and indirect costs, more than 14,000 lost jobs and nearly 400,000 acres of fallowed farmland.
A new report estimates that in 2021, drought conditions cost California agriculture $1.2 billion and another half a billion dollars in other sectors. The report, written by researchers at both UC Merced and the Public Policy Institute of California (PPIC), blames these economic impacts on one of the driest water years on record, which resulted in huge water losses even after tapping into millions of acre feet of groundwater.
“We estimated that there was an approximate cutback of 5 million acre feet of water from surface water shortages—essentially how much the federal and state water projects did not deliver compared to relatively recent normal delivery conditions,” said lead author Josué Medellín-Azuara, an environmental engineering professor at UC Merced. Even after high levels of groundwater pumping, “we came up with a shortage of about 1.4 million acre feet of water,” he said.
As a result, the drought cost nearly 14,000 part-time and full-time jobs and wiped out huge swaths of farmland. “This resulted in about 395,000 acres of fallowed land, mostly in the Central Valley,” Medellín-Azuara said. According to the report, fallowing disproportionately affected rice in the Sacramento Valley, cotton in the San Joaquin Valley, and grain and field crops in other parts of the state. Reduced yields were especially apparent among Russian River grape growers and in forage fields on dairy farms.
Those estimates don’t include the effects of water cutbacks due to the Sustainable Groundwater Management Act, which the PPIC has projected could result in more than a half a million permanently fallowed acres over the coming decades, or of lingering supply chain problems and the rising prices of fuel and fertilizer due to Russia’s invasion of Ukraine.
As California enters into what could become the third year of drought, Medellín-Azuara warns rainfall this coming month will set the tone for the rest of the year. “If these conditions continue for the next weeks with no additional precipitation, we’re likely to have the compounding effects of the previous two years on this one as well,” he said.
Mike Wade shares Medellín-Azuara’s concerns. As the Executive Director of the California Farm Water Coalition, Wade projects economic losses this year could rival those felt in 2015, which was the lowest point of California’s previous multi-year drought. “We’re expecting much worse this year, and that has to do with a variety of factors including the amount of water that’s in storage going into the year,” he said.
Wade is confident that a large proportion of fields fallowed in the last year or two will eventually come back into production, although “some of it may take a while to get to full production if we’re talking about permanent crops that were taken out and end up getting replanted,” he said.
“But what we really have to be concerned with is the overall impact on rural communities, on jobs, on the ability to grow food for California and nation. Especially as world events unfold, I don’t think there’s a more pressing issue than food security.”
Wade believes it’s too late to build infrastructure to guard against the current drought. But he asserts the state should be preparing now for the next drought, by funding projects to bolster the state’s water supply. “And it doesn’t mean building a 700-foot-tall concrete dam or something like that,” he said. “We can do a better job of managing floodplains, of doing flood irrigation on agricultural lands to improve groundwater recharge, to manage flood flows and get them out and away from rivers where there’s potential for damage to rural communities, and get them to areas where we can capture and save that water.”