2015 Drought Costs Ag Nearly Two Billion!

DROUGHT COSTS CALIFORNIA AGRICULTURE $1.84B AND 10,100 JOBS IN 2015

The drought is tightening its grip on California agriculture, squeezing about 30 percent more workers and cropland out of production than in 2014, according to the latest drought impact report by the UC Davis Center for Watershed Sciences.

In 2015, the drought costs to the state’s agricultural economy will reach about $1.84 billion and 10,100 seasonal jobs, the report estimated, with the Central Valley hardest hit.

The analysis also forecasts how the industry will fare if the drought persists through 2017.

‘NOT A FREE LUNCH’

Currently, the industry overall remains robust. The agricultural economy continues to grow in this fourth year of severe drought, thanks mostly to the state’s vast but declining reserves of groundwater, which will offset about 70 percent of the surface water shortage this year, the researchers said.

California is the world’s richest food-producing region. Continued strong global demand and prices for many of its fruits, nuts and vegetables has helped sustain the farm economy along with intrastate water transfers and shifts in growing locations.

“We’re getting by remarkably well this year — much better than many had predicted — but it’s not a free lunch,” said lead author Richard Howitt, a UC Davis professor emeritus of agricultural and resource economics.

The heavy reliance on groundwater comes at ever-increasing energy costs as farmers pump deeper and drill more wells. Some of the heavy pumping is in basins already in severe overdraft — where groundwater use greatly exceeds replenishment of aquifers — inviting further land subsidence, water quality problems and diminishing reserves needed for future droughts.

Further, several small rural communities continue to suffer from high unemployment and drying up of domestic wells because of the drought, particularly in the Tulare Basin.

“If a drought of this intensity persists beyond 2015, California’s agricultural production and employment will continue to erode,” said co-author Josue Medellin-Azuara, a water economist with the UC Davis Center for Watershed Sciences.

MAJOR CONCLUSIONS

The UC Davis team used computer models and the latest estimates of surface water availability from state and federal water projects and local water districts. They forecast several drought-related impacts in the state’s major agricultural regions for the current growing season, including:

  • The direct costs of drought to agriculture will be $1.84 billion for 2015. The total impact to all economic sectors is an estimated $2.74 billion, compared with $2.2 billion in 2014. The state’s farmers and ranchers currently receive more than $46 billion annually in gross revenues, a small fraction of California’s $1.9 trillion-a-year economy.
  • The loss of about 10,100 seasonal jobs directly related to farm production, compared with the researchers’ 2014 drought estimate of 7,500 jobs. When considering the spillover effects of the farm losses on all other economic sectors, the employment impact of the 2015 drought more than doubles to 21,000 lost jobs.
  • Surface water shortages will reach nearly 8.7 million acre-feet, which will be offset mostly by increased groundwater pumping of 6 million acre-feet.
  • Net water shortages of 2.7 million acre-feet will cause roughly 542,000 acres to be idled — 114,000 more acres than the researchers’ 2014 drought estimate. Most idled land is in the Tulare Basin.

The effects of continued drought through 2017 (assuming continued 2014 water supplies) will likely be 6 percent worse than in 2015, with the net water shortage increasing to 2.9 million acre-feet a year. Gradual decline in groundwater pumping capacity and water elevations will add to the incremental costs of a prolonged drought.

GROUNDWATER LAWS COULD HELP

The scientists noted that new state groundwater laws requiring local agencies to attain sustainable yields could eventually reverse the depletion of underground reserves.

“The transition will cause some increased fallowing of cropland or longer crop rotations but will help preserve California’s ability to support more profitable permanent and vegetable crops during drought,” said co-author Jay Lund, director of the UC Davis Center for Watershed Sciences.

The report was primarily funded by the California Department of Food and Agriculture.

Other authors on the report include Daniel Sumner, a UC Davis professor of agricultural and resource economics and director of the UC Agricultural Issues Center, and Duncan MacEwan of the ERA Economics consulting firm in Davis.

Water Use in California – Analysis from the Public Policy Institute of California (PPIC)

Source: Jeffrey Mount and Jay Lund, UC Davis, and Emma Freeman, PPIC

Water in California is shared across three main sectors. Statewide, average water use is roughly 50% environmental, 40% agricultural, and 10% urban. However, the percentage of water use by sector varies dramatically across regions and between wet and dry years. Some of the water used by each of these sectors returns to rivers and groundwater basins, and can be used again.

Environmental water use falls into four categories: water in rivers protected as “wild and scenic” under federal and state laws, water required for maintaining habitat within streams, water that supports wetlands within wildlife preserves, and water needed to maintain water quality for agricultural and urban use. Most water allocated to the environment does not affect other water uses.

More than half of California’s environmental water use occurs in rivers along the state’s north coast. These waters are largely isolated from major agricultural and urban areas and cannot be used for other purposes. In the rest of California where water is shared by all three sectors, environmental use is not dominant (33%, compared to 53% agricultural and 14% urban).

Agricultural water use is holding steady even while the economic value of farm production is growing. Approximately nine million acres of farmland in California are irrigated, representing roughly 80% of all human water use. Higher revenue perennial crops—nuts, grapes, and other fruit—have increased as a share of irrigated crop acreage (from 27% in 1998 to 32% in 2010 statewide, and from 33% to 40% in the southern Central Valley).

This shift, plus rising crop yields, has increased the value of farm output (from $16.3 billion of gross state product in 1998 to $22.3 billion in 2010, in 2010 dollars), thereby increasing the value of agricultural water used. But even as the agricultural economy is growing, the rest of the economy is growing faster. Today, farm production and food processing only generate about 2% of California’s gross state product, down from about 5% in the early 1960s.

Despite population growth, total urban water use is also holding steady. The San Francisco Bay and South Coast regions account for most urban water use in California. These regions rely heavily on water imported from other parts of the state. Roughly half of urban water use is for residential and commercial landscaping. Despite population growth and urban expansion, total urban water use has remained roughly constant over the past 20 years.

Per-capita water use has declined significantly—from 232 gallons per day in 1990 to 178 gallons per day in 2010—reflecting substantial efforts to reduce water use through pricing incentives and mandatory installation of water saving technologies like low-flow toilets and shower heads. Coastal regions use far less water per capita than inland regions—145 gallons per day compared with 276 gallons per day in 2010—largely because of less landscape watering.

The current drought exposes major water use challenges. In the Central Valley, where most agricultural water use occurs, the failure to manage groundwater sustainably limits its availability as a drought reserve. The increase in perennial crops—which need to be watered every year—has made the region even more vulnerable. In urban areas, the greatest potential for further water savings lies in reducing landscaping irrigation—a shift requiring behavioral changes, not just the adoption of new technology.

Finally, state and federal regulators must make tough decisions about how and when to allocate water to the environment during a drought. They are faced with balancing short-term economic impacts on urban and agricultural water users against long-term harm—even risk of extinction—of fish and wildlife.

JUST IN: UC Davis’ Preliminary Findings on Drought Impact in Central Valley

Source Office of Public Affairs

Photo Source-Aquafornia

California’s drought impact will be a severe blow to Central Valley irrigated agriculture and farm communities this year and could cost the industry $1.7 billion and cause more than 14,500 workers to lose their jobs, according to preliminary results of a new study by the UC Davis Center for Watershed Sciences.

Researchers estimated that Central Valley irrigators would receive only two-thirds of their normal river water deliveries this year because of the drought.

The preliminary analysis represents the first socio-economic forecast of this year’s drought, said lead author Richard Howitt, a UC Davis professor emeritus of agricultural and resource economics.

“We wanted to provide a foundation for state agricultural and water policymakers to understand the drought impact on farmers and farm communities,” Howitt said.

The Central Valley is the richest food-producing region in the world. Much of the nation’s fresh fruits, nuts and vegetables are grown on the region’s 7 million acres of irrigated farmland.

The center plans to release a more comprehensive report of the drought’s economic impact on the state’s irrigated agriculture this summer.

The analysis was done at the request of the California Department of Food and Agriculture, which co-funded the research, along with the University of California.

“These estimates will help the state better understand the economic impacts of the drought, ” said CDFA Secretary Karen Ross. “The research confirms where emergency drought assistance will be needed most, and efforts are already underway.”

The UC Davis researchers used computer models and the latest estimates of State Water Project, the federal Central Valley Project and local water deliveries, plus groundwater pumping capacities to forecast the economic effects of this year’s drought.

The analysis predicted several severe impacts for the current growing season, including:

▪Reduced surface water deliveries of 6.5 million acre-feet of water, or 32.5 percent of normal water use by Central Valley growers. An acre-foot is enough water to cover an acre of land in a foot of water, or enough water for about two California households for a year.

▪ Fallowing of an additional 410,000 acres, representing 6 percent of irrigated cropland in the Central Valley.

▪ The loss of an estimated 14,500 seasonal and full-time jobs. About 6,400 of these jobs are directly involved in crop production.

▪ A total cost of $1.7 billion to the Central Valley’s irrigated farm industry this year, including about $450 million in additional costs of groundwater pumping.

▪ About 60 percent of the economic losses will occur in the San Joaquin Valley and Tulare Lake Basin.

Growers are expected to replace much of the loss in project water deliveries with groundwater, California’s largest source of water storage during drought years, said co-author Jay Lund, director of the Center for Watershed Sciences and a UC Davis professor of civil and environmental engineering.

“Without access to groundwater, this year’s drought would be truly devastating to farms and cities throughout California,” Lund said.

The additional pumping will cost an estimated $450 million and still leave a shortage of 1.5 million acre-feet of irrigation water, about 7.5 percent of normal irrigation water use in the Central Valley, according to the forecast.

While the current drought is expected to impose major hardships on many farmers, small communities and the environment, it should not threaten California’s overall economy, Lund said.

Agriculture today accounts for less than 3 percent of the state’s $1.9 trillion a year gross domestic product.Other authors on the report are UC Davis agricultural economist Josue Medellin-Azuara and Duncan MacEwan of the ERA Economic consulting firm in Davis.

California Drought Puzzle: Store or Conserve More Water?

(Photo: Paul Chinn, The Chronicle)

 

by Peter Fimrite, SF Chronicle

 

There was a time not long ago when much of civilized society considered each drop of river water that reached the ocean a wasted resource.

That was before environmentalists pointed out the benefits of the outflow to fish, wildlife and the ocean ecosystem, setting off an ongoing tug-of-war between fishermen and farmers in California that has reached a critical stage this year as the state struggles through a drought.

One thing that’s become clear amid the fallow cropland and rationing is that there is not enough water storage in California to sustain all the competing interests. The dilemma has again put a spotlight on the precious water that gets away.

In an average year, rain and snowmelt in California generate about 71 million acre-feet of water, some of which is captured in reservoirs or groundwater basins. An acre-foot is the amount needed to cover an acre with a foot of water, enough to supply an average household for a year.

About 32 percent of the 71 million acre-feet are used for agriculture and 10 percent for urban areas, according to the state Department of Water Resources’ chief hydrologist, Maury Roos.

About 35 percent of the total is reserved by law to help river ecosystems, wetlands and fisheries, and to maintain a healthy flow of water in the Sacramento-San Joaquin River Delta.

That leaves about 21 percent of the total to flow out into the ocean without being used for anything, according to Roos’ calculations.California drought puzzle- store or conserve more water

“That is the segment we can capture more of,” Roos said. “If we could store more of that, we would have a larger water supply.”

Trouble is, nobody in California can agree on how, or even whether, to capture it.

Storage, conservation

Everybody agrees that something must be done to quench California’s ever-increasing thirst. The question is whether the state should spend billions of dollars capturing the water behind dams and distributing it through new pipelines or spend a little less money by maximizing usage through conservation.

A laundry list of proposals, including water recycling, groundwater storage and even cloud seeding, are listed in a working draft of the California Water Plan, a comprehensive blueprint for future management of the resource.

It is nevertheless Gov. Jerry Brown‘s proposal to build twin water tunnels to bypass the delta and take water south that is getting all the attention. The project, which is part of the Delta Conservation Plan, would include restoration of marsh habitat in the delta.

Jason Peltier, the deputy general manager for the Westlands Water District, said farmers generally support the tunnels because the project would free up more water for agriculture.

“Most years there is plenty of water in the system that we can’t get to because of operating restrictions,” Peltier said. “We’ve seen over the last 20 years layer upon layer of regulatory restrictions that have taken away water for humans and allocated it for the environment.”

Problem is, the tunnels could cost anywhere from $25 billion to $67 billion, according to recent estimates.

California’s reservoirs

In a typical wet year, California captures about 10 million acre-feet of water in its reservoirs, about 80 percent of which is held in the state water department’s two biggest reservoirs behind Shasta and Oroville dams.

That’s well below the 43 million acre-feet capacity of the 1,200 reservoirs under the jurisdiction of the state water department. The reason, said Roos, is that the department is required to release water for fish and wetlands management and must also leave space during winters to avoid flood-causing overflows.

More unallocated water would be captured from waterways like the American River in one proposal in a draft water plan. Photo: Michael Short, The Chronicle

Yet, agricultural interests support expanding California’s reservoir capacity by adding 18.5 feet to Shasta Dam and building Sites Dam, near the town of Maxwell (Colusa County), and Temperance Flat Dam, near Millerton (Madera County) on the San Joaquin River.

These proposals, like the tunnels plan, are expensive. The Shasta dam and Sites proposals together would cost about $3.5 billion and add about 2.6 million acre-feet of water to the system, just enough to “take you through one dry year,” Roos said.

Meanwhile, environmental groups mostly oppose the tunnels and water storage projects. The existing dams and conveyance system, they say, cut off the historic salmon and steelhead trout runs and have imperiled other fish populations, like the delta smelt. Instead, they are pushing for water conservation, treatment and recycling plants.

Jon Rosenfield, a conservation biologist for the Bay Institute, said water bond money would be better spent replacing thousands of old leaking water mains around the state, implementing tiered water rates and building storm-water capture and water recycling systems.

“It simply doesn’t make sense for us to be flushing toilets with pristine water transported miles from the Sierra Nevada,” Rosenfield said. “The notion that it just gets used once and then it is gone is crazy.”

Recycling success

Conservationists point to the Metropolitan Water District of Southern California as the model for a successful recycling program. The district has built over the past two decades a wastewater treatment and reclamation system that cleans dirty household water and then filters it into the groundwater for reuse later on.

Tom Stokely, the water policy analyst for the California Water Impact Network, said Los Angeles County now uses less water than it did 30 years ago despite having at least a million more residents.

“It’s really up to the Legislature and the individual water districts to take this up, but if they use up all their borrowing on the twin tunnels there won’t be money left over for these things,” said Stokely, adding that statewide recycling and conservation programs could save 2 million acre-feet of water a year. “We see it as an either-or scenario. Do we have a sustainable water future or do we spend all our resources on costly tunnels and water storage projects?”

None of the various ideas would solve California’s water shortage problems, which are more severe than most people realize, according to regulators.

Capturing more water

California would need six times more water storage than it now has to make it through a worst-case-scenario drought, Roos said. That amounts to an additional 18 million acre-feet of storage. Water analysts at UC Davis estimate that all of the dam proposals together would only add 4 million or 5 million acre-feet, at a cost of $6 billion to $8 billion.

Meanwhile, demand just keeps growing as more people move into the state. It is a situation that can only get more dire as the world warms up, snow in the mountains decreases and droughts become more common.

Ultimately, Californians will have to come to grips with the fact that, no matter what gets done, the state will never be drought proof, said Jay Lund, the director of the Center for Watershed Sciences at UC Davis.

“I think there will be some ability to improve, mostly in terms of giving incentives to store groundwater in wet years and to move water from north to south – efficiencies like that – but you can’t make it rain,” Lund said. “In the end, we will still be living in a semi-arid climate, and we will still have droughts. Most of what we can do is make it easier to prepare for the next drought.”

California’s drought

Find additional coverage at www.sfgate.com/drought.

Peter Fimrite is a San Francisco Chronicle staff writer. E-mail: pfimrite@sfchronicle.com Twitter: @pfimrite