Impacts of California’s Ongoing Drought: Agriculture

California’s agriculture sector has exceeded expectations during the most severe drought in recorded history at the cost of massive but unsustainable groundwater pumping. Continued groundwater overdraft, while reducing the economic impacts of the drought for the agricultural sector now, has shifted the burden to others, including current and future generations forced to dig deeper wells, find alternative drinking water sources, and repair infrastructure damaged by subsidence. That is the conclusion of the new study, Impacts of California’s Ongoing Drought: Agriculture, released today by the Pacific Institute, an independent global water think tank.

This new study is the first comprehensive analysis of the actual impacts of the drought on California agricultural revenue and employment through 2014 – the last year for which data are available. The study, drawing on data from the USDA National Agricultural Statistics Survey and the California Employment Development Department, analyzes acreage, revenue, and employment figures from 2000-2014. Production costs, impacts on animal or nursery products, or regional impacts are not examined because these data are not yet available. The study’s results provide critical insight into how the state can maintain a healthy agriculture sector in a future likely to see less water, more extreme weather, and greater uncertainty.

California remains the largest agricultural producer in the U.S. in total output and in exports. During the drought, California’s agriculture sector has experienced record-high crop revenue and employment. Last year farmers harvested 640,000 fewer acres, which was 9 percent below pre-drought levels, yet crop revenue remained strong. Indeed, crop revenue peaked in 2013 at $34 billion – the highest level in California history. In 2014, crop revenue declined by $480 million, representing a 1.4 percent reduction from 2013 levels. All economic estimates have been corrected for inflation. Statewide agriculture-related jobs also reached a record-high of 417,000 people in 2014, highlighting the sector’s ability to withstand the reduction of available water.