As California begins its measured response to the effects of drought on its prodigious agriculture industry by scaling back environmental protections and bending some water rights regulations, researchers at the University of California, Davis, indicate that even killing a lot of endangered fish won’t save the Central Valley from taking a huge financial hit.

A preliminary report (pdf) on the economic impact of the drought, prepared for the California Department of Food and Agriculture (CDFA), projects 14,500 workers in the state’s farmbelt will lose their jobs and Central Valley growers and farm communities will suffer a $1.7-billion loss. Researchers based their estimates on expectations that water deliveries for irrigation will be cut a third this year.

What the report doesn’t do is factor in the long-term consequences of sucking too much water out of the ground to compensate for reductions in other water sources. “If another critically dry year occurs in 2015, the socioeconomic impacts will likely be much more severe,” it says.

The Central Valley is the nation’s largest producer of agricultural products.

The direct effect of the drought will be the loss of $738 million in gross farm revenues and 6,400 jobs as farmers take 410,000 acres out of production. The rest will be lost through “induced” and “indirect” consequences for the region and its related industries. Most of the impact will be in the San Joaquin Valley and Tulare Lake Basin.

The report compared the effects of the current drought to one in 2009 and concluded they would be much worse this time around. Five years ago, farmers fallowed 270,000 acres and total job losses came to 7,500. The biggest difference was the availability of water through the Central Valley Project (CVP) and the State Water Project (SWP).

When you factor in the drop in water from reduced snowpack in the mountains, “The combined effect is socioeconomic impacts that are up to 50 percent more severe than in 2009.”

As bad as these projections look, researchers said it easily could have been worse. But the agricultural water sector showed “more resilience” than expected, with a “smaller than expected reduction of water availability, crop acres and employment.”

How did they do it? Through the “exhaustion of reserve groundwater storage and a substantial increase in groundwater overdraft.”

Although the powers that be may not know precisely the long-term consequences of “groundwater overdraft,” they do know that current pumping practices already contribute to the Central Valley’s sinking floor and its potential impact on San Andreas seismic activity.

Researchers emphasized the preliminary nature of their work and said one of the keys in the future will be refining their model “to better estimate the capacity to pump groundwater and the short- and long-run effects on water levels.”

Better would be good. The U.S. Geological Survey (USGS) remarked in its 2009 report (pdf) on the six-fold increase in pumping of the giant Central Valley aquifer between 1962 and 2003 that, “Pumpage is physically possible to measure; yet in the Central Valley it is one of the least certain components of the entire water budget.”

–Ken Broder

To Learn More:

California Drought Will Cause Thousands to Lose Farm Jobs, Cost $1.7 Billion (by Sharon Bernstein, Reuters)

California Drought Could Cost Central Valley $1.7 Billion (by David Pierson, Los Angeles Times)

Pumping Groundwater in Central Valley Could Cause Quakes in L.A. (by Ken Broder, AllGov California)

Preliminary 2014 Drought Economic Impact Estimates in Central Valley Agriculture (UC Davis Center for Watershed Sciences and Duncan MacEwan of ERA Economics) (pdf)